Thinking about some of my past posts - calling out for allowing deflation to occur - it occurred to me that I might have missed one aspect - loan contracts. So I did some more thinking and here's what I came up with...
Nearly ever economist will tell you that deflation is bad. Yet (as much as they want to ignore it) it is a part of a healthy economy. However, our economy structures loans in a bad way - one that always assumes inflation. This is most evident both in the Great Depression between 1929 and 1944 as well as in our present economic climate where the housing market literally forces people to give up their homes because the market value is lower than the mortgage and they either (a) have to sell for some reason in the immediate or near term, or (b) they simply cannot afford to pay the mortgage any longer due to financial troubles.
So the question becomes - how can we allow for deflation while at the same time not undermining our current system?
The solution may be simpler than one thinks - allow for deflation in the loan contracts through some relatively simple clauses:
i. All the contracts have interest rates. Apply the growth in the interest during inflationary periods.
ii. When in a deflationary period, the interest rate drops sufficiently to account for the difference in value due the deflation.
iii. Any lost inflation per #ii is not counted against the borrower by the lender.
Basically - if inflation is 5%, then the loan contract's interest rate applies. However, if deflation kicks in, then the 5% interest rate might either change or go away entirely. (While one might like it to drop below zero, it would probably be hard to get buy in from lenders if it did, unless it was a dramatic deflation. And by dramatic I mean something like 15% or greater deflation, not simply 1-2%.)
Now why does this work? Valuation of the currency. The lender is still receiving more value back than what they paid out. For example, if a lender lent out $100 at a 5% interest rate, that would net them $105 if paid. If deflation kicks in at %5, then the $100 is only worth $105.26 ( 100*100/95) just because of the deflation. If the borrower paid back the $100 without any interest, they would have still made their %5 back due to an increased value in the currency. However, if they continue to charge the 5%, then they would receive $110.53 (105*100/95) - e.g. 11%, thus making the loan unaffordable to the borrower as it ends up charging 6% more than it should have.
Some will say "well tough luck you took a gamble with the loan - that's life". True, you did take a gamble but so did the whole financial institution, based on a flawed assumption - that deflation will never exist. Why not involve deflation in the assumption - that it will exist because it does in real life - and adjust the gamble based on that?
This little change - of prorating the interest rates for deflation during the life of the loan - will allow deflation to occur in a safe and harmless manner for loan providers and borrowers.
Ultimately this benefits both lenders and borrowers. For lenders, it will mean less people having to walk away from a loan when deflation occurs. For borrowers, it means having a better financial stability to continue paying the bills in a deflationary period.
Lenders can start by including language for this in new loan contracts. Borrowers can start by pushing for this kind of language in new loan contracts. For both, it means less time spent in bankruptcy courts during those deflationary periods. And either Lenders could extend this to existing contracts, or the gov't could mandate it for all existing contracts.
Aside: My guess is that this would only really need to apply to large loans (e.g. card, houses, commercial, etc.) that are required for the economy to continue. Small loans (e.g. credit card, etc.) should probably be able to do without this, though likely would get it too just to make things fair overall.
Monday, May 18, 2009
Wednesday, May 13, 2009
Main driver in this recession?
I don't know why, but for some reason people seem to think that the main driver in this recession is housing (http://finance.yahoo.com/news/Stocks-fall-on-weak-retail-apf-15237010.html):
The collapse of the housing market is really only one of the symptoms of the driver of this recession. What is the real main driver of this recession? DEBT.
How do we know that DEBT is the main driver? Because as credit tightens, one of the main factors is the debt-to-income ratio. If your income is not high enough in proportion to your debt (i.e. you have a high debt to low income), then the loan is denied. If, on the other hand, you have a low debt to high income then you are a safe bet for a loan, and they'll do whatever it takes to get you a loan. (There's a few other factors to, but that's a primary one.)
What can we do to stop the main driver? Start paying down the debt.
Seriously.
South Carolina's Governor Sanford has it right - pay down debt.
And Obama's continuing plan to try to spend our way out of this is only going to make it worse - far worse - as we'll have to take on yet more debt (as a nation) to pay back the interest on the existing debt. Instead of trying to push money out every where else, Obama, the Fed, the Treasury, and Congress should be looking at what they can do to pay down the Federal debt. Until they do, we're in for an eventual collapse - we might (and I stress might) get away this time, but you can't run from it forever, as many are now finding out in their personal and work lives.
Meanwhile, the main driver of the recession -- the collapsing housing market -- has yet to turn around. RealtyTrac data said April's foreclosures were up 32 percent from a year ago, and up slightly from March. It was the second straight month that more than 340,000 U.S. households received a foreclosure filing.
The collapse of the housing market is really only one of the symptoms of the driver of this recession. What is the real main driver of this recession? DEBT.
How do we know that DEBT is the main driver? Because as credit tightens, one of the main factors is the debt-to-income ratio. If your income is not high enough in proportion to your debt (i.e. you have a high debt to low income), then the loan is denied. If, on the other hand, you have a low debt to high income then you are a safe bet for a loan, and they'll do whatever it takes to get you a loan. (There's a few other factors to, but that's a primary one.)
What can we do to stop the main driver? Start paying down the debt.
Seriously.
South Carolina's Governor Sanford has it right - pay down debt.
And Obama's continuing plan to try to spend our way out of this is only going to make it worse - far worse - as we'll have to take on yet more debt (as a nation) to pay back the interest on the existing debt. Instead of trying to push money out every where else, Obama, the Fed, the Treasury, and Congress should be looking at what they can do to pay down the Federal debt. Until they do, we're in for an eventual collapse - we might (and I stress might) get away this time, but you can't run from it forever, as many are now finding out in their personal and work lives.
Monday, February 09, 2009
Obama needs to get off the air...
What's really funny right now, is that Obama is tripping over his words as he speaks to the American public. It's really embarrassing too. In answering questions, he's basically going back to only a couple points (e.g. can't just do tax cuts), and tripping over most everything else. What's more - it's very funny to watch him as he back-pedals over his stances on Iraq and Afganistan as he has to match up with reality.
That said, it's also very evident from the conference that he has no clue what caused the financial problem. He seems to be putting the blame squarely on the banks, though he did at least recognize the overspending of the American public - probably only because it was an answer directly related to the overspending of the American public.
True, the banks played a large role in the financial problem. But they also didn't cause people to overspend. They didn't cause people to put money no credit cards for stuff when they didn't have money to pay for it. They didn't cause people to need pay-day-loans to make rent. They also didn't cause businesses to go to pure JIT (just-in-time) manfacturing and move away from inventories to getting it as close to when the buyer buys and minimizing any overhead.
So what does this mean?
Well, since businesses are using a lot of JIT that their cuts due to loss of demand are more immediately felt across the various sectors. It also means that their increases will be more immediately felt across those same sectors when the time comes. It's really a double edged sword.
However, the bigger issue is that we are use to spending more than a dollar for every dollar we bring in. Businesses got use to it, and now that is no longer happening. Businesses and the world need to adjust. And we're not going to spend our way out of it.
In order to get out of this, then we have to create new, steady, long-term sources of jobs. New companies that will turn into long term companies. We need to get Wall Street to stop looking at only the 1 year, 2 year, or 5 year plans; and look at the 20, 30, 40, 50 year plans.
Tightening up capital will help. It will also help to loosen that capital where it needs to go - start-ups and SMB's. In other words, the only company's that should qualify for the major capital going out should be the ones that have less than 500 or 1000 employees, and (preferably) within their first 10 years of business. All others should be on a secondary or tertiary list to get what's left over. Why? Those are the majority of the companies that will create new jobs and spend money like no one else. They mostly have nothing to lose, and they are always the ones to drive us through booms. But we also need to do it in a way so as to prevent a bust when the money closes down.
That said, it's also very evident from the conference that he has no clue what caused the financial problem. He seems to be putting the blame squarely on the banks, though he did at least recognize the overspending of the American public - probably only because it was an answer directly related to the overspending of the American public.
True, the banks played a large role in the financial problem. But they also didn't cause people to overspend. They didn't cause people to put money no credit cards for stuff when they didn't have money to pay for it. They didn't cause people to need pay-day-loans to make rent. They also didn't cause businesses to go to pure JIT (just-in-time) manfacturing and move away from inventories to getting it as close to when the buyer buys and minimizing any overhead.
So what does this mean?
Well, since businesses are using a lot of JIT that their cuts due to loss of demand are more immediately felt across the various sectors. It also means that their increases will be more immediately felt across those same sectors when the time comes. It's really a double edged sword.
However, the bigger issue is that we are use to spending more than a dollar for every dollar we bring in. Businesses got use to it, and now that is no longer happening. Businesses and the world need to adjust. And we're not going to spend our way out of it.
In order to get out of this, then we have to create new, steady, long-term sources of jobs. New companies that will turn into long term companies. We need to get Wall Street to stop looking at only the 1 year, 2 year, or 5 year plans; and look at the 20, 30, 40, 50 year plans.
Tightening up capital will help. It will also help to loosen that capital where it needs to go - start-ups and SMB's. In other words, the only company's that should qualify for the major capital going out should be the ones that have less than 500 or 1000 employees, and (preferably) within their first 10 years of business. All others should be on a secondary or tertiary list to get what's left over. Why? Those are the majority of the companies that will create new jobs and spend money like no one else. They mostly have nothing to lose, and they are always the ones to drive us through booms. But we also need to do it in a way so as to prevent a bust when the money closes down.
Wednesday, October 22, 2008
Palin - Is she qualified?
It's amazing how many people are claiming that Palin is not qualified to be President - never mind that she's the only one of the four (considering VP and President candidates equally) that has any executive office experience.
McCain has always been in Congress. So has Biden, and Obama's new on the scene. The job of any Congressmen (or Congresswoman) in either the Senate or the House of Representatives is two fold:
1) Legislative: Make Laws, Vote on Laws.
2) Do #1 with respect to the interest of the People of the state and district you represent.
Notice that there is not a single Executive responsibility in there. It is the responsibility of the Legislative branch - i.e. Congress - to make the laws. That's it. It falls to the Judiciary branch to ensure those laws pass the muster (or so to speak), and the Executive branch to enforce them. Each are pretty mutually exclusive - by design so that one group cannot dictate what happens and the people get represented. That's how its designed from the Constitution on out - though you'll never hear it from a Senator or Representative mind you. (They like to think they are more important than that.)
Now they the Legislature does get charge of the budget, which is one way they get to do their "checks & balances" thing. But ultimately, they have no control over the troops or any executive official. Not a single senator has as a Senator made an executive decision; nor can they. Same for Representatives.
However, that is not true when it comes to a State Governor. When a Territory decides they want to join the United States, they must first pass a State Constitution that is based on the Federal Constitution. As such, each state also has a House of Representatives and Senate in its Legislative Branch, a Judiciary branch, and an Executive Branch modeled after those of the Federal level. Guess who is in charge of the Executive Branch? The Governor. No one else.
Does the Governor control troops? To borrow a phrase from Sarah Palin - "You betcha". What troops? The State Militia, National Guard, and other troops that belong to the state's executive branch. Sure, the U.S. President can call on these troops for other needs - i.e. the President can take over the National Guard under certain circumstances such as a national emergency - but at the very least, they report to the Governor.
The Governor also has the ability to pardon crimes, signs the state laws, and oversees the groups that enforce those laws. Same as the President.
Would Sarah Palin be the first Governor to be the Vice President - or if something happened to McCain President? Most certainly not. Both former Presidents Reagan, and Clinton, and the current President were all formerly State Governors; as well as a fair number of former Presidents before them.
So is Sarah Palin qualified to be President? In one word - "Yes".
Is she more qualified than Obama? Most certainly.
Does McCain have to listen to her? Not in the least.
Am I voting for McCain or Obama? I'm not sure yet as I don't really like either one.
Oh, and the polls? Most pollsters know how to ask - or write questions that will be asked - to give an answer in a certain way. So don't ever take poll's at face value; each poll - Republican or Democrat - are aimed to get certain numbers. And they will show what the pollster wants it to show. In the case of Palin, they are probably trying to get the numbers to be against her, against McCain. After all, if they get enough polls to say she's a problem for him - then no matter how much she may actually help him, he won't be able to deny polls that they push through which will hurt, even if they are misleading. It's kind of like a snow ball effect - get enough mass and speed and it'll roll over anything in its path. That's the media for you, especially the pollsters.
What's this come down to? Look at her job. Look at her resume, and be your own judge. Don't necessarily believe what the media is telling you. Check the facts yourself. You don't need to take my word for it either - check for yourself.
McCain has always been in Congress. So has Biden, and Obama's new on the scene. The job of any Congressmen (or Congresswoman) in either the Senate or the House of Representatives is two fold:
1) Legislative: Make Laws, Vote on Laws.
2) Do #1 with respect to the interest of the People of the state and district you represent.
Notice that there is not a single Executive responsibility in there. It is the responsibility of the Legislative branch - i.e. Congress - to make the laws. That's it. It falls to the Judiciary branch to ensure those laws pass the muster (or so to speak), and the Executive branch to enforce them. Each are pretty mutually exclusive - by design so that one group cannot dictate what happens and the people get represented. That's how its designed from the Constitution on out - though you'll never hear it from a Senator or Representative mind you. (They like to think they are more important than that.)
Now they the Legislature does get charge of the budget, which is one way they get to do their "checks & balances" thing. But ultimately, they have no control over the troops or any executive official. Not a single senator has as a Senator made an executive decision; nor can they. Same for Representatives.
However, that is not true when it comes to a State Governor. When a Territory decides they want to join the United States, they must first pass a State Constitution that is based on the Federal Constitution. As such, each state also has a House of Representatives and Senate in its Legislative Branch, a Judiciary branch, and an Executive Branch modeled after those of the Federal level. Guess who is in charge of the Executive Branch? The Governor. No one else.
Does the Governor control troops? To borrow a phrase from Sarah Palin - "You betcha". What troops? The State Militia, National Guard, and other troops that belong to the state's executive branch. Sure, the U.S. President can call on these troops for other needs - i.e. the President can take over the National Guard under certain circumstances such as a national emergency - but at the very least, they report to the Governor.
The Governor also has the ability to pardon crimes, signs the state laws, and oversees the groups that enforce those laws. Same as the President.
Would Sarah Palin be the first Governor to be the Vice President - or if something happened to McCain President? Most certainly not. Both former Presidents Reagan, and Clinton, and the current President were all formerly State Governors; as well as a fair number of former Presidents before them.
So is Sarah Palin qualified to be President? In one word - "Yes".
Is she more qualified than Obama? Most certainly.
Does McCain have to listen to her? Not in the least.
Am I voting for McCain or Obama? I'm not sure yet as I don't really like either one.
Oh, and the polls? Most pollsters know how to ask - or write questions that will be asked - to give an answer in a certain way. So don't ever take poll's at face value; each poll - Republican or Democrat - are aimed to get certain numbers. And they will show what the pollster wants it to show. In the case of Palin, they are probably trying to get the numbers to be against her, against McCain. After all, if they get enough polls to say she's a problem for him - then no matter how much she may actually help him, he won't be able to deny polls that they push through which will hurt, even if they are misleading. It's kind of like a snow ball effect - get enough mass and speed and it'll roll over anything in its path. That's the media for you, especially the pollsters.
What's this come down to? Look at her job. Look at her resume, and be your own judge. Don't necessarily believe what the media is telling you. Check the facts yourself. You don't need to take my word for it either - check for yourself.
Wednesday, October 15, 2008
D600 and Linux...
So a while back I purchased my old work laptop - a Dell D600. I initially put Win2k on it b/c that is what I had and my wife wanted Windows and it was easy. Recently we got her a new laptop - a nice HP Core Duo system running Vista Ultimate. She's happy; and I've had a little bit of free time.
So I put Linux - specifically Gentoo 2008.0 - on the D600. It took a little work, but nothing I wasn't up to. The install was really smooth - and would have been smoother if I had followed the directions the first time around. (Fortunately Linux is designed well, so while I rebuilt it, I didn't have to go back to the CD and no wireless. So I was able to do more over the wireless!)
So now I'm running a very recent Linux Kernel - 2.6.25. The ATI Video card (ATI Mobility FireGL 9000 Rev 1/Radeon R250) is natively supported with the radeon driver. The wireless (Broadcom 4306, Rev 2) and wired (Broadcom NetXtreme BCM5702X rev 2) NICs are natively supported too. In fact, pretty much everything is natively supported - sound, etc.
The downside, though, is that the ATI drivers don't support the video card any more. However, the open source driver does just fine.
So why am I writing this? Well, mostly to note that the support is now native - at least with Gentoo. In setting up the system, I have noticed that a lot of information on the Net mentions adding patches and other stuff. And really, the only big thing I had to do with Gentoo was the following - and this is only stuff specific to the D600:
1. Make sure to set the 'Dell Laptop' stuff when compiling the Linux Kernel. It's pretty evident in the various menus used to configure the kernel (e.g. make menuconfig).
2. I had to install the Wireless Firmware - which required some special work due to licensing restrictions, which basically consisted of downloading the firmware from a website, extracting it to /lib/firmware, and running a small program (also from the website, though I think Gentoo might have it in Portage too) to align it with the kernel. After that, it was like running any other NIC - though it came up as wlanX instead of ethX - but that's okay.
3. Configuring X was a pain. Mostly because the ATI drivers don't work, and it's hard to know the monitor and video card information on your own. I'll have to post more on this another day - but suffice it to say that it's not too hard to get a well working system.
4. Sound was pretty easy. I've got a pure ALSA set-up; and once Alsa mixer was installed and I enabled the various volumes - especially the 'Headphones' and 'External Amplifier' I got sound without a problem. The "External Amplifier" drives the Internal Speakers. Kind of doesn't make sense - but works very well.
5. I installed a few extra things laptop related - namely 'gkrellm'. Sadly, I can't quite remember all of them. The other thing was enabling the 'dell' USE flag for 'sys-apps/hal'.
6. I use KDE, and there is some information out there regarding using the 'latitude' keyboard. As I said, I paid a little attention during the various build phases and made sure 'dell' and 'latitude' stuff was enabled. And once I set KDE to use the "Dell Latitude series laptop" keyboard layout (Control Center->Regional & Accessibility->Keyboard Layout->Keyboard model), it just worked! Volume Up/Down/Mute just worked!
Needless to say, the year of the Linux Desktop is certainly upon us when it has finally become extremely easy to configure a system and get near full usage out of it, and not necessarily with manufacturer support at that - by that I mean, a number of the parts companies haven't released full specs or helped much with drivers; yet, I still get nearly as much out of it as I do under Windows - likely more since Linux is more resource friendly than Windows is.
(WinXP SP-2 wasn't bad on the system when I had it a while back; but as far as Windows went, Win2k SP4 was the prime for it. Now, I'm sitting quite pretty with a nice KDE 3.5.9 desktop, doing things that Win2k - likely even WinXP - could barely dream of. In fact, soon I'll be sitting pretty doing things that even Vista has a hard time dreaming of once KDE 4.1 or so is more easily able to install under Gentoo - right now, Portage 2.1 is keeping it from getting installed since it needs Portage 2.2, which isn't quite ready yet. Hopefully soon.)
Well any how...the last few weeks have been a dream for me. Oh - and my Win2k installation? I'll likely only be booting it using Bochs or some other emulator that can use the hard drive partition! Or may be I'll finish cleaning it up (getting the photos off of it) and then convert it to more disk space for Linux...I certainly don't need Windows here any more!
Hope someone finds this useful. Enjoy!
So I put Linux - specifically Gentoo 2008.0 - on the D600. It took a little work, but nothing I wasn't up to. The install was really smooth - and would have been smoother if I had followed the directions the first time around. (Fortunately Linux is designed well, so while I rebuilt it, I didn't have to go back to the CD and no wireless. So I was able to do more over the wireless!)
So now I'm running a very recent Linux Kernel - 2.6.25. The ATI Video card (ATI Mobility FireGL 9000 Rev 1/Radeon R250) is natively supported with the radeon driver. The wireless (Broadcom 4306, Rev 2) and wired (Broadcom NetXtreme BCM5702X rev 2) NICs are natively supported too. In fact, pretty much everything is natively supported - sound, etc.
The downside, though, is that the ATI drivers don't support the video card any more. However, the open source driver does just fine.
So why am I writing this? Well, mostly to note that the support is now native - at least with Gentoo. In setting up the system, I have noticed that a lot of information on the Net mentions adding patches and other stuff. And really, the only big thing I had to do with Gentoo was the following - and this is only stuff specific to the D600:
1. Make sure to set the 'Dell Laptop' stuff when compiling the Linux Kernel. It's pretty evident in the various menus used to configure the kernel (e.g. make menuconfig).
2. I had to install the Wireless Firmware - which required some special work due to licensing restrictions, which basically consisted of downloading the firmware from a website, extracting it to /lib/firmware, and running a small program (also from the website, though I think Gentoo might have it in Portage too) to align it with the kernel. After that, it was like running any other NIC - though it came up as wlanX instead of ethX - but that's okay.
3. Configuring X was a pain. Mostly because the ATI drivers don't work, and it's hard to know the monitor and video card information on your own. I'll have to post more on this another day - but suffice it to say that it's not too hard to get a well working system.
4. Sound was pretty easy. I've got a pure ALSA set-up; and once Alsa mixer was installed and I enabled the various volumes - especially the 'Headphones' and 'External Amplifier' I got sound without a problem. The "External Amplifier" drives the Internal Speakers. Kind of doesn't make sense - but works very well.
5. I installed a few extra things laptop related - namely 'gkrellm'. Sadly, I can't quite remember all of them. The other thing was enabling the 'dell' USE flag for 'sys-apps/hal'.
6. I use KDE, and there is some information out there regarding using the 'latitude' keyboard. As I said, I paid a little attention during the various build phases and made sure 'dell' and 'latitude' stuff was enabled. And once I set KDE to use the "Dell Latitude series laptop" keyboard layout (Control Center->Regional & Accessibility->Keyboard Layout->Keyboard model), it just worked! Volume Up/Down/Mute just worked!
Needless to say, the year of the Linux Desktop is certainly upon us when it has finally become extremely easy to configure a system and get near full usage out of it, and not necessarily with manufacturer support at that - by that I mean, a number of the parts companies haven't released full specs or helped much with drivers; yet, I still get nearly as much out of it as I do under Windows - likely more since Linux is more resource friendly than Windows is.
(WinXP SP-2 wasn't bad on the system when I had it a while back; but as far as Windows went, Win2k SP4 was the prime for it. Now, I'm sitting quite pretty with a nice KDE 3.5.9 desktop, doing things that Win2k - likely even WinXP - could barely dream of. In fact, soon I'll be sitting pretty doing things that even Vista has a hard time dreaming of once KDE 4.1 or so is more easily able to install under Gentoo - right now, Portage 2.1 is keeping it from getting installed since it needs Portage 2.2, which isn't quite ready yet. Hopefully soon.)
Well any how...the last few weeks have been a dream for me. Oh - and my Win2k installation? I'll likely only be booting it using Bochs or some other emulator that can use the hard drive partition! Or may be I'll finish cleaning it up (getting the photos off of it) and then convert it to more disk space for Linux...I certainly don't need Windows here any more!
Hope someone finds this useful. Enjoy!
Tuesday, October 07, 2008
US Energy Independence...
What does it really mean for the U.S. to be "Energy Independent"?
Honestly? You hear it all the time right now with the presidential politics, in the debates, and everything else. But what does it really mean?
To start with - it means that the U.S. would be self-sufficient on its energy needs - as any country should be. That's all there is. Nothing more, nothing less.
So, how do we get there?
Well, that's the hard part. Primarily entirely due to nothing more than politics. Why? Because its politics that keeps us from it; and big spending lobbyists as well.
It's the lobbyists paying the politicians for their interests. For example, the U.S. Congress tried to raise the required gas mileage for the average vehicle to 35 miles per gallon; however, the bill never made it through, namely due to political interests - the big auto makers didn't want to do it as it would be "too costly" for them, so they poured lots of money against it. But it is that exact kind of politics that are keeping the U.S. from achieving energy independence. Why?
Because it keeps driving the need for certain kinds of energy sources higher. For example, the current standard is 25mpg - which typically yields about 400 miles per tank of gas. My Mazda 3s gets between 26 and 32 mpg on its 14g tank - thats between 364 miles and 448 mpg if I were to run it empty. Raising it to 35 mpg on the same vehicle would either raise minimum miles per tank to 490, or lower the size of the tank to about 11 gallons.
Now to put it into a little bit of perspective. Suppose you have to go 1000 miles. At 25 mpg, that's 40 gallons of gas. At 35 mpg, thats 28.57 gallons - or 70% of the fuel consumption. In today's dollar - at nearly $3.75 per gallon - it comes to a savings of $42.85. That also frees up 11.43 gallons for distribution elsewhere.
So what, then, would happen if we increase fuel efficiency to 150 miles per gallon? Or 200 miles per gallon? Or more? We do have the technology; but the auto-makers choose to give us all kinds of things we don't need - like TV's - instead of giving us savings that would really help us.
So how else do we get there?
The other big side of why politics gets in the way of energy independence is that there is a lot of political upheaval over building new fuel refinery plants, or even nuclear facilities.
Why are these important? New refinery plants means the ability to spread the fuel we have further at lower cost. Nuclear energy has the highest return available in terms of fuel to power ratios. Nothing comes close. The only argument against Nuclear is the relatively small amount of waste afterwards. And in terms of safety history, nuclear is by far the safest; with less injuries than anything else. And every instance of a nuclear plant failing - all two or three of them - containment has occurred. (Yes, even Chernoble was no where near what it could have been; and research already shows that after only about 20 years it is already coming back to levels that are safe enough to live in!)
** It doesn't mean we have a nuclear plant in everyone's back yard though! **
Don't get me wrong - we need a very diverse energy plan that includes solar, wind, hydro, and many other forms of energy harvesting. But bang-for-buck, nuclear is the cheapest and cleanest we can get.
Again, to put it in perspective - we can reply "dirty" fuel sources such as coal that have limited resources, which are costly to recover and transport, with other sources of power such as nuclear that can do far better. And when the next safer/cleaner thing comes along we can upgrade the power plants to that too.
BUT that does nothing for the hundreds of thousands of vehicles that traverse the roadways and railways all over the world, over 90% of which use some form of petrol - which is even more limited in quantity than coal.
There really is only one solution for the vehicular side - converting everything to pure electric. The reality, though, is that the conversion is not an overnight process. Most are ranting now about the battery situation - however, Porsche had a 100% electric vehicle around 1915, and companies such as Tesla Motors are figuring out ways around the battery situation. (BTW, Tesla has a really neat method of charging/discharging batteries by treating them like a big network of small batteries.) But should we toss the baby with the bath water, or so to speak?
Absolutely not. What it means is that we need a hybrid vehicle to get there. Toyota brought us the Prius, and several other companies have brought similar vehicles. But they all do it wrong by building two system in-line, instead of building one system that supports the other and for that there is only one real solution - a full electric system that can be supplemented by an alternative energy source.
Now why did I say "alternative energy source" instead of saying a "gasoline engine"? So as not to limit the possibilities. That alternative source will likely be a small gasoline engine - and if we do it right we could recharge the batteries while the vehicle is moving and then shut it off again - but it must also include a way to draw energy from the greater power grid - i.e. a plug-in hybrid.
Sadly, we'll have to wait until at least 2010 for such a vehicle to be done right . The EPA killed it before; hopefully they won't do it again. (Why? Because it meant they couldn't get the test results to be consistent since it could be plugged in, thus the vehicle might have gotten 50mpg one time, and never used a gallon another time.)
Why is this important? Because until it is provided, we cannot centralize our energy generation systems. Until we can plug-in the vehicles there will be no such thing as energy independence. Why? Because we'll still need oil and petrol from other nations in ever growing quantities than the U.S. could ever itself produce.
Of course, once they start selling it'll take about 20 years to replace the vehicles on the road. Why? It'll take about 10 to 15 years to trickle down once it reaches a generally accepted price range, and it'll probably take about 5 years to reach that once it hits market.
But there is hope for making it happen sooner, but only if someone can come up with an economical way to convert existing vehicles to either a pure electric system or a hybrid. Needless to say it can be done - there are a lot of enthusiasts our there doing it right now - but it usually is a very custom job, namely since no one is doing it on large scale. What is needed is someone to pick it up, create a replacement engine that will suite most vehicles and give decent performance (not everyone needs a sports car), and the glue-parts (namely the connections to the transmission) for most vehicles and deliver it at a cost that is not much more than replacing a standard engine.
Why the cost limit? To make it affordable, and that would probably come at about the same point the car companies are able to do it for their current selections - about 5 years out - since it would use much of the same kinds of technology.
But it can't just stop at vehicles. Systems that can be maintained by solar energy such as traffic lights or school zone lights should be. Systems that can be shut off when not needed should be.
And don't forget about "Daylight Savings Time" - it should just be eradicated. It doesn't save us anything (as the recent study of the state of Indiana showed when they converted to it in 2007), and does not make an impact on energy usage - the U.S. is a 24/7 economy. Manufacturing (which is what DST was all about) happens regardless of the clock. If it's not heated, it's cooled (which is more likely nowadays anyway) and that happens regardless of the time of year. People tend to just leave their air conditioner or heaters on; which in the end just uses more fuel though it may save a few dollars a month today.
Then of course there is the big farce that is ethanol. The only reason you hear anything about ethanol is again politics - the farming lobbyists which spend more money on the U.S. Congress than anyone in the world. So despite the fact that 1 gallon of pure gasoline produces more energy than 1 gallon of gasoline mixed with ethanol, which produces more energy than 1 gallon of pure ethanol, we're still force feeding ethanol production through the system - even legally requiring it - despite the fact that it is a leech on the entire fuel system that only drives demand for fuel higher because the vehicle that was getting 400 miles per tank is now getting 200 or 300 mile per tank just because of ethanol. (Of course there are also the other side-effects such as how much more corrosive ethanol is; the fact that it burns hotter and makes engines deteriorate faster, and more.)
Ultimately, there's a lot there. And it will take a long time to do. But it'll only take longer unless we get started on the road to it today. Some are starting. Energy independence - energy self-sufficiency - will be a long and hard road; but it will be more than worth it to get there.
Now if we can only get the politicians in line with the interests of the people instead of the lobbyists...
P.S. Sorry if I seemingly got a little off-topic. Everything there is really on-topic. Hopefully I made it all relate in a way that made sense. Comments, discussion welcome as always.
Honestly? You hear it all the time right now with the presidential politics, in the debates, and everything else. But what does it really mean?
To start with - it means that the U.S. would be self-sufficient on its energy needs - as any country should be. That's all there is. Nothing more, nothing less.
So, how do we get there?
Well, that's the hard part. Primarily entirely due to nothing more than politics. Why? Because its politics that keeps us from it; and big spending lobbyists as well.
It's the lobbyists paying the politicians for their interests. For example, the U.S. Congress tried to raise the required gas mileage for the average vehicle to 35 miles per gallon; however, the bill never made it through, namely due to political interests - the big auto makers didn't want to do it as it would be "too costly" for them, so they poured lots of money against it. But it is that exact kind of politics that are keeping the U.S. from achieving energy independence. Why?
Because it keeps driving the need for certain kinds of energy sources higher. For example, the current standard is 25mpg - which typically yields about 400 miles per tank of gas. My Mazda 3s gets between 26 and 32 mpg on its 14g tank - thats between 364 miles and 448 mpg if I were to run it empty. Raising it to 35 mpg on the same vehicle would either raise minimum miles per tank to 490, or lower the size of the tank to about 11 gallons.
Now to put it into a little bit of perspective. Suppose you have to go 1000 miles. At 25 mpg, that's 40 gallons of gas. At 35 mpg, thats 28.57 gallons - or 70% of the fuel consumption. In today's dollar - at nearly $3.75 per gallon - it comes to a savings of $42.85. That also frees up 11.43 gallons for distribution elsewhere.
So what, then, would happen if we increase fuel efficiency to 150 miles per gallon? Or 200 miles per gallon? Or more? We do have the technology; but the auto-makers choose to give us all kinds of things we don't need - like TV's - instead of giving us savings that would really help us.
So how else do we get there?
The other big side of why politics gets in the way of energy independence is that there is a lot of political upheaval over building new fuel refinery plants, or even nuclear facilities.
Why are these important? New refinery plants means the ability to spread the fuel we have further at lower cost. Nuclear energy has the highest return available in terms of fuel to power ratios. Nothing comes close. The only argument against Nuclear is the relatively small amount of waste afterwards. And in terms of safety history, nuclear is by far the safest; with less injuries than anything else. And every instance of a nuclear plant failing - all two or three of them - containment has occurred. (Yes, even Chernoble was no where near what it could have been; and research already shows that after only about 20 years it is already coming back to levels that are safe enough to live in!)
** It doesn't mean we have a nuclear plant in everyone's back yard though! **
Don't get me wrong - we need a very diverse energy plan that includes solar, wind, hydro, and many other forms of energy harvesting. But bang-for-buck, nuclear is the cheapest and cleanest we can get.
Again, to put it in perspective - we can reply "dirty" fuel sources such as coal that have limited resources, which are costly to recover and transport, with other sources of power such as nuclear that can do far better. And when the next safer/cleaner thing comes along we can upgrade the power plants to that too.
BUT that does nothing for the hundreds of thousands of vehicles that traverse the roadways and railways all over the world, over 90% of which use some form of petrol - which is even more limited in quantity than coal.
There really is only one solution for the vehicular side - converting everything to pure electric. The reality, though, is that the conversion is not an overnight process. Most are ranting now about the battery situation - however, Porsche had a 100% electric vehicle around 1915, and companies such as Tesla Motors are figuring out ways around the battery situation. (BTW, Tesla has a really neat method of charging/discharging batteries by treating them like a big network of small batteries.) But should we toss the baby with the bath water, or so to speak?
Absolutely not. What it means is that we need a hybrid vehicle to get there. Toyota brought us the Prius, and several other companies have brought similar vehicles. But they all do it wrong by building two system in-line, instead of building one system that supports the other and for that there is only one real solution - a full electric system that can be supplemented by an alternative energy source.
Now why did I say "alternative energy source" instead of saying a "gasoline engine"? So as not to limit the possibilities. That alternative source will likely be a small gasoline engine - and if we do it right we could recharge the batteries while the vehicle is moving and then shut it off again - but it must also include a way to draw energy from the greater power grid - i.e. a plug-in hybrid.
Sadly, we'll have to wait until at least 2010 for such a vehicle to be done right . The EPA killed it before; hopefully they won't do it again. (Why? Because it meant they couldn't get the test results to be consistent since it could be plugged in, thus the vehicle might have gotten 50mpg one time, and never used a gallon another time.)
Why is this important? Because until it is provided, we cannot centralize our energy generation systems. Until we can plug-in the vehicles there will be no such thing as energy independence. Why? Because we'll still need oil and petrol from other nations in ever growing quantities than the U.S. could ever itself produce.
Of course, once they start selling it'll take about 20 years to replace the vehicles on the road. Why? It'll take about 10 to 15 years to trickle down once it reaches a generally accepted price range, and it'll probably take about 5 years to reach that once it hits market.
But there is hope for making it happen sooner, but only if someone can come up with an economical way to convert existing vehicles to either a pure electric system or a hybrid. Needless to say it can be done - there are a lot of enthusiasts our there doing it right now - but it usually is a very custom job, namely since no one is doing it on large scale. What is needed is someone to pick it up, create a replacement engine that will suite most vehicles and give decent performance (not everyone needs a sports car), and the glue-parts (namely the connections to the transmission) for most vehicles and deliver it at a cost that is not much more than replacing a standard engine.
Why the cost limit? To make it affordable, and that would probably come at about the same point the car companies are able to do it for their current selections - about 5 years out - since it would use much of the same kinds of technology.
But it can't just stop at vehicles. Systems that can be maintained by solar energy such as traffic lights or school zone lights should be. Systems that can be shut off when not needed should be.
And don't forget about "Daylight Savings Time" - it should just be eradicated. It doesn't save us anything (as the recent study of the state of Indiana showed when they converted to it in 2007), and does not make an impact on energy usage - the U.S. is a 24/7 economy. Manufacturing (which is what DST was all about) happens regardless of the clock. If it's not heated, it's cooled (which is more likely nowadays anyway) and that happens regardless of the time of year. People tend to just leave their air conditioner or heaters on; which in the end just uses more fuel though it may save a few dollars a month today.
Then of course there is the big farce that is ethanol. The only reason you hear anything about ethanol is again politics - the farming lobbyists which spend more money on the U.S. Congress than anyone in the world. So despite the fact that 1 gallon of pure gasoline produces more energy than 1 gallon of gasoline mixed with ethanol, which produces more energy than 1 gallon of pure ethanol, we're still force feeding ethanol production through the system - even legally requiring it - despite the fact that it is a leech on the entire fuel system that only drives demand for fuel higher because the vehicle that was getting 400 miles per tank is now getting 200 or 300 mile per tank just because of ethanol. (Of course there are also the other side-effects such as how much more corrosive ethanol is; the fact that it burns hotter and makes engines deteriorate faster, and more.)
Ultimately, there's a lot there. And it will take a long time to do. But it'll only take longer unless we get started on the road to it today. Some are starting. Energy independence - energy self-sufficiency - will be a long and hard road; but it will be more than worth it to get there.
Now if we can only get the politicians in line with the interests of the people instead of the lobbyists...
P.S. Sorry if I seemingly got a little off-topic. Everything there is really on-topic. Hopefully I made it all relate in a way that made sense. Comments, discussion welcome as always.
Tuesday, August 12, 2008
Update...
Well...it's been quite a while and much has gone on. This, however, is just a quick update on me and why the blog has been so empty as of the last few months. It's really rather simple - I've changed jobs and moved, and in the midst of it all I haven't really had any time to write more blog entries. Hopefully that will change soon. In the mean time, enjoy!
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