rrbatch's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/276436/comments http://seekingalpha.com/article/176796-positive-financial-innovation-small-business-equity-investing?source=feed#comment-798612 798612
As a SCORE volunteer in VA, we find that local banks are often more willing to lend to local borrowers, but most banks shy away from the extra paperwork required for SBA guaranteed loans. ]]> Wed, 09 Dec 2009 16:51:07 -0500
As a SCORE volunteer in VA, we find that local banks are often more willing to lend to local borrowers, but most banks shy away from the extra paperwork required for SBA guaranteed loans. ]]> http://seekingalpha.com/article/175607-lithium-ion-batteries-and-gevs-false-gods-for-the-new-millennium?source=feed#comment-783097 783097
You may not have seen the Wall Street Journal special section on "How to Rebuild Global Prosperity" in the issue of Nov 23. Carlos Ghosn (CEO of Nissan/Renault) in the subsection on Energy and the Environment says: "... about energy efficiency, the ability to store energy is absolutely important. ...I think focusing and developing capacity to store energy ... is absolutely fundamental to have a much higher efficiency in terms of use of energy." (Can you send Mr. Ghosn a copy of your article?)

That said, there is a fundamental limitation in your analysis, that being the type of driving used for comparison of the candidate vehicles. You postulate a range of 12,000 miles/year, but if this range is mostly driving at highway speed then there will be little if any advantage for a hybrid over a conventional IC engine. We drove a Ford Escape hybrid for three years, experiencing average mileage of about 25 mpg, mostly at highway speed (here in central Virginia, we seldom encounter stop-and-go traffic). We traded in the hybrid for a 4-cylinder Escape, and get about the same mileage. More to the economic point, we paid no cash for the trade and financed the new vehicle (both at zero interest) for a payment $50 less per month -- even with the hybrid depreciated for three years. The premium paid for the hybrid buys a lot of gas!

Hybrids make a lot of sense in city driving, thus their adoption by New York taxis, delivery trucks, and urban buses. Maxwell Technologies is selling ultra-capacitors to China for the latter application. For suburban and rural driving, the gas engine in a hybrid will take most of the load, with the batteries and electric power train just along for the ride. I don't knock the Prius - it's a fine car - but for many people the Camry will give equivalent mileage at a much lower capital cost.

CNG conversion of a gasoline-fueled vehicle costs about $8000 (comparable to the hybrid premium, maybe less for original equipment), so there needs to be a large difference in fuel cost per mile to justify the premium. Also, the energy density of CNG is about 1/5 that of gasoline, so the fuel tank will be about 5x larger for equivalent range. This is less of an issue for big trucks and transit busses, thus many buses in California have large CNG bottles strapped to their roofs.

I certainly concur in your conclusion that the market for electric-only vehicles in the US will be limited to affluent zealots. In Europe, distances traveled are likely to be shorter, more traffic will be encountered, and gasoline costs are higher, so EVs and hybrids may be more popular.]]> Mon, 30 Nov 2009 15:06:34 -0500
You may not have seen the Wall Street Journal special section on "How to Rebuild Global Prosperity" in the issue of Nov 23. Carlos Ghosn (CEO of Nissan/Renault) in the subsection on Energy and the Environment says: "... about energy efficiency, the ability to store energy is absolutely important. ...I think focusing and developing capacity to store energy ... is absolutely fundamental to have a much higher efficiency in terms of use of energy." (Can you send Mr. Ghosn a copy of your article?)

That said, there is a fundamental limitation in your analysis, that being the type of driving used for comparison of the candidate vehicles. You postulate a range of 12,000 miles/year, but if this range is mostly driving at highway speed then there will be little if any advantage for a hybrid over a conventional IC engine. We drove a Ford Escape hybrid for three years, experiencing average mileage of about 25 mpg, mostly at highway speed (here in central Virginia, we seldom encounter stop-and-go traffic). We traded in the hybrid for a 4-cylinder Escape, and get about the same mileage. More to the economic point, we paid no cash for the trade and financed the new vehicle (both at zero interest) for a payment $50 less per month -- even with the hybrid depreciated for three years. The premium paid for the hybrid buys a lot of gas!

Hybrids make a lot of sense in city driving, thus their adoption by New York taxis, delivery trucks, and urban buses. Maxwell Technologies is selling ultra-capacitors to China for the latter application. For suburban and rural driving, the gas engine in a hybrid will take most of the load, with the batteries and electric power train just along for the ride. I don't knock the Prius - it's a fine car - but for many people the Camry will give equivalent mileage at a much lower capital cost.

CNG conversion of a gasoline-fueled vehicle costs about $8000 (comparable to the hybrid premium, maybe less for original equipment), so there needs to be a large difference in fuel cost per mile to justify the premium. Also, the energy density of CNG is about 1/5 that of gasoline, so the fuel tank will be about 5x larger for equivalent range. This is less of an issue for big trucks and transit busses, thus many buses in California have large CNG bottles strapped to their roofs.

I certainly concur in your conclusion that the market for electric-only vehicles in the US will be limited to affluent zealots. In Europe, distances traveled are likely to be shorter, more traffic will be encountered, and gasoline costs are higher, so EVs and hybrids may be more popular.]]> http://seekingalpha.com/article/170514-america-the-nanny-state?source=feed#comment-740389 740389
I spent Halloween weekend reading the initial sections of the 1990-page "Affordable Health Care for America Act" kindly posted on-line by the House of Representatives - what a frightening experience! This trillion-dollar horror, foisted on us by the liberal wing of the Democrat party, purports to "reform" the delivery of our health care. It certainly does that, in ways that most of us will regret.

The trillion-dollar cost scored by the CBO with its usual static methodology (neglecting changes in behavior due to changes in policy) addresses only the costs incurred by the federal government. It fails to estimate the costs that will be passed on to the public through increased insurance premiums, excise taxes and penalties, and administrative overhead to provide new reports demanded by the proliferating bureaucracy. WellPoint estimates that insurance premiums for its coverage of citizens in my state of Virginia will increase 98% when this "reform" is fully implemented.

Social Security began in 1935, the year I was born, and eligibility for benefits was pegged at age 65 because that was the average life expectancy then. Thanks in part to advances in medical science I'm still around and kicking, and the Census Bureau says I can expect to live another 14 years (to age 88). A child born in the U.S. today has an average life expectancy of 78 years; on the same basis as original Social Security, why isn't this the new age of eligibility for full Social Security and Medicare benefits? This is a simple reform that would instantly resolve the unfunded liabilities that, as you point out, are the real issues that need to be addressed?

The Act appropriates $7 billion to start both insurance co-ops and a government-run insurance program. These provisions are at the level of noise, since the the CBO estimates that the number of takers for the "public option" will be 2% or less of the total insured population - a sop to the business-hating wing of the Democrat party.

The efforts of Congress to "reform" health care are a failure and a fraud worthy of Bernie Madoff. The House bill and its companion in the Senate deserve to be killed, and any of our representatives who support these monstrosities should not receive our votes in the future.]]> Mon, 02 Nov 2009 11:13:22 -0500
I spent Halloween weekend reading the initial sections of the 1990-page "Affordable Health Care for America Act" kindly posted on-line by the House of Representatives - what a frightening experience! This trillion-dollar horror, foisted on us by the liberal wing of the Democrat party, purports to "reform" the delivery of our health care. It certainly does that, in ways that most of us will regret.

The trillion-dollar cost scored by the CBO with its usual static methodology (neglecting changes in behavior due to changes in policy) addresses only the costs incurred by the federal government. It fails to estimate the costs that will be passed on to the public through increased insurance premiums, excise taxes and penalties, and administrative overhead to provide new reports demanded by the proliferating bureaucracy. WellPoint estimates that insurance premiums for its coverage of citizens in my state of Virginia will increase 98% when this "reform" is fully implemented.

Social Security began in 1935, the year I was born, and eligibility for benefits was pegged at age 65 because that was the average life expectancy then. Thanks in part to advances in medical science I'm still around and kicking, and the Census Bureau says I can expect to live another 14 years (to age 88). A child born in the U.S. today has an average life expectancy of 78 years; on the same basis as original Social Security, why isn't this the new age of eligibility for full Social Security and Medicare benefits? This is a simple reform that would instantly resolve the unfunded liabilities that, as you point out, are the real issues that need to be addressed?

The Act appropriates $7 billion to start both insurance co-ops and a government-run insurance program. These provisions are at the level of noise, since the the CBO estimates that the number of takers for the "public option" will be 2% or less of the total insured population - a sop to the business-hating wing of the Democrat party.

The efforts of Congress to "reform" health care are a failure and a fraud worthy of Bernie Madoff. The House bill and its companion in the Senate deserve to be killed, and any of our representatives who support these monstrosities should not receive our votes in the future.]]> http://seekingalpha.com/article/166150-healthcare-reform-vs-innovation-and-growth?source=feed#comment-714001 714001
As a productive 74-year-old with six heart artery bypasses, and sustained with moderate-cost drugs to regulate blood pressure, cholesterol, and blood sugar, I consider myself living proof that modern therapies can extend life. So why do we still consider our working capabilities to end at age 65 or 67? Let's recognize that normal life expectancy is now 75, and extend the eligibility for social security and pensions to that age. Retirement at age 65 was written into law in 1935, when that was the normal life expectancy.

The real waste is retirement of government employees after 30 years of service with full pension benefits, often in their mid-fifties. The cost is already bankrupting states like California, and will impact others until politicians have the guts to rethink their promises to provide retirement benefits while people are still in their prime working years.]]> Tue, 13 Oct 2009 12:39:53 -0400
As a productive 74-year-old with six heart artery bypasses, and sustained with moderate-cost drugs to regulate blood pressure, cholesterol, and blood sugar, I consider myself living proof that modern therapies can extend life. So why do we still consider our working capabilities to end at age 65 or 67? Let's recognize that normal life expectancy is now 75, and extend the eligibility for social security and pensions to that age. Retirement at age 65 was written into law in 1935, when that was the normal life expectancy.

The real waste is retirement of government employees after 30 years of service with full pension benefits, often in their mid-fifties. The cost is already bankrupting states like California, and will impact others until politicians have the guts to rethink their promises to provide retirement benefits while people are still in their prime working years.]]> http://seekingalpha.com/article/157741-constitutional-problems-with-healthcare-reform?source=feed#comment-641687 641687
Our medical insurance "crisis" was made by our pols when they passed Medicare and Medicaid without realistic cost estimates. Obamacare will compound the error.]]> Sun, 23 Aug 2009 09:51:45 -0400
Our medical insurance "crisis" was made by our pols when they passed Medicare and Medicaid without realistic cost estimates. Obamacare will compound the error.]]> http://seekingalpha.com/article/154915-the-truth-about-fossil-fuels-and-renewable-energy-part-ii?source=feed#comment-622134 622134 Sun, 09 Aug 2009 13:45:43 -0400 http://seekingalpha.com/article/154915-the-truth-about-fossil-fuels-and-renewable-energy-part-ii?source=feed#comment-622060 622060
A few points in support of your thesis and investing ideas:

1. I'm retired from the Babcock & Wilcox Company in Lynchburg, VA. B&W produces the fuel elements and other components for all the Navy's reactors that, as you say, have a fifty-year history of incident-free operation. B&W also designed and built the Three Mile Island reactor, and after that fiasco (due as much to operator error as to faulty design) sold their commercial nuclear business to the French. Areva North America continues to operate in Lynchburg and is a leading contender to build new reactors in the U.S. based on a European design. Areva has entered a joint venture with Northrop Grumman (NOC) to build a plant in Newport News capable of fabricating large reactor vessels (NOC also installs the reactors in the Navy's carriers and some of their submarines). B&W recently proposed and submitted a license application for a 100-MW modular commercial reactor that has features that make much environmental and economic sense. B&W is a subsidiary of McDermott International (MDR), which also has interests in the construction of off-shore drilling platforms and boilers and environmental controls for fossil-powered generation plants.

2. Expansion of nuclear power requires facilities to enrich natural uranium with the fissionable isotope U235. The leading source of enriched uranium in the U.S, is USEC (USU), which operates a Cold War-era gaseous diffusion plant in Ohio. USEC has invested $1.5 billion in development of a centrifuge enrichment plant, but was recently denied federal loan guarantees for funding completion of the plant, putting the project and the future of USEC in doubt. Meanwhile, GE has formed a joint venture with Hitachi and Cameco (CCJ) to build an enrichment plant in North Carolina using a laser isotope separation process that has not been demonstrated at commercial scale. These issues must be resolved before expansion of nuclear generation is realistic, and I'm hopeful that they can be resolved without government subsidy.

3. I've had holdings in Chesapeake (CHK) and Penn-Virginia (PVR) for some time, and have ridden the shares down and now up in recovery. PVR has the advantage of diversification between coal properties and a natural gas mid-stream business. PVR and Martin Midstream (MMLP) both throw off nice income streams.

4. Some of your commenters, particularly jerrydd, do not seem to understand the difference between energy and power (the rate at which energy is generated or used). As you point out in your post, wind and solar (and ocean waves) are intermittent sources of both power and energy. A wind farm or solar array can generate multi-MW of power when the wind blows and the sun shines, and can offset some of the energy generated from fossil or nuclear generators, but (apart from massive energy storage facilities) cannot be relied upon to supply power or energy when it's needed. Since wind and solar cannot replace fossil or nuclear plants, their economics are highly dubious.]]> Sun, 09 Aug 2009 13:04:59 -0400
A few points in support of your thesis and investing ideas:

1. I'm retired from the Babcock & Wilcox Company in Lynchburg, VA. B&W produces the fuel elements and other components for all the Navy's reactors that, as you say, have a fifty-year history of incident-free operation. B&W also designed and built the Three Mile Island reactor, and after that fiasco (due as much to operator error as to faulty design) sold their commercial nuclear business to the French. Areva North America continues to operate in Lynchburg and is a leading contender to build new reactors in the U.S. based on a European design. Areva has entered a joint venture with Northrop Grumman (NOC) to build a plant in Newport News capable of fabricating large reactor vessels (NOC also installs the reactors in the Navy's carriers and some of their submarines). B&W recently proposed and submitted a license application for a 100-MW modular commercial reactor that has features that make much environmental and economic sense. B&W is a subsidiary of McDermott International (MDR), which also has interests in the construction of off-shore drilling platforms and boilers and environmental controls for fossil-powered generation plants.

2. Expansion of nuclear power requires facilities to enrich natural uranium with the fissionable isotope U235. The leading source of enriched uranium in the U.S, is USEC (USU), which operates a Cold War-era gaseous diffusion plant in Ohio. USEC has invested $1.5 billion in development of a centrifuge enrichment plant, but was recently denied federal loan guarantees for funding completion of the plant, putting the project and the future of USEC in doubt. Meanwhile, GE has formed a joint venture with Hitachi and Cameco (CCJ) to build an enrichment plant in North Carolina using a laser isotope separation process that has not been demonstrated at commercial scale. These issues must be resolved before expansion of nuclear generation is realistic, and I'm hopeful that they can be resolved without government subsidy.

3. I've had holdings in Chesapeake (CHK) and Penn-Virginia (PVR) for some time, and have ridden the shares down and now up in recovery. PVR has the advantage of diversification between coal properties and a natural gas mid-stream business. PVR and Martin Midstream (MMLP) both throw off nice income streams.

4. Some of your commenters, particularly jerrydd, do not seem to understand the difference between energy and power (the rate at which energy is generated or used). As you point out in your post, wind and solar (and ocean waves) are intermittent sources of both power and energy. A wind farm or solar array can generate multi-MW of power when the wind blows and the sun shines, and can offset some of the energy generated from fossil or nuclear generators, but (apart from massive energy storage facilities) cannot be relied upon to supply power or energy when it's needed. Since wind and solar cannot replace fossil or nuclear plants, their economics are highly dubious.]]> http://seekingalpha.com/article/154615-the-truth-about-fossil-fuels-and-renewable-energy?source=feed#comment-619922 619922
Several comments endorse a "comprehensive energy policy". I take the heretical position that, given the tragic history of past efforts to craft a useful policy, the best outcome would be NO energy policy. Our politicians and the technologists who populate the energy bureaucracies have proven that they are not competent to create a beneficial policy. Let the markets work!

This week the President let fly $2 billion in new subsidies for advanced battery production. Members of my family in recent weeks have benefited from $9000 in subsidies to trade clunkers for new cars that they would have bought anyway. I will benefit from a $1500 tax credit to replace a HVAC system this spring that had to be replaced anyway. I traded in a hybrid Ford Escape this year, purchased three years ago with a $2000 tax credit, because for our transportation requirements it didn't really offer a significant benefit in mileage compared to the 4-cylinder Escape we received in trade (with a $50 per month reduction in amortization cost). Before I retired, I worked on a project to build an enormous superconducting magnet for energy storage, funded with a $25 million grant from DOE, that was delivered to a scrap yard in Florida.

You get the point: subsidies granted by our politicians have been an unmitigated waste. Any policy that attempts to drive the market in a direction that is not economically justified will fail, and if an approach has economic justification, it doesn't need a policy push.]]> Fri, 07 Aug 2009 12:35:49 -0400
Several comments endorse a "comprehensive energy policy". I take the heretical position that, given the tragic history of past efforts to craft a useful policy, the best outcome would be NO energy policy. Our politicians and the technologists who populate the energy bureaucracies have proven that they are not competent to create a beneficial policy. Let the markets work!

This week the President let fly $2 billion in new subsidies for advanced battery production. Members of my family in recent weeks have benefited from $9000 in subsidies to trade clunkers for new cars that they would have bought anyway. I will benefit from a $1500 tax credit to replace a HVAC system this spring that had to be replaced anyway. I traded in a hybrid Ford Escape this year, purchased three years ago with a $2000 tax credit, because for our transportation requirements it didn't really offer a significant benefit in mileage compared to the 4-cylinder Escape we received in trade (with a $50 per month reduction in amortization cost). Before I retired, I worked on a project to build an enormous superconducting magnet for energy storage, funded with a $25 million grant from DOE, that was delivered to a scrap yard in Florida.

You get the point: subsidies granted by our politicians have been an unmitigated waste. Any policy that attempts to drive the market in a direction that is not economically justified will fail, and if an approach has economic justification, it doesn't need a policy push.]]> http://seekingalpha.com/article/149568-small-business-lending-why-the-programs-need-to-change?source=feed#comment-593844 593844
There are other federal and state agencies with paid employees offering services similar to those we offer as volunteers - except that our staff of eight volunteers has more than 200 years of collective business experience, whereas few of the government employees we see have ever held responsible positions outside of government. One recent client with a highly credible business plan was denied an opportunity to even meet with a bureaucrat responsible for disbursing state Small Business Financing Authority funds because she was "extremely busy preparing for an upcoming Board meeting".

I doubt that the SBA or corresponding (and duplicative) state agencies can be reformed to be more responsive or useful. Better to save the taxpayers the expense of maintaining these costly and useless agencies, and let small businesses make their case to the wide variety of established private funding sources. And support community-based volunteer advisors like SCORE to help guide new businesspeople through the hoops.]]> Sun, 19 Jul 2009 12:10:27 -0400
There are other federal and state agencies with paid employees offering services similar to those we offer as volunteers - except that our staff of eight volunteers has more than 200 years of collective business experience, whereas few of the government employees we see have ever held responsible positions outside of government. One recent client with a highly credible business plan was denied an opportunity to even meet with a bureaucrat responsible for disbursing state Small Business Financing Authority funds because she was "extremely busy preparing for an upcoming Board meeting".

I doubt that the SBA or corresponding (and duplicative) state agencies can be reformed to be more responsive or useful. Better to save the taxpayers the expense of maintaining these costly and useless agencies, and let small businesses make their case to the wide variety of established private funding sources. And support community-based volunteer advisors like SCORE to help guide new businesspeople through the hoops.]]> http://seekingalpha.com/article/148222-investing-in-the-smart-grid?source=feed#comment-584640 584640
I left the house in Maine to work for the Babcock and Wilcox Co. (subsid of McDermott Intl.) in Virrginia, developing a Superconducting Magnet Energy Storage (SMES) system before retiring in 2000. Our SMES (funded by DoE to the tune of $25 million) was much bigger than the flywheel energy stores made by the likes of Beacon (BCON) designed to replace a battery UPS - it could store 100 MJ and discharge at 100 MW. The objective was to stabilize a transmission grid's voltage and frequency in the event of a malfunction like a sagging line shorting into a tree (happens all the time). We tried hard to find a utility customer willing to install and operate a free SMES, to no avail. The bones of the magnet were eventually delivered to the National High Magnetic Field Lab in Tallahassee, FL, where they still sit.

A "smart grid" will do nothing to reduce our dependence on foreign oil; next to zero oil is burned to generate power, >80% is used for transportation and there is no viable alternative to that use yet. The main purpose of a "smart grid" is to maintain grid voltage and frequency stability, which will be increasingly important as the load shifts between intermittent generation (wind and solar) and base generation (coal, gas, or nuclear). In fact without sophisticated instrumentation and control, intermittent generation will be next to useless in a high-power grid. Massive (>100 MW) "power flow controllers" have been built by the former Westinghouse Transmission and Distribution Group, now owned by Siemens. The biggies in this field will continue to be ABB, GE, and Siemens, supplied with high-power components by outfits like Infineon, ST Micro, and Cree.]]> Sun, 12 Jul 2009 14:33:11 -0400
I left the house in Maine to work for the Babcock and Wilcox Co. (subsid of McDermott Intl.) in Virrginia, developing a Superconducting Magnet Energy Storage (SMES) system before retiring in 2000. Our SMES (funded by DoE to the tune of $25 million) was much bigger than the flywheel energy stores made by the likes of Beacon (BCON) designed to replace a battery UPS - it could store 100 MJ and discharge at 100 MW. The objective was to stabilize a transmission grid's voltage and frequency in the event of a malfunction like a sagging line shorting into a tree (happens all the time). We tried hard to find a utility customer willing to install and operate a free SMES, to no avail. The bones of the magnet were eventually delivered to the National High Magnetic Field Lab in Tallahassee, FL, where they still sit.

A "smart grid" will do nothing to reduce our dependence on foreign oil; next to zero oil is burned to generate power, >80% is used for transportation and there is no viable alternative to that use yet. The main purpose of a "smart grid" is to maintain grid voltage and frequency stability, which will be increasingly important as the load shifts between intermittent generation (wind and solar) and base generation (coal, gas, or nuclear). In fact without sophisticated instrumentation and control, intermittent generation will be next to useless in a high-power grid. Massive (>100 MW) "power flow controllers" have been built by the former Westinghouse Transmission and Distribution Group, now owned by Siemens. The biggies in this field will continue to be ABB, GE, and Siemens, supplied with high-power components by outfits like Infineon, ST Micro, and Cree.]]> http://seekingalpha.com/article/145924-how-to-invest-in-the-coming-demographic-shift?source=feed#comment-567026 567026
I was born in the same year as Social Security - 1935 - when median life expectancy was 65 years. SS and I are almost 74, and at least I am still healthy and looking forward to more good years of productive work. Can't say the same for SS.

It's unconscionable to me that government employees and union members "retire" after 25 - 30 years of "work" and expect pensions (many not fully funded but dependent on current taxes or corporate income) to support them - in some cases - lavishly. Thus the "gold plated" pensions that have contributed to the bankruptcy of GM and Chrysler (and bailouts by the taxpayers); and the pensions of up to $500,000 per year paid to some "retired" civil servants in California.

I had dinner last week with a management-level California civil servant, just retired, who neglected to train her replacement so is hired back as a consultant to carry on her work and begin to train a successor. Some would call this "double dipping".

I have no problem with us old folks continuing to work after age 65, and this can take some of the burden off pension liabilities, if handled to prevent double dipping. In my case, I pay the "self employment" tax that effectively offsets a major part of what I receive from Social Security. If that's fair for me, why should another pensioner be allowed to multiply their pension payments by working past retirement age?

There's a good case to be made for pension reform - increasing SS retirement age to at least life expectancy, and reining back double dipping - if our politicians had the courage to take it on.]]> Mon, 29 Jun 2009 11:45:20 -0400
I was born in the same year as Social Security - 1935 - when median life expectancy was 65 years. SS and I are almost 74, and at least I am still healthy and looking forward to more good years of productive work. Can't say the same for SS.

It's unconscionable to me that government employees and union members "retire" after 25 - 30 years of "work" and expect pensions (many not fully funded but dependent on current taxes or corporate income) to support them - in some cases - lavishly. Thus the "gold plated" pensions that have contributed to the bankruptcy of GM and Chrysler (and bailouts by the taxpayers); and the pensions of up to $500,000 per year paid to some "retired" civil servants in California.

I had dinner last week with a management-level California civil servant, just retired, who neglected to train her replacement so is hired back as a consultant to carry on her work and begin to train a successor. Some would call this "double dipping".

I have no problem with us old folks continuing to work after age 65, and this can take some of the burden off pension liabilities, if handled to prevent double dipping. In my case, I pay the "self employment" tax that effectively offsets a major part of what I receive from Social Security. If that's fair for me, why should another pensioner be allowed to multiply their pension payments by working past retirement age?

There's a good case to be made for pension reform - increasing SS retirement age to at least life expectancy, and reining back double dipping - if our politicians had the courage to take it on.]]> http://seekingalpha.com/article/145789-california-s-default-is-certain?source=feed#comment-565991 565991 seekingalpha.com/artic...?) in another SA post today.]]> Sun, 28 Jun 2009 15:16:44 -0400 seekingalpha.com/artic...?) in another SA post today.]]> http://seekingalpha.com/article/140219-gm-s-pending-bankruptcy-how-buying-a-car-is-going-to-change?source=feed#comment-522998 522998
I relish the court case Ford could bring! For once, some lawyers may earn their keep.]]> Fri, 29 May 2009 12:13:45 -0400
I relish the court case Ford could bring! For once, some lawyers may earn their keep.]]> http://seekingalpha.com/article/133188-u-s-manufacturing-more-output-with-fewer-workers?source=feed#comment-479462 479462
Are the engineers and programmers who develop new products and processes working in manufacturing or the service industry? Sure there will be dislocations of unskilled labor as increased productivity demands higher skill levels. This should be an incentive for all to obtain their highest attainable level of education, or to accept the menial tasks that will remain as society advances.]]> Mon, 27 Apr 2009 13:31:27 -0400
Are the engineers and programmers who develop new products and processes working in manufacturing or the service industry? Sure there will be dislocations of unskilled labor as increased productivity demands higher skill levels. This should be an incentive for all to obtain their highest attainable level of education, or to accept the menial tasks that will remain as society advances.]]> http://seekingalpha.com/article/132980-a-natural-gas-centric-strategic-long-term-comprehensive-energy-policy?source=feed#comment-476068 476068
One flaw in the CNG argument is the 4:1 lower energy density of CNG vs. gasoline. Thus for equal range and energy efficiency, a car powered by CNG would require 4x the tank volume of a gasoline-powered car. I don't know how the Honda GX packages its tank into its body, but I suspect it simply has reduced range and/or trunk space compared to a gasoline-powered version.

The cost of conversion from gasoline to CNG runs $5000 to $7000 per vehicle, and it's hard to believe that this will be economic until the price of gasoline returns to well over $4 per gallon. I drive a Ford Escape hybrid, and I figured I'd break even on the $3000 cost premium after tax credit with gasoline over $2.75 a gallon; made money last summer, not this year. The cost to convert the entire U.S. light vehicle fleet of 240 million vehicles (R.L. Polk) to CNG would be an astronomical $1.5 trillion (doesn't sound so bad in comparison with the projected federal deficit).

Safety is also a concern: a house I used to live in blew up a few years ago because a technician made a wrong connection to a high pressure gas line. Two houses were destroyed here in central Virginia last year when an interstate gas line blew up. The thought of householders plugging their cars into gas lines for overnight refills scares me. But then gasoline is explosive, too, it's just not under pressure. CNG refueling at service stations with trained operators and reliable devices sounds better to me; that's how I get the propane bottle for our grill refilled.

For these reasons, the Pickens Plan dropped the idea of using CNG for light vehicles last year, and is now concentrated on adoption of CNG for heavy trucks. This is supported by the fact that major CNG lines tend to parallel the major interstate truck routes. I have every respect for Boone Pickens and his investment in the cause; he has the good sense to realize the limitations of CNG as a vehicle fuel in the near term.

You suggest a number of policy steps that should be taken, and I can agree with some, particularly slapping an import tax on petroleum. I do not believe that there is an effective government solution to the problem, however; far better to let the market sort out the best among alternative fuels for our future transportation needs.]]> Fri, 24 Apr 2009 13:26:43 -0400
One flaw in the CNG argument is the 4:1 lower energy density of CNG vs. gasoline. Thus for equal range and energy efficiency, a car powered by CNG would require 4x the tank volume of a gasoline-powered car. I don't know how the Honda GX packages its tank into its body, but I suspect it simply has reduced range and/or trunk space compared to a gasoline-powered version.

The cost of conversion from gasoline to CNG runs $5000 to $7000 per vehicle, and it's hard to believe that this will be economic until the price of gasoline returns to well over $4 per gallon. I drive a Ford Escape hybrid, and I figured I'd break even on the $3000 cost premium after tax credit with gasoline over $2.75 a gallon; made money last summer, not this year. The cost to convert the entire U.S. light vehicle fleet of 240 million vehicles (R.L. Polk) to CNG would be an astronomical $1.5 trillion (doesn't sound so bad in comparison with the projected federal deficit).

Safety is also a concern: a house I used to live in blew up a few years ago because a technician made a wrong connection to a high pressure gas line. Two houses were destroyed here in central Virginia last year when an interstate gas line blew up. The thought of householders plugging their cars into gas lines for overnight refills scares me. But then gasoline is explosive, too, it's just not under pressure. CNG refueling at service stations with trained operators and reliable devices sounds better to me; that's how I get the propane bottle for our grill refilled.

For these reasons, the Pickens Plan dropped the idea of using CNG for light vehicles last year, and is now concentrated on adoption of CNG for heavy trucks. This is supported by the fact that major CNG lines tend to parallel the major interstate truck routes. I have every respect for Boone Pickens and his investment in the cause; he has the good sense to realize the limitations of CNG as a vehicle fuel in the near term.

You suggest a number of policy steps that should be taken, and I can agree with some, particularly slapping an import tax on petroleum. I do not believe that there is an effective government solution to the problem, however; far better to let the market sort out the best among alternative fuels for our future transportation needs.]]> http://seekingalpha.com/article/130146-200-oil-is-coming-while-we-waste-a-perfectly-good-crisis-part-3?source=feed#comment-456807 456807
That said, I don't see a government policy solution to the problem - to the contrary, present policies will make the problem far worse. The Hirsch report points out that 80% of our petroleum consumption is for transportation, with the remaining 20% going to winter heating, chemicals, road surfacing, etc. Very little petroleum is used for electricity generation, so "alternative energy" like windmills and solar cells are irrelevant to oil consumption. Perhaps we could bring back coal-burning locomotives, but there is no practical substitute for petroleum as fuel for our cars and planes. Even the Pickens Plan has fallen off compressed natural gas as a light vehicle fuel, since its energy density is only one fourth that of gasoline (i.e. we'd need 4x the tank volume for equal range with a CNG-powered car vs. gasoline).

Against this background, we have a new administration that has quickly denied access to new domestic petroleum sources, including oil shale and offshore, while promising $billions in subsidies to alternatives that have no bearing on transportation applications. As Hirsch pointed out, the lead time to develop new fuels and their distribution networks is measured in decades. Likewise the time required to replace the domestic fleet of 240 million vehicles (source: R.L. Polk) with more fuel-efficient models will be decades.

Our present crowd of politicians will respond to the environmentalists, industrial unions, and farmers first, so in the near term we'll see increased taxes on fuels, over-priced small cars that won't sell, and boondoggles like ethanol that consume more energy than they produce.

As usual, John Lounsbury makes a cogent comment: "You have written about the energy problem before and you should keep making the case for action." The solution lies in a time well beyond the term of our present politicos, and we need to keep them from interfering with and delaying the market response that will eventually provide the solution.]]> Wed, 08 Apr 2009 17:07:41 -0400
That said, I don't see a government policy solution to the problem - to the contrary, present policies will make the problem far worse. The Hirsch report points out that 80% of our petroleum consumption is for transportation, with the remaining 20% going to winter heating, chemicals, road surfacing, etc. Very little petroleum is used for electricity generation, so "alternative energy" like windmills and solar cells are irrelevant to oil consumption. Perhaps we could bring back coal-burning locomotives, but there is no practical substitute for petroleum as fuel for our cars and planes. Even the Pickens Plan has fallen off compressed natural gas as a light vehicle fuel, since its energy density is only one fourth that of gasoline (i.e. we'd need 4x the tank volume for equal range with a CNG-powered car vs. gasoline).

Against this background, we have a new administration that has quickly denied access to new domestic petroleum sources, including oil shale and offshore, while promising $billions in subsidies to alternatives that have no bearing on transportation applications. As Hirsch pointed out, the lead time to develop new fuels and their distribution networks is measured in decades. Likewise the time required to replace the domestic fleet of 240 million vehicles (source: R.L. Polk) with more fuel-efficient models will be decades.

Our present crowd of politicians will respond to the environmentalists, industrial unions, and farmers first, so in the near term we'll see increased taxes on fuels, over-priced small cars that won't sell, and boondoggles like ethanol that consume more energy than they produce.

As usual, John Lounsbury makes a cogent comment: "You have written about the energy problem before and you should keep making the case for action." The solution lies in a time well beyond the term of our present politicos, and we need to keep them from interfering with and delaying the market response that will eventually provide the solution.]]> http://seekingalpha.com/article/128405-the-fate-of-general-motors-rick-wagoner?source=feed#comment-445301 445301
I don't find much to admire in the Great O's approach to governing, but his Auto Task Force came through this morning with an admirable analysis and rejection of the "restructuring" plans submitted by GM and Chrysler. They called spades spades, set firm timelines for corrective action, and offered constructive responses to the political issues of destitute Michigan communities and credibility of warranties. Kudos to the Task Force!

Let's not forget either that GM and its competitors turned out cars for years that its customers wanted to buy. Even Toyota, Nissan, and Honda introduced big SUVs - just before the oil prices of last summer caused the market to change its perception of what cars should be. The industry won't be transformed by any technological breakthroughs - just good design to provide the roomy vehicles that the U.S. market wants with incremental improvements in mileage at affordable cost.

It's well known what technical changes will make vehicles more efficient: lighter-weight materials (more composites), hybrid drives, and turbo chargers. (Forget about an all-electric car - this is a silly stunt for GM and companies like Tesla.) All of these changes come at a cost, and it will be interesting to see who can engineer them into affordable and attractive vehicles to come. But be patient - the lead times for these changes will still be five years or more.]]> Mon, 30 Mar 2009 12:18:54 -0400
I don't find much to admire in the Great O's approach to governing, but his Auto Task Force came through this morning with an admirable analysis and rejection of the "restructuring" plans submitted by GM and Chrysler. They called spades spades, set firm timelines for corrective action, and offered constructive responses to the political issues of destitute Michigan communities and credibility of warranties. Kudos to the Task Force!

Let's not forget either that GM and its competitors turned out cars for years that its customers wanted to buy. Even Toyota, Nissan, and Honda introduced big SUVs - just before the oil prices of last summer caused the market to change its perception of what cars should be. The industry won't be transformed by any technological breakthroughs - just good design to provide the roomy vehicles that the U.S. market wants with incremental improvements in mileage at affordable cost.

It's well known what technical changes will make vehicles more efficient: lighter-weight materials (more composites), hybrid drives, and turbo chargers. (Forget about an all-electric car - this is a silly stunt for GM and companies like Tesla.) All of these changes come at a cost, and it will be interesting to see who can engineer them into affordable and attractive vehicles to come. But be patient - the lead times for these changes will still be five years or more.]]> http://seekingalpha.com/article/128261-are-the-big-banks-gaming-the-taxpayer?source=feed#comment-442872 442872
The bankers work for their shareholders, not the taxpayers (except for AIG). If they (the bankers) have an opportunity to make money by arbitrage on a poorly-conceived PPIS, more power to them!

But I have an uncomfortable feeling that this will provoke a new round of "outrage" among the politicos, that greedy, money-grubbing businesspeople are again taking advantage of the "public servants" who conceive these misbegotten plans to "solve" the financial crisis that the bureaucrats and academics created.]]> Fri, 27 Mar 2009 16:27:06 -0400
The bankers work for their shareholders, not the taxpayers (except for AIG). If they (the bankers) have an opportunity to make money by arbitrage on a poorly-conceived PPIS, more power to them!

But I have an uncomfortable feeling that this will provoke a new round of "outrage" among the politicos, that greedy, money-grubbing businesspeople are again taking advantage of the "public servants" who conceive these misbegotten plans to "solve" the financial crisis that the bureaucrats and academics created.]]> http://seekingalpha.com/article/124943-depression-recession-no-it-s-the-great-restructuring?source=feed#comment-420559 420559
In the spirit of Schumpeter's "Creative Destruction", I believe we are at a climactic point in the continuing process of innovation and change in societal structure. At least we're learning new limits on faulty applications of economics to capital allocation - i.e. the fallacies of hiding risk in "derivatives" and similar indirect and opaque investment vehicles.

To those who say manufacturing must be the basis for future economic expansion, I say nonsense! In 1850, 64% of the US population worked on the farm; in 1900 it was 38%; in 1950 12%, and now about 2% - and farm production far exceeds what we need to feed the rest of the US population. Automation and process innovation (more than outsourcing) will continue to reduce the population working in mills and factories, both here and overseas, while sustaining production of the material goods we need.

Where will our progeny work? Are the engineers and programmers who develop new products and processes working in manufacturing or the service industry? Is the efficient distribution of goods not productive, if markups can be driven down? Likely more will work in health care as the population ages, but I would expect benefits from automation and process improvement there, as well as in providing government services. You're certainly right that education is a field crying out for restructuring!

Who can predict what new inventions and corporate structures will be the engines of future growth? Who at the time could predict the following outcomes, but think of the wealth they spawned:

Edison > GE
Wright Brothers > Boeing and airlines
Noyce > Intel
Hewlett and Packard > HP?

I spend a few hours a week with SCORE, counseling folks who want to start, sustain, or grow small businesses. I can attest that there's no end to ambition and courage among young folks who want to undertake the risks of business ownership. I am also witness to the lumbering disinterest and uselessness of government institutions that claim to foster small business, like the SBA. The lack of substantial small business incentives in the "stimulus" bill, and the money squandered to perpetuate the lives of zombies like Citicorp and GM are evidence of the government's inability to allocate its capital productively.

With an exception: government expenditures on national defense have resulted in truly significant technological spinoffs to civil society. The internet started in a small project at MIT called DARPANET. The earliest computers were developed to simulate nuclear reactions, and the technology for the nuclear power industry came from government laboratories. I've also participated in government-sponsored technology programs that were total wastes.

When you speak of banks and related financial institutions, there is obviously room for improvement in efficiency and safety. I once invested part of my modest savings through an account with a major brokerage (that is no longer independent) - until I discovered that i could execute my infrequent trades instantly on-line for one tenth the cost with an account at Fidelity, Vanguard, Schwab, or a similar brokerage service. For the life of me, I can't understand how the large retail brokerages survive, except from the inertia of their legacy customers.]]> Tue, 10 Mar 2009 12:09:09 -0400
In the spirit of Schumpeter's "Creative Destruction", I believe we are at a climactic point in the continuing process of innovation and change in societal structure. At least we're learning new limits on faulty applications of economics to capital allocation - i.e. the fallacies of hiding risk in "derivatives" and similar indirect and opaque investment vehicles.

To those who say manufacturing must be the basis for future economic expansion, I say nonsense! In 1850, 64% of the US population worked on the farm; in 1900 it was 38%; in 1950 12%, and now about 2% - and farm production far exceeds what we need to feed the rest of the US population. Automation and process innovation (more than outsourcing) will continue to reduce the population working in mills and factories, both here and overseas, while sustaining production of the material goods we need.

Where will our progeny work? Are the engineers and programmers who develop new products and processes working in manufacturing or the service industry? Is the efficient distribution of goods not productive, if markups can be driven down? Likely more will work in health care as the population ages, but I would expect benefits from automation and process improvement there, as well as in providing government services. You're certainly right that education is a field crying out for restructuring!

Who can predict what new inventions and corporate structures will be the engines of future growth? Who at the time could predict the following outcomes, but think of the wealth they spawned:

Edison > GE
Wright Brothers > Boeing and airlines
Noyce > Intel
Hewlett and Packard > HP?

I spend a few hours a week with SCORE, counseling folks who want to start, sustain, or grow small businesses. I can attest that there's no end to ambition and courage among young folks who want to undertake the risks of business ownership. I am also witness to the lumbering disinterest and uselessness of government institutions that claim to foster small business, like the SBA. The lack of substantial small business incentives in the "stimulus" bill, and the money squandered to perpetuate the lives of zombies like Citicorp and GM are evidence of the government's inability to allocate its capital productively.

With an exception: government expenditures on national defense have resulted in truly significant technological spinoffs to civil society. The internet started in a small project at MIT called DARPANET. The earliest computers were developed to simulate nuclear reactions, and the technology for the nuclear power industry came from government laboratories. I've also participated in government-sponsored technology programs that were total wastes.

When you speak of banks and related financial institutions, there is obviously room for improvement in efficiency and safety. I once invested part of my modest savings through an account with a major brokerage (that is no longer independent) - until I discovered that i could execute my infrequent trades instantly on-line for one tenth the cost with an account at Fidelity, Vanguard, Schwab, or a similar brokerage service. For the life of me, I can't understand how the large retail brokerages survive, except from the inertia of their legacy customers.]]> http://seekingalpha.com/article/124694-obama-s-un-stimulus-package?source=feed#comment-418331 418331
Obama is a great orator (so were FDR and Hitler among previous populists and fascists), but his objectives become clearer by the day: cement his political party in power by making more than 50% of the voting population dependent on the tax-paying minority. Dick Morris calls this Obama's War on Prosperity, and I agree.

You didn't fully address the pernicious effect of the upward-spiraling federal debt, which now totals $10.9 trillion. The interest on the debt in the past fiscal year was $451 billion, or an average rate of more than 4.1%. Foreigners hold $3.1 trillion (28% of the total), with China, Japan, and the oil exporting countries possessing $1.5 trillion or 50% of the foreign holdings. Interest on the outstanding debt accounted for 15% of federal expenditures last year, with $128 billion being sent overseas to institutions that are not all friendly to US interests.

Obama proposes to incur another $1.8 trillion in debt by the end of FY 2009. If he can float this at the current 4.1% average interest rate, the interest expense on the federal budget will increase by $72 billion to $523 billion, with nearly $150 billion going overseas - if last year's interest rates hold. But given the extraordinary growth of US debt, what is the chance that interest rates won't rise? We'll be shipping more than 5% of federal expenditures to foreign institutions this year.

When will we reduce the debt burden? Not on Obama's watch. He only promises to reduce the deficit in four years, using highly dubious and unlikely projections of growth in the economy and tax receipts. As you and other posters have correctly remarked, increasing tax rates will most likely reduce federal receipts.

Where does this wind up? We haven't even addressed the unfunded future liabilities for Medicare and Social Security. There's no way these entitlements can be paid for with current tax receipts, considering a workforce that's declining relative to beneficiaries, so will this add to the deficit and national debt? I see only two possibilities: default on the US debt (like Argentina most recently) or a ravenous bout of inflation and rapidly declining dollar. Something like Carter's malaise and stagflation of the 1970s, only much worse. Coupled with drastic changes in the entitlement programs. So much for saving the "middle class".

Obama and the rest of the Washington crowd prefer to ignore these issues. Perhaps a change of control in Congress in 2010 will put a brake on Obama's malfeasance, but the recent history of Republican profligacy doesn't give me much hope. Given a more perfect union, I'd hope for devolvement of responsibilities for funding areas like medical care and education back to the states, where they constitutionally belong, leaving the federal government with its duly authorized responsibilities for national defense and not much more. Then states (like Massachusetts and California) can make commitments based on local politics without burdening the rest of the country with their schemes. But the trend is opposite.]]> Sun, 08 Mar 2009 16:15:01 -0400
Obama is a great orator (so were FDR and Hitler among previous populists and fascists), but his objectives become clearer by the day: cement his political party in power by making more than 50% of the voting population dependent on the tax-paying minority. Dick Morris calls this Obama's War on Prosperity, and I agree.

You didn't fully address the pernicious effect of the upward-spiraling federal debt, which now totals $10.9 trillion. The interest on the debt in the past fiscal year was $451 billion, or an average rate of more than 4.1%. Foreigners hold $3.1 trillion (28% of the total), with China, Japan, and the oil exporting countries possessing $1.5 trillion or 50% of the foreign holdings. Interest on the outstanding debt accounted for 15% of federal expenditures last year, with $128 billion being sent overseas to institutions that are not all friendly to US interests.

Obama proposes to incur another $1.8 trillion in debt by the end of FY 2009. If he can float this at the current 4.1% average interest rate, the interest expense on the federal budget will increase by $72 billion to $523 billion, with nearly $150 billion going overseas - if last year's interest rates hold. But given the extraordinary growth of US debt, what is the chance that interest rates won't rise? We'll be shipping more than 5% of federal expenditures to foreign institutions this year.

When will we reduce the debt burden? Not on Obama's watch. He only promises to reduce the deficit in four years, using highly dubious and unlikely projections of growth in the economy and tax receipts. As you and other posters have correctly remarked, increasing tax rates will most likely reduce federal receipts.

Where does this wind up? We haven't even addressed the unfunded future liabilities for Medicare and Social Security. There's no way these entitlements can be paid for with current tax receipts, considering a workforce that's declining relative to beneficiaries, so will this add to the deficit and national debt? I see only two possibilities: default on the US debt (like Argentina most recently) or a ravenous bout of inflation and rapidly declining dollar. Something like Carter's malaise and stagflation of the 1970s, only much worse. Coupled with drastic changes in the entitlement programs. So much for saving the "middle class".

Obama and the rest of the Washington crowd prefer to ignore these issues. Perhaps a change of control in Congress in 2010 will put a brake on Obama's malfeasance, but the recent history of Republican profligacy doesn't give me much hope. Given a more perfect union, I'd hope for devolvement of responsibilities for funding areas like medical care and education back to the states, where they constitutionally belong, leaving the federal government with its duly authorized responsibilities for national defense and not much more. Then states (like Massachusetts and California) can make commitments based on local politics without burdening the rest of the country with their schemes. But the trend is opposite.]]> http://seekingalpha.com/article/123533-obama-s-spend-tax-and-borrow-policies-will-wreck-the-u-s-economy?source=feed#comment-411487 411487
Dick Morris says Obama has launched "The war on prosperity", and he's correct. Your point is to begin political resistance to Obamanomics if we're to see recovery from the current "malaise" in our lifetimes. Let me list some of the more destructive features of Obamanomics:

1. Bad mouthing the economy and demonizing the "rich" may satisfy the populists, but it's discouraging the private investments that alone can revive a productive economy. Government employment may put bread on a few tables, but it is never "productive".

2. Raising taxes on investors and investments will also discourage new productive contributions. For this reason, raising taxes on the "rich" will most likely reduce government revenues and increase deficits.

3. The "stimulus" act is a fraud. At an average cost of $225,000 for each of 3.5 million jobs "saved or created", we'd do better to just pass out the cash - at least then the recipients would nearly qualify as "rich" and would be taxed accordingly. Little of the $787 billion goes to "our crumbling infrastructure"; rather the bulk of the money goes to public schools (where less than 50% of the workforce actually teach) and to bail out fiscally imprudent state governments.

4. Increasing the government's fiscal deficit to the levels proposed by Obama is the height of irresponsibility. As with the excess of private debt that led to the current crisis, it can only lead to debt repudiation or hyper inflation. The interest on the debt will soon exceed 25% of the federal budget, much of this going to China and the oil sheiks who hold an excess of dollars. If they don't buy at current interest rates, those rates will increase. And as the value of the bonds and the dollar decrease, our necessary imports (like oil) will be more expensive.

5. Obama's energy policy is another fraud, with subsidies for windmills and "clean coal" as "alternate energy". Some 80% of our oil consumption is for transportation, and I have yet to hear of a windmill-powered car or airplane. Practical initiatives to increase domestic production of liquid fuels are totally lacking from the policy. The imposition of "cap and trade" fees on carbon burners will significantly increase costs to both industry and consumers, all to mollify a band of irrational global warming zealots.

6. I look with dread for the outcome of a new "health care" policy. Whatever arrives will doubtless increase costs and incur rationing - a bureaucrat reaching decisions on whether you or I get to live or die. Demonizing the pharmaceutical companies can only result in decreasing incentives to develop new drugs - where the US industry has been responsible for the lion's share of discoveries to the benefit of our lives. I can only hope there will be a successful constitutional challenge to federal usurpation of this area of the economy.

I could go on, but you get the point. I see a long period of stagflation, but worse than the 1970s, if Obamanomics is not stopped. I'll be making my investment decisions and political contributions accordingly.]]> Tue, 03 Mar 2009 13:43:22 -0500
Dick Morris says Obama has launched "The war on prosperity", and he's correct. Your point is to begin political resistance to Obamanomics if we're to see recovery from the current "malaise" in our lifetimes. Let me list some of the more destructive features of Obamanomics:

1. Bad mouthing the economy and demonizing the "rich" may satisfy the populists, but it's discouraging the private investments that alone can revive a productive economy. Government employment may put bread on a few tables, but it is never "productive".

2. Raising taxes on investors and investments will also discourage new productive contributions. For this reason, raising taxes on the "rich" will most likely reduce government revenues and increase deficits.

3. The "stimulus" act is a fraud. At an average cost of $225,000 for each of 3.5 million jobs "saved or created", we'd do better to just pass out the cash - at least then the recipients would nearly qualify as "rich" and would be taxed accordingly. Little of the $787 billion goes to "our crumbling infrastructure"; rather the bulk of the money goes to public schools (where less than 50% of the workforce actually teach) and to bail out fiscally imprudent state governments.

4. Increasing the government's fiscal deficit to the levels proposed by Obama is the height of irresponsibility. As with the excess of private debt that led to the current crisis, it can only lead to debt repudiation or hyper inflation. The interest on the debt will soon exceed 25% of the federal budget, much of this going to China and the oil sheiks who hold an excess of dollars. If they don't buy at current interest rates, those rates will increase. And as the value of the bonds and the dollar decrease, our necessary imports (like oil) will be more expensive.

5. Obama's energy policy is another fraud, with subsidies for windmills and "clean coal" as "alternate energy". Some 80% of our oil consumption is for transportation, and I have yet to hear of a windmill-powered car or airplane. Practical initiatives to increase domestic production of liquid fuels are totally lacking from the policy. The imposition of "cap and trade" fees on carbon burners will significantly increase costs to both industry and consumers, all to mollify a band of irrational global warming zealots.

6. I look with dread for the outcome of a new "health care" policy. Whatever arrives will doubtless increase costs and incur rationing - a bureaucrat reaching decisions on whether you or I get to live or die. Demonizing the pharmaceutical companies can only result in decreasing incentives to develop new drugs - where the US industry has been responsible for the lion's share of discoveries to the benefit of our lives. I can only hope there will be a successful constitutional challenge to federal usurpation of this area of the economy.

I could go on, but you get the point. I see a long period of stagflation, but worse than the 1970s, if Obamanomics is not stopped. I'll be making my investment decisions and political contributions accordingly.]]> http://seekingalpha.com/article/119005-stimulus-watch-how-the-devil-are-they-going-to-finance-all-of-it?source=feed#comment-378306 378306
By bailing out the most profligate states, BO establishes a precedent that the state politicians can spend anything they want, just pass the bill to the feds. So maybe we consolidate debt at the federal level, but the gross national debt will continue to grow as long as these policies prevail.

BO and his academic economist advisers probably think that by letting the Bush tax cuts on dividends, capital gains, and upper incomes expire in a year they will see a substantial increase in federal revenues. Won't they be surprised when this doesn't happen!

BO is trying to scare the public into pressuring Congress to pass his "stimulus" by claiming imminent "catastrophe". Lindsay Graham said yesterday on the Senate floor that "this bill stinks", and he's right. It's a pigsty with a shovel full of garbage for every Democrat constituency. If the bill gets killed, perhaps the Congress can evolve a more rational and temporary program to alleviate unemployment, but I don't hold my breath. If this bill passes, hold your hats for the inflationary cyclone that will hit.]]> Fri, 06 Feb 2009 10:53:08 -0500
By bailing out the most profligate states, BO establishes a precedent that the state politicians can spend anything they want, just pass the bill to the feds. So maybe we consolidate debt at the federal level, but the gross national debt will continue to grow as long as these policies prevail.

BO and his academic economist advisers probably think that by letting the Bush tax cuts on dividends, capital gains, and upper incomes expire in a year they will see a substantial increase in federal revenues. Won't they be surprised when this doesn't happen!

BO is trying to scare the public into pressuring Congress to pass his "stimulus" by claiming imminent "catastrophe". Lindsay Graham said yesterday on the Senate floor that "this bill stinks", and he's right. It's a pigsty with a shovel full of garbage for every Democrat constituency. If the bill gets killed, perhaps the Congress can evolve a more rational and temporary program to alleviate unemployment, but I don't hold my breath. If this bill passes, hold your hats for the inflationary cyclone that will hit.]]> http://seekingalpha.com/article/118435-the-markopolos-testimony?source=feed#comment-376920 376920 Thu, 05 Feb 2009 10:51:00 -0500 http://seekingalpha.com/article/118104-obama-s-plan-goes-beyond-a-reasonable-stimulus?source=feed#comment-374444 374444 Tue, 03 Feb 2009 11:14:35 -0500 http://seekingalpha.com/article/117758-obama-s-role-in-the-market-s-next-breakout?source=feed#comment-373653 373653
You say "Who here on this board does not agree that this country's infrastructure needs to be rebuilt and modernized?" I can agree that some modernization is needed, and we already have a porcine transportation bill passed in the last congress to do that. The additional funds in the "stimulus" bill for highways amount to $30B - about 3% of the total package. More goes to rail and mass transport for which users do not pay the cost and that need perpetual taxpayer subsidy.

The majority of the appropriations are going to typical liberal Democrat constituencies, e.g.: justice assistance grants ($3B); NSF research ($2.5B); workforce training ($4B); grants to local education agencies ($13B); Pell grants ($15B); and the biggest grunt of all, state fiscal stabilization fund to bail out the most profligate states ($79B). I see no stimulus here for the private sector, just for enlarging the corps of bureaucrats.

With each trillion dollars added to the national debt, we incur another $50B of interest expense each year at the 5% average rate currently paid on Treasury notes and bonds. With $10 trillion of debt outstanding, we devote $500B per year to interest alone (nearly 25% of the federal budget), with no hope of actually paying down the debt. At least some individuals are paying down their own debt, but not the government. Where does this end? In a US default? Are we going to wind up like Argentina?

Forget the idea that BO or Mme. Pelosi know what is needed to resuscitate the economy - neither have any background in business, and BO has hired a bunch of academics and tax cheats to give him economic advice. Experience has demonstrated that increasing tax rates will result in reducing government revenues. The only things shown to reverse the downward spiral we are in are a major war or a reduction in tax rates. Not a "new" New Deal.]]> Mon, 02 Feb 2009 14:39:50 -0500
You say "Who here on this board does not agree that this country's infrastructure needs to be rebuilt and modernized?" I can agree that some modernization is needed, and we already have a porcine transportation bill passed in the last congress to do that. The additional funds in the "stimulus" bill for highways amount to $30B - about 3% of the total package. More goes to rail and mass transport for which users do not pay the cost and that need perpetual taxpayer subsidy.

The majority of the appropriations are going to typical liberal Democrat constituencies, e.g.: justice assistance grants ($3B); NSF research ($2.5B); workforce training ($4B); grants to local education agencies ($13B); Pell grants ($15B); and the biggest grunt of all, state fiscal stabilization fund to bail out the most profligate states ($79B). I see no stimulus here for the private sector, just for enlarging the corps of bureaucrats.

With each trillion dollars added to the national debt, we incur another $50B of interest expense each year at the 5% average rate currently paid on Treasury notes and bonds. With $10 trillion of debt outstanding, we devote $500B per year to interest alone (nearly 25% of the federal budget), with no hope of actually paying down the debt. At least some individuals are paying down their own debt, but not the government. Where does this end? In a US default? Are we going to wind up like Argentina?

Forget the idea that BO or Mme. Pelosi know what is needed to resuscitate the economy - neither have any background in business, and BO has hired a bunch of academics and tax cheats to give him economic advice. Experience has demonstrated that increasing tax rates will result in reducing government revenues. The only things shown to reverse the downward spiral we are in are a major war or a reduction in tax rates. Not a "new" New Deal.]]> http://seekingalpha.com/article/116063-tim-geithner-and-taxes?source=feed#comment-364071 364071
On top of his weak excuse that he "didn't know", the IMF - his employer - had transmitted clear instructions to the effect that its US employees were individually liable for their self employment taxes. Either Timmy trashed this communication, or he read it and ignored it.

Timmy is dumb or an out-and-out tax cheat. He has no business running the Treasury, in my humble opinion as a taxpayer.]]> Fri, 23 Jan 2009 10:28:22 -0500
On top of his weak excuse that he "didn't know", the IMF - his employer - had transmitted clear instructions to the effect that its US employees were individually liable for their self employment taxes. Either Timmy trashed this communication, or he read it and ignored it.

Timmy is dumb or an out-and-out tax cheat. He has no business running the Treasury, in my humble opinion as a taxpayer.]]> http://seekingalpha.com/article/115242-six-companies-poised-to-gain-from-a-natural-gas-auto-mandate?source=feed#comment-360002 360002
I for one would not want to sacrifice range, or trunk space, or a rear seat, or accept the risks of CNG in a collision let alone leakage in my garage.]]> Mon, 19 Jan 2009 13:04:52 -0500
I for one would not want to sacrifice range, or trunk space, or a rear seat, or accept the risks of CNG in a collision let alone leakage in my garage.]]> http://seekingalpha.com/article/114521-watch-for-yourself-60-minutes-oil-story-was-spot-on?source=feed#comment-354641 354641
In this case, slack on the supply side of crude production will provide customers alternatives to buy at lower prices than the "speculator" asks. No slack, the "speculator" ratchets up the price. Seems elementary to me.

Of course a speculator with limitless resources can "corner" the market to achieve his price objective, but I see no evidence (or possibility) that this happened in a market as big as the global oil market.

Misolarman came close to seeing this connection, and I agree with his negative view of the idiots in Washington, but opening new domestic areas to drilling obviously did not instantly increase supply.

When demand dropped (just a little), buyers had alternative supplies and the market price fell. CBS should be ashamed for not getting this point into their report.

"Speculators" BAD; investors GOOD; producers BETTER.]]> Tue, 13 Jan 2009 13:09:19 -0500
In this case, slack on the supply side of crude production will provide customers alternatives to buy at lower prices than the "speculator" asks. No slack, the "speculator" ratchets up the price. Seems elementary to me.

Of course a speculator with limitless resources can "corner" the market to achieve his price objective, but I see no evidence (or possibility) that this happened in a market as big as the global oil market.

Misolarman came close to seeing this connection, and I agree with his negative view of the idiots in Washington, but opening new domestic areas to drilling obviously did not instantly increase supply.

When demand dropped (just a little), buyers had alternative supplies and the market price fell. CBS should be ashamed for not getting this point into their report.

"Speculators" BAD; investors GOOD; producers BETTER.]]> http://seekingalpha.com/article/114139-wealth-watch-redefining-rich-and-poor-in-a-shrinking-global-economy?source=feed#comment-352770 352770
You generalize on the "haves" and "have nots" without differentiating among the various sources of wealth and their societal values. For example, should we treat all wealth equally, among:
a) Corporate executives who climbed the ladder but contributed little or oversaw the failure of their enterprise (e.g.GM);
b) Entrepreneurs who worked 100-hour weeks to build a successful enterprise that provides employment and a useful product;
c) Movie and rock stars, ball players, and like entertainers who produce little of lasting value;
d) Unionized workers who extort incomes well above their competitive worth;
e) Savers who patiently acquire assets and avoid debt.

I believe that use of the tax code to equalize burden is unfair, inefficient, and misguided in terms of incentive or penalty. Better to make use of the market and shareholder votes to rein in excessive pay and reward true value. Heaven save us from a "surprise wealth tax" that panders to the class differentiation that underpins the incoming administration. Let's talk more about a flat income tax rate that requires every citizen to bear a proportionate share of the cost of government.

Making worthless enterprises "go away" in bankruptcy is a great leveler - in the tradition of Schumpeter's "creative destruction". Saving GM from this fate with a taxpayer bailout is an abomination, and I'm sure we'll see more of the same in the coming years as political motives trump economic.

In your first response to a comment, you wrote: "I'll vote for the biggest stick (our military)..." This doesn't need to imply belligerence on your part, or that of your compatriots - just a realistic view of the world around us. Of course the Great Depression didn't end until WW II, but I hope we won't be faced with the same resolution this time. The world is a scary place, though - think of the inevitable proliferation of lethal missiles and the economic catastrophe if the Strait of Hormuz were closed. Expenditures on missile defense and an invincible Navy seem more than warranted. Remember, too, that defense spawned the signature technologies of our time: nuclear power, the computer, and the internet (originally ARPAnet).


]]> Sun, 11 Jan 2009 19:02:14 -0500
You generalize on the "haves" and "have nots" without differentiating among the various sources of wealth and their societal values. For example, should we treat all wealth equally, among:
a) Corporate executives who climbed the ladder but contributed little or oversaw the failure of their enterprise (e.g.GM);
b) Entrepreneurs who worked 100-hour weeks to build a successful enterprise that provides employment and a useful product;
c) Movie and rock stars, ball players, and like entertainers who produce little of lasting value;
d) Unionized workers who extort incomes well above their competitive worth;
e) Savers who patiently acquire assets and avoid debt.

I believe that use of the tax code to equalize burden is unfair, inefficient, and misguided in terms of incentive or penalty. Better to make use of the market and shareholder votes to rein in excessive pay and reward true value. Heaven save us from a "surprise wealth tax" that panders to the class differentiation that underpins the incoming administration. Let's talk more about a flat income tax rate that requires every citizen to bear a proportionate share of the cost of government.

Making worthless enterprises "go away" in bankruptcy is a great leveler - in the tradition of Schumpeter's "creative destruction". Saving GM from this fate with a taxpayer bailout is an abomination, and I'm sure we'll see more of the same in the coming years as political motives trump economic.

In your first response to a comment, you wrote: "I'll vote for the biggest stick (our military)..." This doesn't need to imply belligerence on your part, or that of your compatriots - just a realistic view of the world around us. Of course the Great Depression didn't end until WW II, but I hope we won't be faced with the same resolution this time. The world is a scary place, though - think of the inevitable proliferation of lethal missiles and the economic catastrophe if the Strait of Hormuz were closed. Expenditures on missile defense and an invincible Navy seem more than warranted. Remember, too, that defense spawned the signature technologies of our time: nuclear power, the computer, and the internet (originally ARPAnet).


]]> http://seekingalpha.com/article/113184-how-congress-can-solve-the-recession-outsourcing-and-social-security?source=feed#comment-346448 346448
First, eliminate social security for youngsters (age 30 and below) and apply the savings in employer payroll tax contributions to the match in 401k's. Capital gains and dividend taxes won't be collected on the tax-deferred retirement accounts. Social Security is a Ponzi scam that won't be available to the youngsters anyway. Raising the limits on retirement contributions and taxing income outside these accounts will encourage long-term savings.

Eliminating corporate income taxes will eliminate a lot of unproductive busywork by lawyers and accountants, and will inevitably reduce costs to consumers (who wind up paying the tax anyway). Sure the lobbyists for these vultures will rebel, but that's what politics is for: compromise.

Raise taxes on the rich? Depends on how much. I keep in mind that "the rich" are not all businesspeople, but include fat-cat Democrats like lawyers, movie and music glitterati, and ball players. But the businesspeople are most likely to invest sensibly, and if they can shelter more of their income in tax-advantaged accounts, why not?

Tax carbon? Here's where I disagree, since the real cost will be spread across all consumers in proportion to their energy use - and I don't really believe the AlGore hype about imminent danger to civilization from CO2. Let economics determine how individuals and businesses reduce their "carbon footprints".

Encouraging more tax-free savings has the potential to reduce the tax burden and the resources available to the dummies in congress - all to the good.

Keep the debate rolling.]]> Mon, 05 Jan 2009 11:49:21 -0500
First, eliminate social security for youngsters (age 30 and below) and apply the savings in employer payroll tax contributions to the match in 401k's. Capital gains and dividend taxes won't be collected on the tax-deferred retirement accounts. Social Security is a Ponzi scam that won't be available to the youngsters anyway. Raising the limits on retirement contributions and taxing income outside these accounts will encourage long-term savings.

Eliminating corporate income taxes will eliminate a lot of unproductive busywork by lawyers and accountants, and will inevitably reduce costs to consumers (who wind up paying the tax anyway). Sure the lobbyists for these vultures will rebel, but that's what politics is for: compromise.

Raise taxes on the rich? Depends on how much. I keep in mind that "the rich" are not all businesspeople, but include fat-cat Democrats like lawyers, movie and music glitterati, and ball players. But the businesspeople are most likely to invest sensibly, and if they can shelter more of their income in tax-advantaged accounts, why not?

Tax carbon? Here's where I disagree, since the real cost will be spread across all consumers in proportion to their energy use - and I don't really believe the AlGore hype about imminent danger to civilization from CO2. Let economics determine how individuals and businesses reduce their "carbon footprints".

Encouraging more tax-free savings has the potential to reduce the tax burden and the resources available to the dummies in congress - all to the good.

Keep the debate rolling.]]>