Saturday, June 28, 2008

US halts solar energy projects over environment fears 

This story is yet another example of how the only acceptable energy technology is the one that isn't being used.

As Glenn asks, "Nukes are out, coal is filthy, wind power destroys Ted Kennedy's view, and solar leads to "environment fears." Do they just want us all to freeze in the dark?"

If I recall correctly, the environmental laws of this country are designed to look only at the environmental impact of any given project, and the value of the project to the public is not permitted to be considered. Maybe it's time for our lawmakers, in their infinite wisdom, to revisit this issue.

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Congressman Delahunt and David Addington 

By now anybody who's interested has seen or read about Congressman Bill Delahunt's (D-MA) exchange with David Addington, VP Cheney's Chief of Staff, that was broadcast on C-SPAN last Thursday. I have seen the video, and the following excerpt from CNN is accurate:

Delahunt asked repeatedly whether the topic of waterboarding, a controversial interrogation technique that simulates drowning, ever came up.

Addington replied that he could not discuss that because "al Qaeda may watch C-SPAN."

"Right," Delahunt responded. "Well, I'm sure they are watching, and I'm glad they finally have the chance to see you, Mr. Addington."

"Yeah, I'm sure you're pleased," Addington shot back.

"Given your penchant for being unobtrusive," Delahunt said of Addington's ability to stay behind the scenes.

I rerely write members of Congress about anything, especially when the Member doesn't represent me, because I really don't think it accomplishes anything except to prompt a canned reply. However, I think this is a special case. I sent the following to Mr. Delahunt this morning:


I watched your comments to David Addington on the subject of Al Qaeda watching C-SPAN, specifically this remark: "Well, I'm sure they are watching, and I'm glad they finally have the chance to see you, Mr. Addington."

I have also read that you have stated through your spokesperson that it was never your intent to identify Mr. Addington as a target for Al Qaeda, and that you recall saying "I" not "they" in the sentence quoted above.

Assuming the reports of your "explanation" or "clarification" or whatever you characterize it are accurate, I am forced to conclude that you, sir, are a liar, a fool or both, and in any case you are a disgrace to your office, your constituents, and the Congress of the United States. And since it appears you will neither stand by your remark nor apologize for it, you are a coward to boot.

May your term in Congress be short.
Now, I don't think my email will have the slightest effect on Mr. Delahunt. (Leopards don't change their spots, etc., etc.) but it definitely made me feel better.

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Monday, June 23, 2008

Obama's Endorsements 

Yes, I know Obama has no control over who endorses him, but it seems to me there's a message to US voters in the fact that such luminaries as Castro, Qaddafi and Kim think he should be the next President.

BTW, on his "presidential seal" trick, I think whether you like it or not is a function of whether you like Obama or not. I think it exhibits arrogance and find it somewhat off-putting. I regard the fact that he's come out with it as an indicator of his character and judgement. Isn't that what he wants--to be evaluated for the office of President based on his character and judgment?

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Thursday, June 19, 2008


The school year is over and my daughter no longer needs to schlep 40 pounds of books back and forth between home and school. Thank heaven for that, but the ordeal got me thinking about alternatives. It struck me (and others, I suppose) that one solution might be a variation on Amazon's Kindle reading device, as soon as the technology becomes available. I call it the Edu-Kindle, for want of a better name.

As I envision it, the Edu-Kindle would substantially resemble the existing Kindle, with a few major differences. First, because textbooks present a lot of information on a page, the display format would be bigger, say 8" x 10" (12 " diagonal), or at least 6" x 9" (10.8" diagonal). This larger size would be particularly useful for presenting diagrams and graphs in math and science classes. Second, the display would be in color, which would enable much more interesting and attention-grabbing displays, not to mention the additional clarity that color adds to a presentation. Finally, the Edu-Kindle would be assigned a special account that would allow the student to download texts and other materials from a website controlled by the educational institution/school district, and only from that site, to prevent the students from downloading, um, inappropriate materials. Could it be hacked? Probably, but I don't think most people would bother.

I can see many advantages to such a device and system over the present paper textbooks. First, the Edu-Kindle could be issued (or sold, on very easy terms) to a kid at some early grade and could be used right through college. (Perhaps upon graduation from high school the device could be unlocked so the student could use it like a regular Kindle.) The school district would never have to buy and stockpile tons of textbooks for distribution each year, and then collect them at the end of the year. University students would always have the latest version of their texts and other materials. Updates to the texts would automatically occur as the publisher issued them, or each year when the students downloaded the materials, or both, depending on the nature of the updates. The educational materials themselves should be less expensive to buy, because of the cost savings resulting from not having to print, bind and ship the paper texts.

The students should love the Edu-Kindle, because they would only have to carry one device, weighing only a pound or two, and it would have all the course materials for all their subjects. Moreover, since the Kindle has email capability, the teachers could email their homework assignments to the students, and the kids would always have the assignments at their fingertips. If the kids needed to read a specific piece of literature, say Jane Eyre or Julius Caesar, those materials could be made available at lower cost than a paperback, and there'd never be a problem with it being checked out of the local library or out of stock at the bookstore.

Theft shouldn't be a problem because every student would have one, and in any event either the student's family or the school district could purchase insurance against loss of the Edu-Kindle.

I realize that the textbook publishers will have to stretch to get their heads around this idea, but if the market is there, they'll jump on it just to make sure some other publisher doesn't ace them out. The schools will have difficulty with it at first, also, but with costs always being an issue, it seems to me that there would be tons of savings in the long run.

I'm sure that I have missed a lot of details that would have to be addressed to make this idea a reality, but I can't think of any that would be insurmountable. I have no idea whether a color e-paper display is presently available in the proper size at a reasonable cost but I do know that such displays have been invented, and I'd be willing to bet the unit cost would come down as production ramped up.

So how 'bout it, Jeff, could Amazon pull this idea off? Go ahead, I dare ya!

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Saturday, June 07, 2008

The Road to Hell 

Patterico's Pontifications has a case study in microeconomics showing how well-intentioned laws can have a perverse effect on those whom they were intended to benefit.

One thing that really scares me about the possibility of Obama winning with a filibuster-proof majority in the Senate is that we will be inundated with well-meaning (and maybe not so well-meaning) legislation that ultimately will royally screw up our economy and perhaps lead to a worldwide depression as in the 1930s. I am not a scholar of history, but I know that "well-meaning" legislation played a huge part in creating the last depression (see Smoot-Hawley) and there's no guarantee that it won't happen again, because our elected representatives in Washington are largely even less historically literate than I am.

One of the panelists in one of the money programs on Fox News Channel this morning made the point that the Dems always create jobs. That may be true, but unfortunately many of those jobs are often make-work government jobs that don't do much for the economy as a whole. As things stand right now, I think both parties are guilty of going too far in their respective directions, especially when it comes to pork, but as between more government intervention in the economy and less, I prefer the latter.

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Tuesday, June 03, 2008

Musings on the Subprime Crisis and Other Economic Stuff 

My dad asked me to comment on the subprime lending crisis, and so I did. After doing so, I figured, "what the heck--I should put this on my blog, and so I did. I invite any reader to correct and educate me with regard to errors that I'm sure are in there.

On finance and economics, I'm no expert, and probably have some facts wrong, but here goes:

The word I'm hearing and reading is that the subprime financial crisis is pretty much over, although there's still cleanup to do in the aftermath. I haven't noticed any impact in our neighborhood, except that the homes that happen to be for sale (one on our street, zero to two each on neighboring streets--not an unusual number, historically) are staying on the market a lot longer than in the past and are going for maybe 10% to 15% lower than the peak price. If we were to sell, that would put our house in the $800k-$850k range. I suspect newer neighborhoods and developments like Bressi Ranch and La Costa Greens may be impacted more because they are newer and the developers sold for much higher prices than we originally paid, with much looser credit requirements imposed by lenders.

As I understand it, the whole debacle was enabled by a combination of loose money policy and greed (surprise! surprise!). The Fed essentially created money by keeping its rates low over many years (since 2002), and that money had to go somewhere. People started to buy real estate not so much as a place to live as a vehicle for investment, and they wanted to make a killing so when they sold, they asked for (and got) significantly more money than they'd paid.. (One of Pat's co-workers and her husband went up that ladder, but they are now stuck with a very expensive house and high mortgage and tax payments, with nobody to sell to.) Developers saw the demand and charged what the traffic would bear, but in the end they overbuilt, adding to supply even as demand fell off. Lenders loosened their credit and down payment requirements for home buyers and refinancers, failing to verify income and lending 100% to value, figuring that they would have enough equity cushion because the prices would continue to rise, or at worst level off. Then those lenders sold the loans to financial firms who bundled and "securitized" them and sold the payment streams to institutional investors like your Japanese banks and other financial companies not just in Japan and the US, but all around the world. All this eventually turned into a "bubble" (or near-bubble).

The bubble burst when the prices got high enough to cause demand to slack off. Some people, especially speculators, who had bought (or refinanced) with nothing down (or took all the equity out of their homes), couldn't find a "greater fool" to sell to, and/or for one reason or another couldn't or wouldn't pay their mortgages, so they defaulted and the homes went into foreclosure. The crisis arose because the investors in the market for those mortgage-backed securities no longer knew how much the mortgages backing the securities (hence the securities themselves) were worth, and nobody was sure who was legally going to have to bear the losses (as between the "bundlers" and the institutions who bought the securities). No holders of the securities could sell or borrow against them because no prospective buyer or lender knew what they were worth, either, and the market in them collapsed, This led to a major liquidity crisis, which in turn caused runs on several investment banks who had large holdings of those mortgage-backed securities, perhaps most famously Bear Stearns.

The Fed originally tried to fix the liquidity problem by pumping even more money into the economy (which has contributed in a major way to the rise in the dollar price of oil and gold) but didn't really get a handle on it until the Fed told banks they'd accept mortgage-backed securities as collateral. Somewhere around that time a consensus formed that the worst-case scenario would be a 30% decrease in value of the mortgage-backed securities, and the market for those securities re-formed. Now the holders of the securities are "marking to market" and reporting losses in their financial statements, but the real "subprime" crisis is over.

IMHO the current problem is the devaluation of the dollar caused by the excess money supply, combined with the true demand pressure for energy resulting from the developing economies of China and India, which together account for almost 40% of the world population. Our politicians aren't making it any better, either, because they want lower energy prices, but won't allow drilling in ANWR or off the California or Florida coasts, won't allow development of oil shale in Wyoming and Colorado, and won't do anything to make it easier to site, construct and operate any new refineries or coal-fired or nuclear electric generation facilities. Nor will they get rid of the import duty on ethanol from Brazil and elsewhere.

What's happened in the retail real estate market (especially the formerly red-hot markets like California, Florida, Las Vegas and a few other places) is that the mortgage lenders have tightened up their credit and down payment requirements to historical levels. As a result fewer people qualify for mortgages and the demand for houses has slackened. Developers with inventory have reduced their prices, and sellers of existing homes have done the same. Eventually prices will get low enough (maybe already have) to clear the market of the surplus supply and prices will stabilize, but it will take time and we won't know it until we look back and see what's happened.

Ironically, the fundamentals have always been strong. According to Neil Cavuto (Fox News Channel business guru) only 4% of all US mortgages are in arrears, much less in default. I've heard and read other authorities say that in much of the US (especially the heartland) neither foreclosures nor prices have changed much in the last year. FDR was apparently right when he famously said, "The only thing we have to fear is, fear itself."

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On Scott McLellan 

I watched O'Reilly's interview with McLellan last night, and based on what came out of McLellan's mouth and his demeanor, I came away with the impression he's either hopelessly naive or a weasel.

I can't imagine anyone of average-or-above intelligence who's neither psychotic nor a drug-addled loser surviving a job like White House Press Secretary while maintaining a state of hopeless naivete. I don't think he would have gotten the job if he didn't have at least average intelligence, and I don't think McLellan is either psychotic or a druggie. Perforce I must conclude he's a weasel.

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