Enter the Millennial Generation, Exit Reaganism.

       There is an excellent article by Peter Beinart on the Bill Moyers web page which asks,  "Will  disillusioned  millennials end the Reagan/Clinton era?"   It is a bit long, but absolutely worth the time to read it.  It is the most astute analysis of where we are and where we are going in American politics that I have ever read.

Elysium review

I saw Blomkamp's new movie, Elysium last night.   Though not, in my opinion, as good as District 9,  which was an absolute classic,  if you want an action/adventure thriller, it certainly does the job.  I think that Blomkamp is a modern day Jonathan Swift.  Both he and swift can be seen as passionate social critics, framing their criticism in strange si-fi adventures, and they both paint with pretty broad strokes.   But Swift did it with more humor and irony.  After you see Elysium, rent the DVD for District 9.

Importance of Pigs

The pig, if I am not mistaken,

Supplies us sausage, ham, and bacon.

And yet, the porkers give us more,

Like thyroid drugs, T-3 & 4.

(To list the other things from glands

Would take too many ampersands.)  

The Economy Needs More Spending

            Alan S. Blinder, a Princeton economics professor and former vice chairman of the Federal Reserve,  contributed a guest editorial to the July 8 Wall Street Journal entitled "The Economy Needs More Spending Now."  Since Blinder is a moderate, his views are a refreshing contrast to  the ultra-right-wing rants that generally fill the editorial pages of that august journal.

            Blinder says that besides politics, the chief cause of our economic policy failures is the failure to distinguish between short-term problems and long-term problems.   Different ailments require different prescriptions.  The medicine for short-term problems, used in isolation, could make our long-term problems worse.   But trying to apply long-term remedies in the short-run will only cripple the economy such that no long term goals are accomplished anyway.

            The problem with the American economy right now is a short-term problem---lack of spending.  The only remedy is to increase spending.   This could be done by either increasing government spending at all levels, lowering taxes on working people so that they have more to spend,  or giving investment tax credits to manufacturers so that they buy more equipment, etc.   This is what "The Stimulus"  did, and it worked.  The GDP would be at least 2 percentage points lower had this not been done.  And if "The Stimulus" had been twice as large, we would have gained an additional  2 points, and by now we would have full employment.  Everyone in Congress knew this. 

             So why didn't we pass a large enough stimulus to do the job?  Because everyone in Congress was also worried about our long-term problem,  which is our accumulating national debt.  The Clinton administration had left a balanced budget, but Bush began his administration with a huge tax cut, and then went on to fight two wars without increasing taxes to pay for them.  So when the market crash came in 2008, many in government felt that they had very little room to maneuver,  since they felt that we were already drowning in debt.  Yet if they had passed a large enough stimulus, everyone would now have a full time job,  social expenditures would be lower, and the increased tax collections from wages would easily balance the budget. But instead of fixing our short-term problem,  we tried to use austerity to fix the long-term problem first.  This is like letting the accident victim bleed to death while carefully building the perfect cast to put on the broken bones.  Blinder explains the difference between short-term and long- term solutions as the difference between demand-side and supply-side solutions. He writes:

            "Long-run growth is supply-determined:  it depends on the economy's ability to produce more goods and services from one year to the next. To accomplish that you need four basic ingredients:  more labor, more capital, better technology, and--if you can manage it--a better-functioning economy that utilizes these inputs more efficiently.  These four ingredients constitute the essential core of supply-side economics, and deficit reduction helps boost growth via the second:  more capital.

            In the short-run, however, output is demand-determined. The big question is how much of the economy's productive capacity is used. And that depends on the strength of  demand----the willingness of businesses, consumers, foreign customers and governments to buy what American businesses are able to produce. When demand falls short of supply, deficit reduction hampers economic growth by reducing demand even further.  "  (Emphasis mine)

            Blinder explains that a society can increase capacity by building more plant and equipment and training more workers, but if there is insufficient demand, all that new capacity would just sit idle. This is about what has happened since the beginning of the Great Recession. Blinder says that we must treat both the long-term and the short-term problems. To do this, we should not try to aggressively cut spending now, while the economy is weak and needs all the spending it can get.  Instead, we should spend aggressively today to end the recession, while passing laws today that will cut the deficit, but take effect only several years down the road, when the economy is fully recovered.  While Blinder asserts that deficit reduction today simply makes the recession worse by dampening demand, he does not go into much detail as to how it does this.   Some months ago, I posted on this blog an essay entitled, "Why Supply Side Economics Doesn't Work, " in which this is explained.  Check it out.

            While Blinder's remarks were addressed to the problems of the American economy, they would be even more applicable to the problems of the Europeans, who have used austerity even more foolishly than we Americans have.

Fear of Hard Work

            We have all heard the old joke, "I'm not afraid of hard work--I can stand there and watch it for hours!"   Is it possible that today we have bred such a generation of wimps that there are people who are not only incapable of performing hard work---but who cannot even stand to see it done by others?

            Let me tell you a story.   Many years ago, I was working as a young construction worker. I was a construction electrician, an IBEW Journeyman Wireman  doing industrial work.   One day there was a call for a crew to replace the electrical service at a new office building.   This was a long, one-story building.  We were having a heat wave---the temperature was close to 100 Fahrenheit, and the relative humidity was nearly 100 percent.   The air conditioning equipment in this new office building had overloaded the electrical service, and it had failed.

            The plan was to replace the original service entrance conductors with three 500 MCM copper cables, along with a 350 MCM cable for the neutral conductor.   A 500 MCM cable is a stranded cable about the diameter of a broom handle, not counting the insulation, and it weighs about 4 lbs per foot. We had brought one large reel of 500 MCM cable which was set up on jacks, and we were stringing out, measuring, and cutting each of the three conductors to be used.   The building had a long central corridor, and we would pull the cable off the reel which was set up at one end of the corridor.  After we had cut them to length, we needed to drag the cables further down the corridor to feed them into the conduit.   An electric winch would actually draw the cables into the pipe, but human muscle power was needed to drag the tail ends down the corridor to where they could be drawn into the pipe.

            We had four strong, healthy young men, including me, and two older guys,  One old guy ran the winch, one lubricated the cable as it went into the pipe.  But each cable had one young man to drag it down this long, carpeted corridor.   At four pounds per foot, a 200 ft (61 meter) length of cable weighs 800 pounds (300 Kg).  Even if you are not trying to lift it, even if you are just dragging it, it requires a pretty strenuous effort.  We were leaned into the work, leaned over at about 30 degrees to vertical, were stripped to the waist,  and were sweating profusely.   But we had no complaint.  We were just four healthy young guys giving our muscles a good workout.   And besides, we were construction workers.  Hard work is what we do. 

            But the corridor walls were glass from floor to ceiling, and on the other side were a hundred office workers, mostly women, at their desks.   And they seemed appalled-- even shocked at what they saw.  It was as though hard, physical labor was some form of violence, or perhaps a kind of bodily function that polite people did not do in public.  A couple of women became so upset they ran to the bathroom to vomit.   Not only had these people never done hard work--- they had never even seen it--and it upset them. 

10,000 Hits Per Month

     Setting the record straight:   When you Google "Runcible Cats Bazaar,   one of the little paragraphs that pops up is a piece that defines this website as having "300 hits per month".   I don't know where this came from, but in recent months, there has not been a single month that this site has had fewer than 10,000 visits.   Perhaps this piece was written back when The Cat first went on the net, at which time it would have been correct. Which brings up another problem about all information you find on the net:   There is no way to know if it is current.   One should always keep this in mind.
     More interesting than the sheer number of visitors to this site is where they come from.   They come from over 100 different countries, but mostly from the United States and Europe, both Western Europe and Eastern Europe.

Electric Cars--The Real Question

                  If you have spent the last several years wondering when electric cars will finally become viable, then join the club.  I have pondered this for forty years.  But the facts we would need to know to answer that question are the facts that no one is telling us.

                  We all know that sooner or later, the electric car has to happen. Petroleum is a finite resource, and it will eventually be gone.  The shale/fracking technology will buy us a brief reprieve, perhaps a decade or so, but eventually the oil will be gone.  While the day that the last barrel of oil is burned may still be far in the future, every year that we inch further toward that day the world's remaining oil will be scarcer, more expensive, and more likely to be either geologically inaccessible---or politically controlled by those who despise us.

                  Yet we also know that the wind power resources of the high plains alone could provide  a hundred times as much energy as our entire country consumes, and any three counties in New Mexico could hold enough solar panels to run the whole country.  So if replacing of our fleet of gas-buggies with fully electric vehicles is pretty much a no-brainer, why hasn't it happened yet? 

                  The news on this subject is conflicting at best.  In May, Tesla Automotive announced that it had just had its first profitable quarter ever, and that it had fully repaid its government loan.  Tesla stock gained 81% in May alone.   But priced at $62,000 to $106,000-- the Tesla is mostly just a rich man's toy.  It's only influence on the car market so far is to prove that an electric car can deliver high performance.  Tesla claims that their ultimate aim is to produce and sell a moderately priced family sedan.  Yet that goal had also been the stated goal of Fisker Automotive, which declared bankruptcy in May.   GM is offering a plug-in hybrid, the Volt, for about $39,000, less the $7,500 federal tax credit. Ford sells an all-electric Focus for about the same price. And both are selling only an infinitesimal number of cars.  So what's the problem?

                  The problem is this:  There are millions of Americans who can afford to spend $39,000 for a car. And there are millions of Americans who are being badly hurt by rising gas prices.  But it's not the same people.  Anyone who can spend $39 k for a car has probably never had to choose between filling the gas tank and putting food on the table.  And those who are forced to make such a choice have probably never owned a new car in their entire lives--and never will.  The real market for electric cars would be the market for cheap used ones.  But there can be no used ones till somebody buys some  new ones.  The people buying $40 k SUVs may complain about rising gas price, but if they really worried about it,  they would have stopped buying gas-guzzlers.   The purchasers of forty-thousand-dollar SUVs that get 20 mpg could at any time have switched to buying a twenty-thousand-dollar Ford focus that gets 40 mpg. If they have not yet done that, then they are not really worried about gas price.

                  Last year, I bought a Ford Focus. It's a plain, gas-powered Focus. It's an excellent car and I'm quite happy with it. On the highway, with no wind, I get up to 44 mpg.  After all the rebates and other incentives, the price was  $18,000.   That was the most money I had ever paid for a car in my entire life, and it scared the hell out of me. I have a reasonably comfortable retirement, and yet I found myself asking,  "Just what sense does it make for a retired person living on a fixed income to take on $18,000 of debt?"  But I bought it anyway, because I do worry about raising gas price. In my view, the target price that electric car makers will have to hit for electric cars to become viable is this:  Ford will have to sell its Electric Focus for about the same price that it sells its regular focus, which is $18 k-$22 k.  But that isn't going to happen anytime soon.  The CEO of Ford Motors disclosed last year that 1/3 of the cost of the $39 k Electric Focus is the cost of the battery.  So if the battery cost alone is $15,000, then the car cannot be sold for $18,000.  I suspect that the battery cost will have to drop to around $3,000 to $5,000 before the car price can become competitive. 

                  Of course, many will ask, "What about fuel savings?   Couldn't people afford to spend more on a car if they didn't have to buy gas?"  To compute that answer, this is what we will need to know:  How many miles will the car last?  Will the original battery last the life of the car, or will it have to be replaced after a certain number of charge/discharge cycles?  If so, then how many charge/discharge cycles will the battery last before it has to be replaced, and how many miles will have been driven by that time?  And what will be the net exchange price for the replacement battery? And how many kwh of electric power will be purchased over the life of the car, and at what price?  I cannot get any hard answers for any of these questions.

                  Some of you may protest, "Even if there is no net savings for transportation cost, wouldn't we wish to switch to electric anyway, (assuming we can afford to) because it will mean burning less carbon and importing  less fuel? Supposing we were to find that a $15,000 battery only saves $10,000 in fuel over its lifetime. Shouldn't we do it anyway?" 

                    Well, we don't even know that for certain.  To compute how much we would be lowering our carbon footprint, we would have to know this:   When $15,000 is paid for a battery, just what did this money pay for?   And how much of the price involves goods and services that consume petroleum? Supposing  that $10,000 of the cost ends up being petroleum cost?  Then we might  not be lowering the carbon footprint at all, nor lessening our dependence on imported oil.  Do I know this to be the case?  No, I don't even suspect that this is the case--but I do not know for sure that it is not the case, and neither does anyone else. 

                  In order to predict just when the day of the electric car will arrive, these are the things we will have to know.  But these are precisely the things that no one is telling us.