Old Wizard

When Will the Auto Industry Reach a "Better Place"?

Fitz, It might also be true that Iran is switching to natural gas driven vehicles because they import all their gasoline, since they have no refineries and are, therefore ,subject to getting chocked off by their adversaries. That said, if we all would elevate the driving of the current account to zero as the number one economic and strategic priority, we would not get ourselves deflected from the right energy plan. Issues like global warming, the right cafe standards, and bandaid bailout moves that don't solve the long term problem we face as a nation ,create more heat than light in the solution process. I'm a believer in the two bullet theory which is: if the first bullet is aimed at your head and you don't duck, it doesn't matter where the second bullet goes. If we don't address the strategic issues of energy dependence on hostile suppliers and the momentus negative operational negative cash flow out of the country, it won't matter what global warming does to us in 50 or 100 years from now or whether GM is still viable or whether we can make profitable other than gas cars per se. Fortunately, by products of solving our no 1 problem, properly, would lead to solutions for the others if we act correctly now. Catering to one or the other pressure group will lead to solving one problem at the risk of making the right solution more difficult and therefore making the country's future more problematic at best and bordering at non existant as we kown it today at worst..

When Will the Auto Industry Reach a "Better Place"?

Fitz, It won't take long for it to be obvious that the new administration can't look beyond the nine dots either. No economic set of bandaids will fix the economic problems we have unless the fix addresses the almost trillion dollar negative current account balance. Building roads and fixing bridges, giving 1000dollars to every family and bailing out sick industries that refuse to take the medicine to get well doesn't address the real drivers. Spending the 1000 dollars on products made in China that one buys in target and walmart only excaserbates the negative balance. Building more roads does nothing to change structural and ingrained driving habits in our metroplexes. Building electrically -powered mono-rail spiders in those metro-plexes will make the needed kind of structural changes and reduce gas consumption. Converting connection buses to natural gas as a amandate associated with connection to the spiders will ease the problem of natural gas filling stations. Small electric cars can then be another economically feasible personal connecting conveyance. Obama has a unique opportunity to create this and other pilot prjects for wind and solar like a wind farm for Chicago that will provide 20% of its required electrical energy in 5 years and a similar solar project for Phoenix or SanDiego. The mono-rail spider might be created for washdc or Los Angeles. Implementing these projects as gov. sponsered would eliminate the cost-effective arguments and teach us how and where improvements and efficiencies could be realized. Instead he seems to be going the route of same old, same old. Appoint a commission to study our economic problems, create another stimulus to put a 1000 bucks in families hands and pander to the constituencies who want to continue the status quo. Doing the above would put people to work, make a dent in our energy problem,reduce the negative balance of our current account and spawn a new set of products that we could sell abroad. My advice to the new president and the so called leaders of Congress is When you're in a hole don't dig.

Fall in Gas Prices and Less Driving Equals $315B Savings

I meant 30m each way, 60 miles round trip.

Fall in Gas Prices and Less Driving Equals $315B Savings

The second savings is somewhat fictitious since much of that reduction is due to the increased ridership on mass transportation. While mass transportaion leads to less miles driven it does not necssarily cost less. Ridership in northern Va. on the commuter rail is up more than1m this year but to ride 30 miles round trip costs 13.40. At 20 mi/gallon and 4.29 per gallon at the peak cost ,the out of pocket cost isn't less. GM kid, big oil might have been resposible for some of the rise in cost, but just to be sure, I would initiate a rule that commodity buyers put up 80 cfents on the dollar to buy a commodity. Hedge funds and the big pension funds like CALPERS would need more skin in the game to make the big profits they made on the rise of oil prices. The fact they made such profits was brought out by the congressional hearings when congressional leaders ascribed the run up in oil prices to speculators whom I'm sure they believed were greedy republicans. I agree that speculators were responsible for a good chunckn of the run-up in prices and should not be allowed to buy commodities at 5 cents on the dollar. Notice the investigstion was dropped like a hot patato when the congress was warned by a large member of the majority constituency of the uintended consequences of regulation.

Buffett Increases Stake in COP - Smart Move!

Fitz, You have a little bit of logic that cherry picks history yourself. I'd rather stay on the creative part of the dicussion where I think we can be constructive and where there is a dearth of analysis and logic. I couldn't help myself though when you talked about Obama warning Bush with a speech on the senate floor. Obama wasn't a US senator when we went into Iraq. If you want to blame everything on Bush that is your right, but if you don't distill all the noise to get to the fundamental drivers that are making our economy sick and our Government ineffective and suggest reasoned fixes, it won't help. Bush won't be president much longer but most of the Congress will. My criteria for patriots are people who are willing to sacrifice self-interest to solve the country's pressing problems. An elected official who acts only to get reelected doesn't pass my test. A person who only acts to increase personal fortune at the expense of the country also doesn't pass. I'll say the school is still out on Mr. Buffet.. There is nothing wrong with enlightened self interest but in Mr. Buffet's case the need to accumulate more wealth seems almost superfluous,while the need for him to use his skill and knowledge to solve the negative operating cash flow problem of the country seems greater.

Buffett Increases Stake in COP - Smart Move!

Fitz, Let's agree that the comprehensive energy plan implemented on an urgent basis should be the number 1 priority for this and the next administration. The use of the the remaining Tarp funds or at least 250b should be reallocated to the implementation of the plan. Not only would these funds go to the heart of economic problems, the negative operational cash flow of the US as a whole[current account], but it would result in new job creation, spawn a host of new products and US industries, decrease our dependency on hostile energy suppliers and make the discussion of the price of oil independent of the required progress. A stimulus package where the money each family gets will be spent on almost everything made abroad will only increase the trade imbalance and in the end worsen the economic health of the nation. That is why I think T Boone is on the right track and I don't know why he isn't getting more support. I don't want to discuss the blame game on the current crises. I can agree that the people in the financial services industry are making way too much money for what they do and the greed there was independent of party. Further, since I grew up in what now might be called the poverty line, my sympathies are with the hard-working men and women and the innovators in this society.Building bridges and roads should take a back seat to building an innovative mass transportation system for our large sprawling suburban metro complexes. What we are doing now makes no sense if you believe energy creation and conservation is a problem. Mono-rail spiders should be built to existing rail and bus routes. Oh well I've been on this kick for many years now and like you I'm frustrated that the political process can't really address the problem with any new thinking.

Buffett Increases Stake in COP - Smart Move!

Fitz, Yoiu didn't comment on the Im-bev sellout. I don't sense anything in what Buffet does other than financial self interest and not what is beneficial to the American people. The Bush Tax cut on dividends is presumably what you are referring to. I don't have any problem with it going back to 20%. Raising the marginal rate on regular income doesn't really affect him. By the way I, for one, am tired of the misinformation associted with the Obama tax proposals. First, the 95% point on family not individual adjusted income is not 250k/yr but actually 179k/yr. This is probably why Biden inadvertedly said that families making under 150k/yr woiuld not receive a tax increase. These numbers are easily checkable. Warren Buffet probably doesn't care since he is only concerned with dividends. A large slug of federal income tax revenue comes from the family income brackets from 80 to 179k/yr. How will Obama be income neutral with his plan and even if this were true, how will he pay for all the new programs he has promised. You can point to savings on the war in Iraq but remember that Obama committed to winning in Afghaniistan, potentially a bigger absorber of money. Infra-structure creation in this country is a monumental task. From all I read and know about this country including contrbuting to building schools there, I wonder what winning means. At this writing the Us has over 50 thousand troops there and as we withdraw fom Iraq, this number is scheduled to go up, if we believe what Obama said in the campaign.

Time to Fill Up on the Strategic Petroleum Reserve

Fitz, I'm not necessarily against your gasoline tax proposal, but as I commented before, I have no confidence that the congress would partition the funds and apply them to a comprehensive energy independence program. If we can't keep the social security trust funds separate, what gives you the confidence that the Congress won't add this revenue to the general fund and use the funds to fund some other program, like universal pre-kindergarten.

Buffett Increases Stake in COP - Smart Move!

Fitz, As I commented on one of your previous articles, Initially I had I favoable opinion of Warren Buffet. Recent actions by him have just about changed my mind. The GE deal did not go over too well with this stockholder. Money lent at 10% is not altruistic or for that matter good for the long term health of the company. The deal caused an instant dilution of 6% and committed GE to pay him for an indefinite time 300m/yr in interest. Then Ge is approved for 140b from the trasury as a backing for its credit corp. The other was his encouragement of the sale of Anheuser-Bush to Imbev . The deal gives Berkshire a windfall and increases the negative ballance in our current account. The third thing though not as significant is the statement that he would pay more income taxes. I think that he should certainly pay at my marginal rate, since his income is orders of magnitude greater than mine and he pays 15%, I agree with him if he and those wealthy hedge fund CEOs pay more. Unfortunately, his statement is being used to justify raising my marginal rate. It would be refreshing if Warren Buffet would back a comprehensive energy plan with both his considerable influence and money..If he did so, I might change my mind again.

Time to Fill Up on the Strategic Petroleum Reserve

Fitz, I agree we got to start somewhere and that is why I'm for kicking off specific projects with specific goals, sufficient funding, and near term milestones Going to the moon in ten years with a sufficient funding stream is my case in point. A special contracting agency was set up to make it happen that,though not entirely independent of the vagaries of congressional interference, was relatvely so. The goal was set at ten years and accomplished in eight. The effort spawned a set of products and manufacturing processes that we still lead the world in.The technologies required in that effort were not as mature as those required for energy independence. I won't argue the case of the efficacy of the Iraq war, but I will predict that if we don't make energy independence a number one priority, there will be more wars, soon, and the Iraq casualty numbers will pale in comparison. For my part instead of spending the rest of the 700b rescue package on the financial sevices sector, I'd put the funds into the programs I have suggested in comments to your last article. I would also like to know what those hedge fund ceo's did to earn their outlandish payouts. My guess is they played the fear in the country to sell the financials short and played the devaluation of the dollar like a fiddle. If It turns out that they manupulated the runs on investment banks, what would you say to my idea to ban hedge funds?

Time to Fill Up on the Strategic Petroleum Reserve

Sorry Fitz I did micalculate. The above numbers should be about 1.5 b/yr for four 2cents/gallon tax and one order of magnitude less than Obama's plan. Otherwise I still hold to the above comments.

Time to Fill Up on the Strategic Petroleum Reserve

Fitz, I agree this would be a great time to fill the Npr. Your gasoline tax of 2 cents a gallon plan has two holes: 1] it only yields an income of150m/year unless I calculated incorrectly. This is like the pimple on the back oy a hippopotamus when it comes to the funding required to achieve your stated goals. This is also two orders of magnitude less than Obama has proposed. As I commented on your last article, I believe that to achieve energy independence along the lines we both agree will take between 1 and 2 trillion over the ten years, Probably closer to 2trillion. This is why I believe that Obama's stated goal and his planned expenditure don't close. 2] A flow through of this money directly to the programs you suggest is a nice idea but I don't believe our Congress is capable,nor does it have the political will to set the process up. Look what has happened to the social security trust fund. The way things are now set up, the social security deductions we now pay are essentially another tax that finds its way to the general fund. The above said, I believe,If we as a country can commit 1 trillion to bailing out the financial services industry, we should be able to commit 1 to 2 trillion over the next 7 years to creating a domestic energy supply that is at least independent of Russia,Iran,Venezuela, most of the rest of the mid-east and the unstable parts of Africa. More than money is needed to solve the problem. National and political will is also needed.By the way as long as you shoot at the bankers, wall street manipulators the greedy corporation CEO'S, et all you should include those greedy hedge managers who earn 1b or more a year and pay at the marginal income tax rate of 15%. Last I looked hedge funds really don't produce product or jobs for the average family and I believe are a destabilizing factor in both the security and commodity markets. My view about gobal warming is there is more assertion than science in the discussion, but if it helps us to become independent of foreign hostile energy suppliers and to create new products and jobs for our citizens, fine.

Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term

Fitz, I thought that the state of Texas passed a 4.6b funding bill for T Boone's infra-structure delivery system a couple of months ago. My early impression of Warren Buffet was very positive, until I, as a GE stockholder, got the details of his investment in the company and found that he was charging close to usery interest rates and that my stock value was immediately diluted by 6%. GE is a multi-national company that still has its headquarters here. I understand the deal even less after GE got a go ahead from the Gov. for a 140b loan backing for their credit corp. That and the fact that Buffet was instumental in convincing the Bush family to sell out to a foreign company, which provided a windfall for his company since it had a substantial stake in the beer company. I hate to be so single minded, but how does this latter action help this country's cash flow balance? Further how does collecting 10% interest or 300m/year on his loan help GE'S long term profitability. Since He already earns more than 99.99% of all folks in the US, and has paid 15% taxes, how does it help to say that he could pay more taxes? Lending at a rate that is more reasonable to US- based companies and encouraging US icons like Anheiser- bush to remain in US ownership would be much more helpful and would certainly be better for the country's current account. If he truly believes that his duty is to pay more in income taxes, he could unilaterally write his personal check every year to the IRS. There is no law that prohits him from doing so. I'm tired of listening to people who don't pay the tax rate I pay and politicians who not only don't pay at my marginal rate, but hardly contribute to charity tell me what my duty is. I am willing to pay at a higher marginal rate, if the Government will take steps along the lines I have suggested to fix our energy supply and spawn new jobs in product areas that are produced in the USA. if that doesn't happen and my taxes go up then I, personally, will start a lobbying activity that asks that the Warren Buffets,and the 6 hedge fund managers who made a billion last year and paid 15% marginal rate pay at least what the people who make between 250k and 1m pay.

Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term

Fitz, T boone just announced he is slowing his wind project down. He also stated in a Tv interview I watched that he was voting for McCain. I think Obama states the right goal on energy, but his timeline is too long[10 years] and his committmrnt woefully small[ 13b/year for 10 years]. The rhetoric sounds good, but his plan doesn't close. The investment needed to achieve the goal is easily between1 and 2 trillion. Further, because he is so constrained by his own constituent pressure groups, it is extremely doubtful that he will make any real near term progress; he will not take the urgently needed near term actions to increase our electrical generation capability garnered from coal and new gas and oil domestic supplies. Nuclear, solar and wind will take longer and should be done simultaneously. That is why I want specific actions to start immediately with sufficient funding and contractual oversite to make it happen. Not to get too abstract, No real solution to our economic problems exists unless we get the country's cash flow balanced. Obama and his collection of advisors has apparently not comprehended this simple fact and so the highest priority for his new administration is the same as the last. Give it to wall street or give a bandaid to the people.We still will do what we have been doing, make our cash flow worse. Putting the money to work in the energy independece task with specific immediate actions works constructively toward solving two of the country's most crucial problrms, simultaneously.Bailing out the domestic automakers is another bandaid driven primarily by labor,and while appropriate constraints should accompany taxpayer money, whatever forcing function those constraints will put on the two crucial problems we face will be small compared to the steps I suggested. If change is on the way I can't see it because I don't believe the Congress is capable of understanding what to do and hasn't the political will to do what is necessary. I am afraid that only a major national catastrophe will give our politicl leaders regardles of party the backbone to make the right decisions.

Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term

Fitz and Mmarrkk, Rather than just critisize, I'd like to suggest the following steps be taken by the existing administration, today, and continued by the next administration: 1] select 3 metopolitan areas which will in 5 years have 1/2 of their energy supplied by wind and solar energy.Candidates could be San Diego, Dallas Ft worth and Pnoenix.2] allocate 25b to each project 3] Run a Nasa-like competitive contracting process for a consortium of companies drawn from the energy,construction and utility world. Specify US ONLY COMPETITION. Be ready to remove all impediments to the erection of solar panel farms, wind mill farms and the electrical grid infra structure.4 ] authorize drilling off-shore for oil and natural gas in known reserve locations.5] give investment tax credits for new hybrid and gas powered manufactuing plants in the US.6] Give purchasers of these cars a 15% tax credit of the purchase price. Allocate 50b to building a natural gas system of delivery for natural gas in a region of the US, SAY the region between Wasington,DC and Boston. 6] Pass laws immediately that make the margins on commodity trades greater than 60 cents on the dollar and that mortgages can oly be sold by lending institutions to each other,i.e. no financial derivatives can be created from the mortgage.7] Impose on all congressional members a rule that they can only drive hybrids or natural gas powered automobiles on official busines if they want their transportation costs paid by the tax payers The rule should go into effect Jan1,2011.8] Allocate 20b dollars to building a mono-rail spider suburban transportation system to reduce daily commuter driving in one metro-complex in the US. Candidates complexes could be nyc, los angeles, Washington,dc Miami. Contracting could be done as above. There are a whole host of other consistent things that should be done with our education system that support the above,but that's another topic. Until I start seeing some steps like the above, I believe it's the same ol' ranting ,raving and political rhetoric and pandering that got us into this mess in the first place.