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Friday, April 28, 2006Good God, Even More Barrels of LaughsMany people probably think U.S. oil consumption has grown every year since World War II. This is not quite true. Oil consumption dipped from 1973 to 1975, from 1979 to 1983 and from 2000 to 2003. In fact, since 1970, per person energy consumption has only gone up by only 1.7%. From 1949 to 1970 per person energy consumption increased 55%. So, we are becoming more efficient. Per person average petroleum use currently averages about 3 gallons each day In the 1950's it was 2 gallons per person per day but in 1978 it was higher at about 3.6 gallons per person per day. So, again, we are becoming more efficient though there's obviously room for more improvement. Blame CanadaNot to infringe on the Canadian territory of Dave Nelson but I've noticed the Canadian dollar continues to strengthen. It reached a 14 year high against the U.S. dollar recently and ABN Amro is predicting the 1.05 CAD$/US$ by the end of the year. I grew up much of my life on the Canadian border and I don't ever remember the Canadian dollar being worth more than the American. Guess we'll wait and see if ABN Amro is correct. Thursday, April 27, 2006Even More Barrels of Laughs
Many people probably think U.S. oil consumption has grown every year since World War II. This is not quite true. Oil consumption dipped from 1973 to 1975 and from 1979 to 1983 and from 2000 to 2003. IN
Even More Barrels of Laughs
Many people probably think U.S. oil consumption has grown every year since World War II. This is not quite true. Oil consumption dipped from 1973 to 1975 and from 1979 to 1983 and from 2000 to 2003.
More Barrels of LaughsLots of news reports and commentators are pointing out that the price of oil is still historically low in constant dollars, i.e, when taking into account inflation. It's true that in constant dollars the price of oil today is cheaper than in 1980 but it's also true that today's price is more expensive than any time in the last 35 years except for the early 80s. For a five year period, from 1980 to 1985, oil was more expensive in constant dollars than it is today. However, other than that period, since 1970, oil prices have never been higher than they are today. Of course, although oil is now expensive, it is also true oil plays a smaller role in our economy today. According to Goldman Sachs, in the early 1980s when oil prices were at an all time high, gasoline expenditures accounted for 4.5% of U.S. GDP and 7.2% of U.S. consumer spending. Today, those numbers are 2.6% and 3.7% respectively. To start to approach those percentages, gas prices would have to reach at least $4 per gallon. As I noted yesterday, in the short term there is a good chance prices will moderate. However, in the long run prices are likely to increase, perhaps breaking the $4 per gallon mark. Pessimists think we have already peaked in oil production. Many dispute this. But even the optimists only delay the peak about 30 years or so. That's not really that far from now. It's in the life time of all but the older boomers (unless life expectancy radically increases which might very well happen). In other words, whether the peak is today, five years from today or 30 years hence, it's high time to start thinking of alternative energy sources. Some will advocate hydrogen, others nuclear and others wind or solar. Let the debate begin. Wednesday, April 26, 2006Bush's Best FriendMore often than not Bush's best friends are his critics who continually overreach. Case in point is the often sensible Andrew Sullivan who is now blaming Bush for abusive police.
Now, no one's a bigger critic of Bush's pro-torture policies than me but if Andrew Sullivan thinks police abuse started because of George Bush he hasn't read very many Raymond Chandler stories. Blaming Bush for some moronic Tennessee cops is idiotic and all Sullivan and others who irrationally go after Bush with such clap-trap accomplish is to make Bush look reasonable compared to his out of control critics. Such hysteria will only make it easier for Bush to get away with his more irresponsible policies and actions. A Barrel of LaughsAs we become hysterical over the price of filling up our gas guzzlers it's worth noting that U.S. inventory levels are 11% above the five year average so it wouldn't be surprising to see oil prices come down in the short term. Of course, in the mid to long term prices are still likely to increase due to increased demand in the rapidly developing world. So, enjoy the short term decrease while you can and wait for those new alternative fuels to hit the market. Tuesday, April 25, 2006The End of ManufacturingFor those that worry about the continued loss of manufacturing jobs in America, remind them of two things. First, manufacturing jobs are disappearing all over the world, including in China, as manufacturing processes becomes more efficient. Second, 100 years ago 30% of jobs in America were in manufacturing (30% were also in farming--where's the alarm about the disappearing agricultural jobs?). Today, 3% of the U.S. workforce are employed in factories. The loss of manufacturing didn't begin in 2000 and isn't a result of outsourcing. Deficit SchmecifitI've often worried in this space about our budget deficits and long-term government debt (and consumer debt too) but haven't spent much time on the trade deficit or current account deficit. I don't worry about that as much partly because it is a symptom of our consumer debt and partly because I don't think it matters as much as our other deficits. Case in point, according to Cafe Hayek:
Considering we rose to a world economic power during those years I guess a current-account deficit may not be as bad as some think. Monday, April 24, 2006Earth DayIt was a beautiful extra warm afternoon the day after Earth Day here in lovely, Seattle Wa. As always on Earth Day, and especially with gas above three dollars a gallon, the New Amish continue their decades old war against the automobile. Nearly all the models show car emissions being a big cause of global warming. But rather than make those cars cleaner, the New Amish want cars eliminated, even though they are one of the great social equalizers in a world increasingly not. The New Amish ally themselves with the rich and powerful who also want everyone off the roads so they can drive down those streets unimpeded. This all happens especially in American cities even as the people of China, Vietnam, India and other developing country populations grasp the steering wheels of freedom in ever greater numbers. Instead of fearing technology and futilely trying to turn back the clock, the New Amish should embrace technology to solve our environmental problems. Self Driving TestThere have been huge strides made in technology recently that will allow cars to drive themselves. I'd guess we're about 10 years away from that being an everyday reality. This is one of the ways we can deal with our traffic and environmental woes. As the Seattle region makes decisions on how to replace the viaduct, whether to add a one-tenth sales tax increase for more bus service, figure out a fix for the Mercer mess and all the other upcoming transportation decisions, we should think about the transformative transportation changes headed our way. I'd like to see the city and region develop a plan that would incorporate this coming technology. Or, perhaps we should hold a contest to devise a new system of transportation centered around self-driving cars. China GroveBack from my fling with President Hu. There's all sorts of stories I could tell but not in public. Suffice it to say the Chinese and local businesses couldn't have been more happy. And the kids. The kids were happy too. The kids at John Stanford International School, that is, who met with President Hu, and drew Chinese characters with him. One hopes the publicity of this meeting will lead to more teaching of languages in our schools at the elementary school level, where currently there is nearly none. Thursday, April 13, 2006Shanghai'd
Probably no posting until Wednesday, April 19 after Prez of China has left town.
President Hu
upcoming visit still got me going like a crazy man. More later.
Tuesday, April 11, 2006Cars Don't Kill PeopleThe rush to stop global warming is centered on getting people out of their cars. The recent announcement by Seattle on its initiative to cut global warming pollutants was certainly centered on that. This is really nothing new--for more than 30 years the New Amish have concentrated their anger on the automobile. They've joined by the rich and famous who want the rest of us off the streets and on buses and trams so they can rule the roads unmolested. The problem is two-fold: one, car travel is one of our great social equalizers in an increasingly unequal world. Two, people don't want to get out of their cars so trying to save the environment that way is misguided. Kevin Drum notes that even with a near doubling of gas prices demand has not dampened. He rightly wonders whether one can raise gas prices enough to reduce demand. So the answer is not to get people out of their cars but to make the cars more environmentally safe. Technology, baby. I wish Greg Nickels and others would focus on that in their efforts to combat global warming. If they don't, their efforts are doomed to fail. Commodities, babyGold is over $600 an ounce, oil is at $69 per barrel (recall my predictions in January), copper and silver are at 20 year highs. So far, the commodity bull market continues in 2006. Fourth Avenue Freeze OutOutside my office window on fourth avenue of downtown Seattle, tens of thousands marched on the issue of immigration. I'm not sure what their march was about since I haven't followed the immigration bills currently stuck in Congress. I noticed two things about the march: lots of American flags carried by the marchers and mostly Spanish language used. Take that for what you will. Monday, April 10, 2006Hello I Must Be GoingOne thing that continues to puzzle me is why those calling for the U.S. to get out of Iraq immediately think this somehow will make the situation better. I'm not talking about the crazy Left such as ANSWER or Cindy Sheehan or others of their ilk. I'm talking about serious analysts such as Kevin Drum at Washington Monthly who claim it is the U.S. presence that is causing the civil war. They continually state this but offer no compelling evidence that this is the case. In fact, it is becoming increasingly clear that it is only the presence of U.S. troops in Iraq that is preventing a complete melt down in Iraq. In a Sunday New York Times article, Iraqi General Qais Hamza al-Maamony says of the violence in an area called Babil, "If U.S. troops left Babil, the next day would be civil war." This is, of course, unfortunate but isn't Drum and his crowd acting like those on the right he accuses of living in a fantasy world when claiming the only solution is for the U.S. to get out of Iraq and to get out now. As I've stated many times before, I was against the U.S. going to war in Iraq but now that we're there we have a responsibility to try to make things right. If we left today the country would descend into bloody chaos and then probably into Iranian rule or Taliban-like rule. Sure no more U.S. troops would be killed in Iraq but lots of Iraqis would--and eventually many others would be pulled into the bonfire, including Americans. There may come a point where we decide there's nothing more we can do to make Iraq stable and we have to leave it to such chaos and deal with the consequences. We aren't yet at that point. Thursday, April 06, 2006SamSpeak Hears a Hu
Working on President of China's visit taking more time than anticipated; sorry for the light blogging. But, I'm sure I'll have all under control for more frequent posting, probably later today or this weekend.
Wednesday, April 05, 2006And You Thought We Have ProblemsToo many Americans aren't saving for retirement and way too many pension plans are underfunded (including government plans, btw). But it could be worse, we could be Britain where "97 of the 100 biggest listed companies have deficits in their pension funds, while the liabilities of unfunded schemes for public-sector employees, if taken into account, would more than double the national debt." A Japanese federal reserve official noted recently that one reason the U.S. dollar survives as the world's go-to currency is that despite all our problems, everywhere else is screwed up too. As I've said before, we're all playing a giant game of global chicken. It's Only a JokeSomeone sent me this joke. It's rude and wrong, so, of course, I post it here:
Tuesday, April 04, 2006The ShredderThe Consitution continues to be trampled, this time from the right with the Supreme Court passing on the Padilla case allowing an earlier Appeals Court ruling to go uncontested. In other words, the executive branch can arrest and detain American citizens and take away their Constitutional rights (and yes, I know Padilla is now going to trial but the precedent remains unchallenged). This subverts one of the most important tenets of our country--the rule of law rather than the rule of one powerful executive. It is a disgrace and we will eventually regret it. The Delay is OverI have no idea if Tom Delay is guilty of breaking any laws but good riddance nonetheless. Delay aided and abetted Bush's crimes against limited government. His goal was more government as long as he and his political kin were in charge. Monday, April 03, 2006Ask NotDidn't make much news last week but consumer spending slowed to a six month low at the same time that incomes grew at their slowest rate since late last year. Could mean nothing since lots of other measures are looking pretty good for the economy or maybe the other shoe will finally drop. Factory orders were down too. Hmm.
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