During the 1/21 broadcast of the Rush Limbaugh show, Rush read a letter to a Green Bay radio station from a Green Bay teacher, who is identified only as "liberal anal teacher" (herein after known as LAT.)  The text of the letter is as follows:

"Dear Mr. Bader:  My name is [liberal anal teacher] and I contacted you via phone message earlier today.  I just wanted to put into writing my complete and utter disappointment in your radio station's choices during President Obama's inauguration speech today.  I understand that Rush Limbaugh built his career around his opinion and commentary.  But I thought that even he would have the decency to honor such a historical and momentous event in our country's history.  I am a teacher at a middle school in Green Bay, Wisconsin.  It was highly unfortunate that when our school decided to broadcast Obama's speech over our PA to our student population of 1,200, our administrators randomly selected Mr. Limbaugh's program.  My students were shocked, angered, and saddened by the interruption of what was a respectful event, truly the most momentous moment of their young lives." 

It seems that the esteemed LAT is upset that Mr. Limbaugh injected some editorial commentary during the speech.  Anyone listening to Mr. Limbaugh would have to agree that his commentary, during the Obama's speech was almost non-existent, and certainly not inflammatory.  However there is a peculiar irony to the distress of our dear LAT, and it is  in light of such irony that the following open letter is offered:

Dear LAT,

I'm sorry that you were upset by the freedom of speech exercised by Rush Limbaugh during the broadcast of his own show, which your school chose to rebroadcast throughout the school.   There are, however, several things you should consider while stewing in your victim-hood of the "random choice" of stations from which to experience the "most momentous moment" of your life.

I wondered at first why the school didn't simply tune in TV coverage, but then realized that it would be quite difficult, without having 1,200 TV's, to provide an "equal experience" for all the students.  With TV, some would be sitting close, others far, such inequality could never be tolerated.  By contrast, with radio rebroadcast through the school PA, all students would have an equal experience - and the school has nothing to buy.  Now, only to choose the station.

The choice however is far from random.

 Radio signals are broadcast in two different varieties.  They can be tuned in either by Frequency Modulation (FM) or Amplitude Modulation (AM).  Since most FM stations are music oriented, it's unlikely that there was any choice but to tune into an AM station.  Most schools are made of steel and concrete.  These materials make it difficult for an AM signal to be clearly received inside such a structure, therefore it requires a relatively STRONG AM signal to bring the students the "most momentous event of their lifetimes."

Broadcast signal power is measured in kilowatts (kW.)  There are three AM stations in Green Bay.  They are:

While observing the current media frenzy over the "Historic" aspects of tomorrows inauguration; it is difficult to not recall the similar, if slightly smaller, media frenzy over the "Historic" nature of Major League Baseball's first black Manager. 

Frank Robinson, a certifiable superstar player, was named as manager of the Cleveland Indians in 1975.  The media spoke loftily about the racial breakthrough and positive historical implications this event held for all Americans.  To make matters even more dramatic, Frank Robinson was to be a "player / manager."  That is, he would be managing the team on the field,  and also be playing a position.  This added something to the drama of the first black manager, not only would he be seen in the dugout and walking to the mound, but he would actually be at the plate, taking his swings. 

When opening day came in Cleveland, every square inch of the enormous, cavernous, Cleveland Municipal Stadium sidelines were filled with reporters, photographers, and TV cameras.  Keep in mind this was before the existence of cable and internet news - if such an event were to take place today, the 80,000 person capacity stadium might not even hold all the media .  Indians fans, while enjoying the hype, had more serious thoughts in mind.  The Cleveland Indians were, at the time, perhaps the most discouraging franchise in all of professional sports.  Cleveland fans were filled with "hope" that this "change" would lead their team to new winning ways.

When Frank Robinson strode toward the plate for his inaugural at bat as a manager, the near capacity crowd rose to its feet in a thunderous ovation, camera flashes came from everywhere, the frenzy seemed to have peaked.  Robinson then drove a towering fly ball to left field,  the already frenzied crowd exploded into a euphoric roar as the ball bounced triumphantly behind the fence, and Robinson took his historic "home run" trot around the bases.  Some choked back tears of joy as they cheered their new hero.  Others cried openly, unable to suppress  the overwhelming emotional belief that this single event  marked an emphatic exclamation of racial justice and equality.  Some found themselves once again believing in the goodness of God. 

The Indians went on to win on Opening Day, and the euphoria continued for about 3 months.  But alas, results in sports are objective and empirical.  No amount of "hype" can turn a strike-out into a hit, or loss into a win.  Soon Frank Robinson found himself subject to the same issues all managers face.  After a two and a half mediocre seasons, Robinson was fired.  Nothing much changed in Cleveland, or in baseball for that matter.  Robinson went on to be a mediocre manager for four other Major League teams, twice finishing as high as 2nd, and never managing a post season game.  The Indians continued their poor to mediocre performances until a new Stadium and ownership breathed life into the ailing franchise.  There have been many black managers since Frank Robinson, and their will be many to come.  

The reason that nothing much changed in baseball, was that there was  not any real racial barrier in 1975 to blacks being managers in Major League Baseball.   While there may have been some reluctance on the part of owners to be the first to hire a black manager, the overriding reason for there being no black managers was a simple lack of qualified, eligible, and interested candidates.  When Jackie Robinson became the first black Major League player it did change everything.  There were Negro leagues where hundreds of qualified, capable, black players plied their trade without hope of ever making it to the segregated Major Leagues of baseball.  Once the barrier was broken, qualified black players were steadily welcomed into baseball, changing the game forever.

Such was not the case when Frank Robinson became manager of the Cleveland Indians.  Being a major league manager requires a very narrow set of skills and experiences that can only be acquired over long periods of time.  Since, blacks had only been playing major league baseball for less than 30 years, their were very few blacks that had both the qualifications and the desire to be a major league manager.  By 1975, it was inevitable that there would one day be a black manager, just as it was inevitable that there would one day be a black NFL quarterback, or NFL head coach.  There were no institutional biases to prevent these things, only the lacking of an available talent pool prevented blacks from entering those roles. 

Consequently, while everyone remembers Jackie Robinson, few remember Frank Robinson as baseballs first manager, fewer remember Fritz Pollard as the NFL's first head coach, fewer still remember Marlin Briscoe as the NFL's first black quarterback.  This is because while they were the "first" blacks to reach certain positions, there were no institutional barriers being broken.  Black managers, coaches, and quarterbacks have come and gone since, none of which has had any serious social or professional impact. 

It is likely that much will be the same with Barack Obama.  While, as in the cases of Frank Robinson, Fritz Pollard, and Marlin Briscoe, the media has hyped the occasion of a black rising to a new position as a moment in history; it really is simply the occurrence of an inevitable event, given that there exists no barrier for a black person to become President.  There are not "leagues" of competent black politicians languishing in wait of a break through.  Blacks have been involved at all levels of political activity in this country since the civil rights movement and the unrest of the 60's.  The battles over racial injustice have been fought and won for a long time in the United States.  There has been no institutional, nor significant voter bias against a black President for many years.  Rather to the contrary, the country seemed to bend over backwards to elect the first plausible black candidate to run for President, when no white person could reasonably be expected to be elected with the resume of Barack Obama.

In conclusion, it's likely that the election of Barack Obama reinforces the true reality that few racial barriers exist in the United States rather than to actually break down an existing race barrier.  As a result, it's unlikely that there will be any significant "change" associated with the racial aspect of the Presidency, and once the media hype dies down - we can return to business as usual.   Perhaps even the media will resist  making "race" the issue every time a person of color achieves something.  Now that's a change for which we can all hope.

Just in time to derail the then surging Republican candidate for President, George Bush, Ben Bernanke, and Hank Paulson announced to the world the the United States monetary system was on the brink of catastrophic failure.  Such failure, we were told, could only be alleviated by immediately creating and injecting 750 billion dollars into the financial markets for the purpose of buying "toxic assets".  The Senate recognized the urgency and demanded an additional 100 billion in pork projects to finally pass the bail out bill.  John McCain did his part by reacting to this "crisis" in a totally incoherent and inconsistent manner - but that is the stuff of another post.

We know now that the afore mention three wizards of smart, were either wrong - or lying.  We don't need any outside confirmation to know this.  By there own admission, they did not buy "toxic assets."  The economy did not collapse.

What the hell are we doing ?

-The financial sector needed 750 billion - or we were all dead.
-The auto industry needed 40 billion - or we were all dead.
-Now the Government needs to spend a 2 trillion dollar "stimulus" - or we're all dead.

In the mean time - back on planet earth (which somehow continues in its rotation without additional spending), the U.S. economy "plunged" to a record setting level of unemployment.  That level is about 3% above theoretical full employment.  Most small and medium sized businesses are responding prudently to signals of economic slowdown.  They are cutting non-essential staff, seeking lower cost vendors, and re-focusing their market strategies toward a public with smaller discretionary income.  This is not a crisis.  This is a vital phase of the private sector business cycle.

It seems that the "wizards of smart" are so completely self centered, they've forgotten that they and their predecessors had little to do with the past 25 years of economic expansion.  The people that drove economic expansion over the past three decades are not, Reagan, Bush, Clinton, Volker, Greenspan, or Bernanke.  The people responsible have names like Dell, Jobs, Gates, Ellison, Torvalds (sorry couldn't resist), Page and Brin.  This is not to say that government did not play a role - it did.  Howerver, the driving force of economic growth is innovation and production.

That is, a useful item is invented, then it's produced - adding wealth to the economy; and defining the business cycle.  Since 1980 we've created major industry segments that didn't even exist in the 70's.  Personal comupters, cell phones, dvds, dvrs, gps, web servers, mp3 players, etc etc.  These innovations account for billions of dollars in economic expansion.  This is why we have a business cycle.  We have a period of innovation, followed by production, and as the market becomes saturated with the new innovation it reaches a point of maturity.  At this point there is little growth by adding new sales, but sales are sustained by the replacement of old and worn out products.

This is where we're at right now.  Most of the innovations of the past have reached a point of maturity.  That is, most of the people that want personal comupters, cell phones, dvds, dvrs, gps, web servers, mp3 players, etc etc. - have them; and there's been little advances in these technologies in the past two years to entice people to discard their current devices in favor of new ones.  For example, since 1995 it was almost axiomatic that businesses replace most of their desktop computers every three years.  The quickly advancing technology meant that failing to keep pace with the latest technology made it difficult to read, exchange, and communicate with those that did keep pace.  Currently, there is no functional difference between a computer purchased in 2006 and 2009; consequently they'll be replaced when they break not because they're obsolete.

Much the same is true for many industries.  The Government would have us believe that we all went out and bought Ipods and plasma screens because the nation appeared to have a sound monetary and fiscal policy.  Such thinking is abusrd.  People bought Ipods and plasma screen tv's because they're really, really, cool.   It is foolhardy to believe, however, that a prudent person would discard his perfectly good plasma screen tv and buy an new one just because the Congress passed a "stimulus package" that put money in a persons bank account.  

This places our economy in a "trough" of the business cycle - not a crisis.  It must be noted that the current "trough" is deeper due to the simultaneous  bursting of a government induced real estate bubble, and a spike in gas prices that absorbed huge amounts of disposable income.  No amount of "stimulus" is going to cause a prudent person to make an imprudent purchase.  Currently, people are behaving with full rationality by being frugal.  Given that there are few compelling innovations that pique the interest of the consumer and the Government is screaming that we are in a "crisis;" it is completly rational for both business and consumer to remain frugal.

The idea that the Government can embark on a totally irrational spending plan with the objective of spending enough money to cause people react equally irrationally - is nothing short of insanity.

Government's role in a free market economy is to provide a positive business environment by enforcing equitable laws of commerce fairly and consistently throughout the system, and to maintain the quality of the currency through sound fiscal and monetary policy.  That's it.  Such Government actions provide a high level of confidence in both investors (foreign and domestic) and innovators.  It is stability and confidence that provides the proper climate for the innovation that yields economic growth.  When peoples confidence in fair, equitable laws of commerce, fair taxation, a stable currency and financial system returns; so to. will innovation and production return.  Only then will we be on our way to recovery and prosperity.

There are those "Keynesians" who insist that the Government must "Prime the pump" with deficit spending.  This is at best debatable.  In any case, one must remember that the "pump"  is the economic climate made of sound fiscal, and monetary policy, buoyed by a sound currency and equitable enforcement of laws of commerce.  Government actions should be focused on correcting deficiencies in these fundamentals of our economy.  No amount of priming will fix a broken pump.

Much has been made in previous weeks about Caroline Kennedy's lack of qualifications for Senate.  She's never held elective office, and she seems to say "you know" a lot.  Ipso facto, so the logic goes....... She's not qualified to be a Senator.

This logic seems rather peculiar.

It seems many have the mistaken belief that there are extensive qualifications required to be a Senator.  Few things are farther from the truth.  There are, in fact, almost no qualifications required to be a Senator.  More importantly, the tasks required of a Senator are breathtakingly simple.  The only thing a Senator actually does, is vote.  There vote is either yes - or - no (or I guess "present" if you're really stumped).  There vote is never more than 1 in 100, and in almost every case the vote is cast along with the already established "Party Position."  To be sure, there are a few "Maverick" Senate votes, but far fewer than one might imagine.  One can vote along party lines more than 90% of the time and still claim to be a "Maverick." 

So, about those qualifications . . .

It seems that by "qualifications" for Senate what is commonly referred to as qualifications is the ability to parlay legislative influence into campaign contributions to further solidify ones political power and stature.  The only other observable "qualification" would be to become adept at guiding mal-invested public funds to ones own state for the purpose of garnering greater public support for re-election.  Is it really so terrible that we might have a Senator that lacks these "qualifications ?"

From a practical standpoint, Caroline Schlossberg is an attorney, she has written extensively, and served on the boards of several non-profit organizations.   While this resume may not be overwhelming, one must also remember that there don't seem to be any bright red flags in the background of JFK's daughter.  She has no apparent history of shady real estate deals with convicted felons, there don't seem to be any admitted terrorists in her "posse", her religious inspirations haven't come from America hating wacko's, and she's not been involved in a U.S. attorney's office sting for trying to buy the Senate seat. 

Face it people, she's as qualified and capable as any of the other pompous, self centered, ego- manical, occupants of Senate.  Besides that, she's not half bad looking.  What's the real problem ?  Many states have customarily made the wife of a Senator the acting Senator in the event of a death in office.  Surely Mrs. Schlossberg is as qualified as most Senator's wifes. She'll have to actually "run" for the office in 2010 - if she's so bad - she'll get voted out.

Let's back off of Caroline Kennedy and rather use the opportunity to explain how there are no real qualifications required to be a Senator, which in turn means; being a Senator for a long time is not really a qualification for anything - especially the Presidency of the United States.

How big is the world ?

How crowded is the world ?

Overpopulation, pollution, carbon emissions, global warming; are we killing our planet ?

We, as humans are somewhat self-centered by nature.  Additionally, it seems we're all biased by our immediate observations.  That is we tend to look at our surrounding environment, and imagine the balance of the world looks much the same way.  This is perhaps reinforced by the fact that we humans often move about from place "A" to place "B" with both "A" and "B" looking very much alike.

For example, one can board a plane or begin a drive in Austin Texas, and travel 1,500 miles to Cleveland Ohio, and observe much the same surroundings.  That is, at both locations one would see a metropolitan area consisting of single family homes, businesses, shopping centers, restaurants, streets, traffic lights, etc. etc.  One would also see people living and moving about in roughly the same density.  That is, about the same number of people per square mile. 

That density changes somewhat from city to city.  New York, for example is characterized by a quite dense population, while Kansas City is much less dense by comparison.  Yet, in either example one would observe several thousand people per each square mile of area.  We tend to develop the perception that the worlds surface is rather uniformly populated with several thousand people per square mile. 

This common perception can be illustrated by asking this theoretical, yet simple question:

If all the worlds population stood shoulder to shoulder, heal to toe (in crowded concert style) how big an area would it take to hold all the people of the world ?

The answers most often heard are; North America, China, half the U.S., or some other significantly large land mass.  When the answer is presented most people are stunned.  Many question it's truth, even when confronted with the rather simple mathematical proof. The answer goes like this:

Assume every person stands in a 1.5' x 2' square.  This can be done quite comfortably.  This allocates 3 square feet per person.  Assume there are 6.75 billion people in the world - this is the estimated population for January 1, 2009.  One can determine the requisite number of square feet by simply multiplying 6.75 billion by 3.  Once that calculation is complete it's useful to convert the number to acres by dividing by 43,560.  Or dividing by 5,280² to get square miles.  Either way one can then consult a common variety almanac to get the area of a particular country, state, county, or city.

Since this writer resides in Travis County Texas, an average sized Texas county, that seemed like a good place to start.  As it turns out, the entire population of the world can fit into about 71% of Travis County.  The calculations are:
-->

World Population	6,750,000,000
Number of sf to stand in	3	sf
World pop stands in	20,250,000,000	sf
(divide to get sq. miles)	27,878,400
Conversion to Sq. Miles	726	sq miles
Travis County TX total area	1,022	sq miles
World Population fits in	0.711	pct.	of Travis County Texas

There, in 3 simple calculations, and two simple fact references (world population and area of Travis County) there is irrefutable evidence - the world is far from overcrowded.

Of course, there are those that will argue that this is purely theoretical, and that we could never really put that many people in Travis County.  This is probably true, but one must also remember that this is all on one level.  Using multi-level structures to hold people is not even considered.  In any event the point is that the common perception is that the worlds population  could cover large swaths of area, occupying large countries or even continents; and that common perception is very, very wrong.

Excerpted from "The Emergency Economic Bailout Act of 2008"

SEC. 2. PURPOSES.
The purposes of this Act are—
(1) to immediately provide authority and facilities that the Secretary of the Treasury can use to restore liquidity and stability to the financial system of the United States; and
(2) to ensure that such authority and such facilities are used in a manner that—
(A) protects home values, college funds, retirement accounts, and life savings;
(B) preserves homeownership and promotes jobs and economic growth;
(C) maximizes overall returns to the taxpayers of the United States; and
(D) provides public accountability for the exercise of such authority.

And so ended the era of free market capitalism.  

That free market era began with a humble upstart nation in 1776.  That nation grew to a world power in the 20th century, and thundered to a roaring crescendo of wealth and productivity at the turn of the 21st century.  Yet, the end came swiftly, and almost without warning.  It came as a result of the greatest attack ever perpetrated on freedom and liberty in history.  The attack was as vicious and premeditated at the 9/11 attacks of 2001 - only wildly more successful.

When the plan was first conceived may never be known, but the first salvo in the attack came with an announcement by President Bush, flanked by Treasury Secretary Paulson.  Many pure capitalists were never comfortable with Secretary Paulson.  The successor to Jon Corzine, Stephen Friedman, and Robert Rubin as CEO of Goldman Sachs, Paulson epitomized the "crony capitalist".   The almost seamless morphing of high ranking cabinet members into Financial Sector CEO's had been going on for at least three Presidential administrations.  Like Corzine, Friedman, and Rubin before him, Paulson made a career of parlaying governmental influence into personal wealth.  He, like his predecessors, relied heavily on his influence rather than his business acumen to achieve business success.

In mid-September of 2007, Bush, Paulson, and Bernanke announced that without the "The Emergency Economic Bailout Act of 2008"; the U.S. economy would fall to ruin within weeks.  The explanation for the urgency of the crisis was the existence of "toxic securities" backed by defaulted mortgages.  This crisis was detailed in some depth here in this blog.  It now seems like it was something of a ruse.  While the pretext of the crisis was plausible, it now seems to have been exaggerated.  In effect, George Bush was "rolled" by Paulson and Bernanke.  The President seems to have regained some economic bearings and talked extensively about the merits of free trade - but the damage has been done.  We are now beyond the tipping point, and well on our way to a centrally planned, rather than a private sector economy.

Worse yet, we're heading into an era where the new President is the most naive, inexperienced, and economically illiterate person to ever hold the office.  To be sure, if the wall street crony capitalists could "roll" George Bush, baffling  Barack Obama will be like taking candy from a baby.

The next wave in the attack on liberty came with the "Auto Bailout" which is still being negotiated.  It will most likely take place in a series of attacks.  With the Senate and the President now showing signs of resisting the creation of US/UAW Motors, and the auto makers decrying their eminent demise with out Federal billions, the likely action will be Paulson and the TARP funds to the rescue.  The CEO's of the "Big Three" are not experienced "car people".  They're finance and securities people.  Nardelli, came from Home Depot, Mulally came from Boeing, Wagoner is a long time GM employee - but clearly a bean counter, not a designer, organizer, marketer type.  These three have essentially given up on the idea of correcting their business models, and chosen to pettition Congress for cash and in return will allow Congress to take over strategic control of the companies.  This will almost guarantee the demise of this domestic industry.

There are two more big attacks currently being planned.  One will be based in Universal Health Care, the other will be environmentally based in "green jobs" and carbon "cap and trade" programs.  The future of Governmental Health care can be seen quite clearly in many current examples.  We can look to Europe, Canada, or our own Medicare system to see the grim future.  Perhaps more importantly, expect medical breakthroughs to come to a vitual halt.  With only a single customer to call on, innovations in treatment, drugs, and equipment will be replaced by hiring the most skilled lobbyists to get Government contracts for medical goods.

The "green revolution" will be the final blow in the destruction of our economic power and failure of capitalism.  With strict Cap and Trade carbon emissions limits in place, coal, oil, and gas, will have to be augmented by solar wind and other carbon free alternatives.  These alternatives won't really produce any electricity, but they'll provide enough carbon credits to run the coal, oil, and gas facilities to serve the shrinking demand.  This results in a gross mis allocation of wealth and resources.  Both public and private wealth will  be diverted to the building of stupid wind farms and solar fields, non of which will produce any reliable power. 

Yes, through all this - fortunes will be made.  Fortunes based not on market and merit, but based on Government selection.   This will eventually devestate the value of the dollar, and plung the U.S. into at least a second tier economic status, and the fortunes based in dollars will become of little consequence.  Our military will follow close behind, and the world - once safe from despotic agression under a vast umbrella of U.S. military might, will once again be in peril.

Can the death spiral of Capitalism and Freedom be stopped ?

Yes.

But to do so, there has to be at least some one left, other than this writer - who believes that it's worth saving.

Perhaps Dr. William Bennett is the most fond of stating with almost smug conviction, "We are still a center / right country."  This phrase has often been repeated in the wake of the most recent election results, usually while citing the vote to constitutionally prohibit gay marriage in California. 

Does no one else see the nonsense of using this as as evidence of a "Center / Right" society ?

In order to make sense of this term, one must consider how far left the center has moved.  In keeping with the example of homosexuals and there treatment in society, let's review the history of the "Center", so to speak. 

In colonial times, homosexual behavior between men was punishable by death.  That was the "center" position.  In 1682, that liberal bastion of Pennsylvania became the first and only one of the colonies to remove homosexuality from it's capital crimes.  Instead, they limited punishment to whipping, forfeiture of 1/3 of one's estate, and six months of hard labor. The law was amended in 1700 to life imprisonment or castration.  Oddly, this "liberal" view of homosexuality was inspired by the prevalence of the devoutly religious Quakers in Pennsylvania who favored forgiveness over punishment.

Take heart dear conservatives, in 1718 Pennsylvania revised it's laws to move back to the political center, and re-instituted the death penalty for homosexual behavior. 

Of course, during this era, the Colonies were somewhat more progressive than the right leaning homeland of England.  In the case of R. v. Jones in 1776, as the defendant was convicted of a capital offense after obtaining money from a victim under the threat of a public allegation that the victim was a homosexual.  During that period in England, simple extortion was a misdemeanor, but extortion under threat of public allegation of homosexuality was considered more deadly than to put a gun to ones head - hence it was robbery, and therefore a capital offense.  In short, in England one could be hanged for accusing one of being a homosexual - if one demanded payment to silence the allegation.

While these laws are difficult to imagine in modern times, it would seem that approximately 1/3 of the sovereign nations of the world have laws prohibiting homosexual behavior, and about 1/7 of the worlds population consider it an offense punishable by death.   Here in the U.S., laws prohibiting homosexual behavior existed until very recently.  In 2003 the U.S. Supreme Court in "Lawrence vs. Texas" essentially ruled that States have no authority to prohibit homosexual behavior. 

The point here, is that the "center," as it relates to homosexual behavior, has moved from hanging offense, to rarely used hanging offense, to felony offense, to rarely enforced felony offense, to misdemeanor offense, to rarely enforced misdemeanor offense, to legal; and now the push is  for parity with traditional marriage.  If the fact that 60% of Californians don't believe homosexual relationships are the complete legal, social, and moral equivalent of thousands of years of traditional marriage is evidence that we are a "center right" society - then it's also evidence that the center has moved way to the left.

Many years ago, the U.S. Government "bailed out" Chrysler.  After 9/11 the Government bailed out the airline industry.  Most recently, AIG, and the banking industry.  Why not, so the argument goes, GM ?

Perhaps because it's too big to save.

It is argued that if GM were to fail, that the economic impact would ripple throughout the world, leaving a long and enduring recession in its wake.  This possibility certainly exists.  What, one must ask, are the consequences of a bailout?

The fact that GM is losing money at a stunning rate is not immediately reconcilable with their market position.  Their products are competitive, their pricing is decent, their marketing is very good, and they sell more cars than anyone in the world except Toyota - and it's very very close.  They hold a commanding market share, and have good production and distribution systems.  What will change with  Government participation ?

The ugly truth about GM is that they represent a microcosm of the United States Economy.  They are being burdened with an unsustainable health care and retirement burden that is the product of decisions made 30 years ago.  Some of the decisions made in the 70's were just plain bad business.  Some of them were sound at the time, but have become damaging because of unpredictable changes in actuarial reality and the cost of health care.  These are the same things that threaten the long term health of the U.S. economy.  GM entered into collective bargaining agreements that obligate the company to pay large pension checks to retired workers, while providing the best health care available in the civilized world.  When GM entered into these agreements, the average worker could be expected to live to 68 years old, and the end of life costs of care were normally small or at least reasonable.  In the current reality, that age now approaches 80.  Most importantly, the medical care costs for those that live beyond 75 are staggering.  In 2002, the "Health Research and Education Trust" published the results of its work on the subject of elderly care and found:

"From 1992 to 1996, mean annual medical expenditures (1996 dollars) for persons aged 65 and older were $37,581 ..."

Clearly, since that time medical care has not gone down.  Currently GM is supporting 2.5 retired workers for every active worker.  With medical costs escalating and operating margins plunging - there seems to be no way for General Motors to sustain the current status quo.  Quite simply, both they and the unions made a bad deal.  The union used poor judgment by asking for too much, and management used poor judgment in agreeing.  The consequence of such poor judgment, in the private sector - is failure.

Yes, the failure of GM would plunge thousands of people onto the public dole.  But is it not better that those on the public dole do so openly ?  Is it not better that they receive the level benefits consistent with social security and medicare rather than the gold plated benefits of the UAW ?  The workers and union are not innocent bystanders in this debacle.  They union made unsustainable demands, the workers voted for the contracts that have broken the company.   

It is unlikely that even a chapter 11 bankruptcy (reorganization) could salvage General Motors.  GM is yet another microcosm of what has become a major flaw in our current market system.  That is:

It is run by retards.

( Ok, that's a bit much - but what the heck, lets enjoy some free speech while we can)

More accurately, General Motors is no longer run by "car people."  Much is the same with every other fortune 500 company.  GM is run by "financial people."  These are a select group of people who rotate from large company to large company much the same way NFL coaches move from team to team.  The "CEO class" isn't particularly adept at any particular industry.  Rather they are adept in manipulation of corporate operations in order to maximize the per/share value of the company's common stock; and then to use that stock as a form of currency to acquire other businesses which in turn can further enhance the company stock value.

Oddly, when this writer attended MBA school - such speculation with either company equity or liquidity  was considered a cardinal sin of business management.  Now it is the staple of industry and the mainstay of the fortune 500.   This is not to say that CEO's are to be financially stupid, but to say that the focus of the company should be on cars, not stock manipulation. 

The dominance in "financial people" is much less so in the Asian auto industry.  For example, Toyota chose San Antonio Texas to locate it's 2,000  acre tundra plant.  For those that are not pick-up truck savvy, the Toyata Tundra is not a small efficient environmentally freindly vehicle.  It's a full sized pick up.  More  accurately, it's a 12 mpg beast.  And it's expensive.  The decision to locate in San Antonio was supported by many demographic and geographic aspects, but it was also influenced by the first hand observation of Toyota upper management, while walking through the parking lot of a Dallas Cowboys game.  After walking past row after endless row of parked large pick-up trucks (mostly Ford and GM), the Toyota management (so the legend goes) concluded - "We've got to build trucks in Texas."   And they did.

In the final analysis, the top management of GM, Ford, and Chrysler made bad decisions - ultimately because they were poor managers.  If their decision making and poor corporate performance was not conclusive enough evidence, one need only look to their reflexive response to the current challenge.  The founders of these companies were captains of industry, rugged individuals, and innovative entrepeneurs.  The current management teams bear little likeness to their founders.  (Umm... is there yet another microcosm here?)   The auto makers look more like Ray Nagin during Katrina than Henry Ford during the depression. 

The solution offered by the "Big Three ?"

Give us money.  Or we'll fail - and you'll look bad.  What's more, you might get voted out of office without labor backing.  This is not capitalism.  This is not wise.

These auto makers must either shed their unsustainable contracts via bankruptcy, or liquidate outright.  In either case, the factors of production must be re-allocated to the control of those that are capable free market industrialists who know the auto business - not a bunch of Wall Street stock manipulators. 

Karl Rove may be a brilliant political strategist.  It seems he's undefeated.  But he's left a scar on the Conservative movement that must be quickly and thoroughly removed.

Rove may not have introduced the concept to the Republican Party, but he certainly expanded and relied on "Identity Politics" more than any Republican in the past.  For those unfamiliar with the term, identity politics is the political strategy of pandering to a perceived segmented identity of the electorate.  While Rove believed strongly in "energizing the base" as a staple of his political strategy, he rejected the concept of persuasion and ideological discourse to attempt to broaden the appeal of the party; and rather opted for the strategy to "pick off" identifiable segments of voters by blatant pandering.

George Bush felt the need to increase his appeal to geezers (er that would be senior citizens).  That brought us the almost incalculable burden of a government backed prescription drug program.  There was the need to shore up the vote among the Ohio/Pennsylvania steel workers.  That brought us the a tariff on imported steel.  There was a potential weakness in the much heralded "soccer mom" segment; and hence we were gifted with "no child left behind."  Perhaps most importantly, seeking a boost from the growing Latino population; there was a desperate attempt to force a through legislation known as "Comprehensive Immigration Reform." 

Traditionally, identity politics has been the domain of the left.  This is why the left is comprised of widely disparate identity groups that often have little in common.  Blacks, gays, latinos, environmentalists, labor unions, homeless, and ivory tower professors often agree on little other than they need to vote Democrat.  Since Democrat philosophy cedes all wealth and power to Government, it is ideologically consistent with the Democrat message to make specific offerings to these seemingly disparate "identities."  By contrast, the Conservative message of limited Government, individual liberty, and limitless opportunity is ideologically incompatible with the pandering of identity politics.

One cannot make a sustained argument for limited Government while promising gifts from the public largess.

John McCain has not through out  his career, and certainly did not during his Presidential campaign, promote the advantages of conservatism as a consistent campaign message.  His campaign was littered with poorly thought out "counter gifts" to voters in response to Obama's virtual Christmas list of free health care, mortgage relief, and education funding.  The muddled message of giving away government largess in a more judicious fashion than ones opponent does little to excite those that believe in true conservative principles.

This is not to say that reaching out to various groups is not important.  It is vitally important to reach out to every citizen in the United States.  The outreach however must be one of persuasion, not pandering.  We must explain clearly that the principles of limited government, and empowered individuals are beneficial to EVERYONE.  We must explain that blacks, gays, latinos, environmentalists, labor unions, homeless, and ivory tower professors alike benefit from being free of Goverment limitations on their own god given abilities, and that the acceptance of largess places burdens on the productive sectors of society that ultimately limit their possibilities to achieve greatness - or even mediocrity.

We must aggressivly deny and denounce every mention of Identity Politics.  We must consistently reinforce the message that conservativism is blind to color, creed, ethnicity and gender.  If we succumb to the temptation of pandering to various groups with competing gifts confiscated from the public coffers, we will continue to be defeated at the polls by Democrats who can do so with greater philosphical consistency and zeal.

Barack Obama out polled John McCain in the only poll that matters last night.  It's hard to imagine the outcome yielding much in the way of things that are good for Americans who hold conservative values.  But, alas, every cloud has a silver lining.

It allows the conservative movement to identify the posers.  Those that don't really have or respect conservative principles but play on the team they believe will win in an effort to enhance their own careers.  (Do you hear me Peggy Noonan ?)  When the political tide turns once again, we can welcome back their votes - but never trust their leadership.

We may have quantified the value of campaign cash.  Obama had the closest thing to an unlimited supply of money as has ever existed.  Still, McCain held his own with the available cash.  It doesn't seem that McCain was as short on cash as he was on a coherent message.  His bungling of the psuedo crisis generated by secretary Paulson may go down in campaign history as a faux paux of that rivals Dukakis on the tank.  Even so, with bunbling funbling message in tow, McCain, buoyied by unlikely support from Limbaugh, Levin, Hannity et al; hung tough until the last day.

I think it's fair to say the conservative base is strong, conservative principles are strong, the conservative media is strong, but the Republican candidate was weak.

In 1968, Richard Nixon defeated Hubert Humphrey in a relatively close election.  It was that year that at ten years old, I began my fascination with politics.  Since that time I've been proud of my ability to "read the tea leaves" and make reasonable projections about upcoming elections.  Though, not perfect, my record is generally good.  But even in cases where I've been incorrect, I've almost always had a "gut feel" for which way things would go.

This year is different.  Quite different.  So much so, that I won't be surprised at any outcome.  It could be Obama in a landslide, Obama by a narrow margin, McCain by a landslide, or McCain by a narrow margin.  Of these possibilities, it is only the "McCain by a landslide" that causes people to react.  To that end, allow me to endulge myself in my perhaps delusional scenario of a McCain landslide.

But what of the polls?  What of all the polls?  They ALL say OBAMA.  Some by a lot, some by a little.  Surely if McCain wins it will be by the narrowest of margins.

This is where the tea leaves become wind blown, and the crystal ball gets cloudy.  The polls have told us for months that the State of Iowa was a double digit win for Obama.  That seems reasonable since McCain has always opposed grain subsidies for ethanol and has never been popular in Iowa.  Yet, in the final days of the campaign, Obama is campaigning in Iowa.

Can it be that Obama can't read the polls either ?

Barack Obama is running ads in California.  The consensus explanation is that he's trying to support the gay marriage initiative - but is that believable?  This is a candidate the told his own party that he wouldn't lend financial support to any others in his party, now we are asked to believe that he is burning money to aid in turn out against a state wide ballot initiative. 

Is it not remotely plausible to conjure a different scenario?

McCain, the senator from neighboring Arizona, has always been popular with Californians.  McCain is also the virtual patron state of Mexican immigration.  The electorate in California is almost 1/3 hispanic.  Hispanics, especially those who've recently immigrated, harbor some of the deepest racial bigotry of any demographic in the country.  Is it not possible to conceive that many of these voters will vote McCain ?  Perhaps even while feigning support for Obama ?

To be sure, an upset in California is unlikely.  Most polls place Obama in a +20% margin over McCain.  But given the historic voting patterns of the State demography, the gay marriage ballot initiative that will energize conservatives, and the fact that McCain is a virtual "Arnold clone" (without the steroids); the possibility of a strong McCain showing should not be completely discounted.  Remember, Obama lost California to Hillary by almost 10 points. 

Even if one discounts a possible California upset, close by Nevada, New Mexico, and Colorado share similar characteristics, all the voting models predict a heavy hispanic turn-out, and a heavy support by hispanics for Obama.  At this point I must inject my own subjectivity.  I'm in the construction business in Central Texas.  I spend a good deal of time near the border in and around Laredo.  I deal with Hispanics every day.  As of today, there is not a single blue collar Mexican-American I know that is going to vote for Barack Obama.  This evidence is by no means statistically significant, but it definitely adds to the cloudiness in the crystal ball.  In short, it seems plausible that the voter poll models that identify large Hispanic turn out in western states as a Democrat strength - might be 180 degrees out of phase.

Should any of this analysis have merit, moving from West to East, McCain would sweep the west and mountain states, losing only Washington and Oregon where liberal white guilt and mail-in voting will carry the day for Obama. 

In the mid-west, we have a different dynamic in place; but once again we are presented a voter turn-out model that assumes high "young voter" turn out, "record black" turn out, and a higher Democrat voter ID than Rupublican.  Oddly, while we've been likewise treated to study after study which indicate that stunning numbers of white democrats will never vote for a black person, that is never reflected in polling results.  Accordingly, we have a "turn-out" model that skews way to the Democrat side, anticipates huge black voting (both likely to be true) but ignores any possibility that there may be a counterbalancing segment of the traditional democrat voting coalition.  Those would be the bitter clingers of rural Pennsyvania, and Ohio.  Those are the people who've been told for forty years that the plight of black people is their fault and responsibility.  Those are the people who need just the slightest excuse to abandon the Obama Jauggernaut.

Much of the East is clearly leaning heavily to Obama.  There are a couple of possibilities for surprise though.  New Hampshire stunned Obama in the primary after polls showed him the double digit favorite.  Massachusetts voted for Hillary.  The idea that Massachusetts might vote Republican is absurd.  The final numbers there may be surprising however.  The elderly population of Massachusetts has a very wary support of Obama.  The "Aunt Zetuni" issue fell flat on most of the country, but it hit hard in Boston.  If Massachusetts isn't called by 7:00 Eastern time - it could be a bad sign for Obama.

The Palin factor has been totally discounted.  She's been identified as a drag on the campaign, but seems to be the main reason that the outcome of this election is still in doubt.  This could be something of a "Bradley multiplier."  Some, who support McCain tell pollsters they're voting for a Obama because they don't want to be thought of as racist.  Is it not possible that some women are hiding their support of Palin because they don't want to be thought of as sexist ?

OK, maybe Obama wins in a blowout.  But here's what it takes:

-Youth vote makes a big turnout (this would be a first)
-Black vote increases dramatically (even though in every previous election democrats registered and bussed blacks to the polls by the thousands)
-"Bitter Clingers" suddenly become enlightened
- Hillary supporters remain insignificant
- Few women are secretly enraged at the mocking of a strong successful woman
- Mexicans will shed their bigotry and enthusiastically wait in lines to vote Obama
- Jews completely ignore they're voting for a guy named Hussein
- The Republican base is so demoralized - they stay home.

Of course, that's not to say it won't happen exactly that way - but I'll believe it when I see it.  Right now I'm going out to stand in line at 6:45 am, in a state that is not a battleground, to vote for the man I personally spent thousands of dollars and hundreds of hours opposing in the primaries, - John McCain

 

Many of us live in "uncontested" States.  It is easy to be drawn to the conclusion that casting a vote is a futile exercise in either direction since, after all, the winner is a foregone conclusion.  If one is a conservative Republican living in California or New York, it is difficult to argue that ones dutiful voting might tip the electoral balance in this election.  Any pragmatic, thinking person realizes that it won't. 

So why bother?

After the votes are counted and a winner is declared, it is "the numbers" that will be used by the victor to claim the strength of his "mandate" to govern.  In a closely decided outcome, the losing party will cite "the numbers" to justify a full throated opposition to the agenda being advanced by the party in power.  It is in these "numbers" that every vote sincerely counts.  At the start of the Bush administration democrats consistently referred to Gore's popular vote totals to support their opposition to the new administration. After the George Bush was re-elected, by a significant margin, the administration began to speak of a mandate to govern. 

In terms of the election at hand, one party is proposing massive "change;" while decrying the "failed policies of the past."  Unfortunately, this party has never been tasked with defining either the specific changes being proposed or what specific policies have failed.  Many fear that what the Democrat Candidate describes as "failed policies of the past" are in fact the very underpinnings of capitalism.  Should the governing coalition of Reed, Pelosi, Obama become a reality, there will be little to resist the move to socialism.

In the event of a REPO (Reed Pelosi Obama) government; their only constraint will be the votes of Congressional members facing re-election.  It is in this scenario that a single Presidential vote is magnified, even if cast in opposition to a winning candidate.  The U.S. Congress is comprised of a few principled individuals, and a majority of politically motivated self serving people who's greatest concern is their own re-election.  When faced with controversial issues, congressmen often refer to the Presidential election results as a template by which to structure their own positions.  The Bush/Kerry results, district by district, precinct by precinct, were used by the Democrats to identify vulnerable Republican seats in 2006.  The majority of Democrat gains were the result of a conservative Democrats running in districts where Republicans were displeased with the spending habits of the current Congress.

It will be important that those Democrats in Congress that will be serving their third term, and have the temerity to resist the leadership, know that the district they represent is likely to vote them out of office if they can be too closely tied to a very liberal REPO agenda.  These Presidential voting results also become the tea leaves that are read by potential conservative challengers in the next Congressional election.  If you are a conservative living in a liberal area, a vote for McCain is smoke signal letting the party know that you are there.  To this end, it may be even more important to vote if you live in a traditionally liberal area.  Your vote may be the difference between having a congressional challenger or having your representative run unopposed.

On a more technical, yet important aspect, the Presidential voting results are likely to weigh heavily in Congressional Districting maps that will be drawn in 2010.  Remember, most Congressional members are political cowards.  Even a Democrat controlled legislature will gerrymander in a single Republican district, if it means the rest of them face easier re-election conditions.

In any event, the vote is important in many ways beyond the simple winning and losing of the Presidency.  The size of the mandate, the signals to your voting representative, and the implications for redistricting are all to be considered before one decides - it just doesn't matter.

Nothing is complicated.

An issue is most often referred to as "complicated" when truth is being obfuscated for some reason.  When the response to a reasonable question begins with the phrase "it's complicated"; one can rest assured that he is about to hear either a blatant lie, or the that the respondent really doesn't know what he's talking about.  If one has a sound understanding of almost any subject, it can be explained succinctly and clearly enough for anyone to understand

This is not to say that some subjects take more effort to explain and understand than others. 

The current state of U.S. financial markets is just such subject.  It's more complex than one line descriptives handed out by pundits and politicians - but no where near as complex as some high minded financial analysts would have one believe.  Oddly, it just may have something to do with a "pig" and "lipstick."

OK - this will take about 15 minutes of sincere effort on the readers part, but here goes ...

First - The Players:

United States Congress
Mortgage (consumer banks)
Investment banks
Fannie Mae / Freddie Mac
FDIC
Insurance Companies
Home buyers/depositors
Investors

What happened . . .

The U.S. Congress, following a long held public policy of promoting single family home ownership, put increasing pressure on the banking industry to make more loans available to historically underprivileged people.  Traditional mortgage lenders resisted putting money at unusually high risk.  Congress took action to "incentivise" risky lending.

1. They loosened the standards for the repurchase of mortgage securities by the Federally chartered "secondary mortgage" banks, "Fannie Mae" and "Freddie Mac."

2. They eliminated the statutory separation of "investment banking" and "consumer banking" allowing more competing capital into the mortgage lending market.  Soon, traditional consumer banks were offering investment products, and investment bankers were opening passbook saving accounts. (This was probably inevitable, and not bad in itself.  But it did increase the ability of this problem to spread quickly)

Money flowed into the housing market.  Loans were made on what would be considered "risky" terms by conventional standards.  Ok so far ?  Most people understand the history of this debacle up to this point.  But how do 5% of U.S mortgage defaults  become an international monetary apocalypse?


Mortgages  were quickly sold back onto the secondary market.

That is, banks having made risky loans quickly sold them back to Fannie Mae and Freddie Mac.

These two Federally Chartered Corporations then bundled, and repackaged groups of loans into investment grade securities, and sold them on the open market as AAA  rated Treasury Listed securities.

---This dear readers, is FRAUD.  It is CRIMINAL.  It is PROSECUTABLE.  It is knowingly misrepresenting high risk investments as Federally backed low risk debt intruments. It's perpetrators should be imprisoned for life.  Their actions have put the worlds free market economy at risk in a way that no terrorist attack could. 

Of course, complicit in this crime are the same people that now tell us that only they can save us from their own deceitful, corrupt, willfully criminal behavior.  Those people, of course reside in The Congress of The United States.


Financial Institutions all over the world bought these high yielding, low risk, investment grade securities.  Many of the lenders who sold these risky assets to Fannie Mae, Freddie Mac, bought back the re-packaged securities and held them has high quality assets.  They were actually allowed to use these securities to justify their ability to make more loans.  Many investment banks bought these securities and further bundled, and repackaged them has high yielding investment securities. 

For many years, these high yield, "low risk", securities demonstrated good performance and became popular investment products throughout the world.  It is probably impossible to know how many dollars are actually invested in funds that are supported by these base assets - the original "risky" loans.

Because these were being sold by a "Government Entity" there was something of an implicit guarantee of the full faith and credit of the U.S. Treasury, although no explicit guarantee actually existed.

Often, investors buying these investment products from the "FM's" would be wary of the non- guarantee of the Federal Government, and choose to insure their revenue stream with an insurer such as AIG.  Additionally, insurers sought to invest some of their premiums in high yielding mortgage backed securities.

All of this activity put huge amounts of available liquidity into the home mortgage market.  The huge amount of available mortgage money put excessive upward pressure on the price of homes.  This resulting inflation of the value of homes was also a major factor in what made these loans profitable.  This is becomes a classic "bubble" situation, where the escalation of home prices was creating profit for the mortgage industry, thereby providing more available capital to lend, which in turn drove prices higher.

In short   . . .

High risk loans (dare we call them "a pig") were being bought, aggregated, repackaged, and sold as securities by  Federally Chartered companies which "implied" being backed by the U. S. Treasury. (Sounds a bit like "lipstick").  For a some time, these securities showed large gains, and provided liquidity for even more risky loans.  Eventually, the rate of loan failures grew high enough to depress the market value of homes, thereby eliminating the source of gain in most of these re-packaged funds.  Because the underlying asset values began to steeply decline, and "mark to market" rules were enforced; the once highly rated investment securities began to also erode in value.

As debt instruments began to default, creditors called in insurance policies that insured them.  (Goodbye AIG)

As individual investment portfolios declined in value to reflect "mark to market" standards; investors fled the funds, called in their cash and looked for safer alternatives.
(Goodbye Investment Banks)

Banks were required to mark the asset values to almost nothing, dramatically upsetting their asset to loan to asset ratio and severely limiting their ability to legally make new loans.
(Goodbye available cash to normal borrowing customers)

As bank loan to asset ratios continue to decline, they risk not having available liquidity to even meet demand deposit  obligations.  That is, checks drawn on such banks could be refused, the bank declared insolvent, and depositors money become unavailable, creating a possible FDIC take over.

At the very end of this debacle sits the FDIC.  The Full Faith and Credit of the United States of America that guarantees every dollar in every FDIC bank up to 100,000.00.  Of course, like AIG - the FDIC has no where near the amount of available cash to actually cover a massive "run on the bank".  If such a "run" were to occur, the obligation of the FDIC would force the massive "printing of money" by the Treasury and a massive devaluation of the dollar.  In other words, apocalypse now.

That's where, we are rumored to be.  One step from a national "run on the bank" which can only be prevented by the American taxpayers stepping in and assuming the mortgage holders position on the debt which underlies a vast web of world wide investment. 

Will the "rescue" work?

Probably.  If by "working" one means avoiding a total collapse of the monetary system.  However, if one believes this will return inflated values to financial markets - not likely.

Was it necessary ?

Probably not.  But politics has a way of making crisis out of problems when the political climate is most favorable.  In any event - that is the stuff of another post.  For now, in summary:

-Congress pushed for high risk loans to be made.
-Lenders sold the loans back to Fannie Mae, Freddie Mac
-Fannie and Fredie aggregated and repackaged the the loans, then marketed them as high grade investment securities.
-Banks and  Investment banks bought the Fannie Mae securities, and often repackaged them further into various investment products.
-When loan defaults increased, housing prices dropped, decreasing the value of the loan securities, which by now permeated a vast world wide investment market.
- Congress & the Treasury Secretaty conjure up a "plan" that villanizes Wall Street, lionizes regulation, and socializes a vast segment of the US economy.

And this - they call a rescue.

 

The continued development of civilized society has seen many defineable stages.  In High School most of us learned of the "Ages" of civilization that roughly corresponded to periods of "hunter gatherers", "agrarian", "industrial", "information".  Humanity became civilized to more adequately meet the basic needs of survival.

Primitive settlements were located in close proximity to potable water supplies.    Similarly, early civilizations relied on wild game and foraging for edible plant material for food.  We all learned of this to be the "hunter-gatherer" period of civilization.

Over time, people learned how to store, transport, purify, and drill for ground water; making it possible to survive - even thrive in areas that did not have natural supplies of water.  LIkewise people learned to plant crops and raise livestock, making it possible to fulfill the human needs of food and water by cultivating supplies of water and food, rather than simply hunting and gathering them.

Civilized societies continued to grow as man gained the knowledge to excercise human dominion over the production of metals, and machines; leading eventually to the industrial and information age.  The advancement of society has, however, created a fudamental "need" that is no less critical to the continued existance of civilized man than food or water.  That is the need for abundant energy.

Early man could provide all the energy required for his existence by burning fire wood.  As industry required more energy man learned to burn coal, and harnes the kinetic energy of flowing water.  As energy demands grew larger, man learned to convert burned fuels into electricity and transport the energy over long distances.  Man also discovered the existence of crude oil, which could be rather easily refined into efficient clean burning energy.  Man even discovered he could obtain energy by splitting the atom of nuclear fissionable material.

For all the modernization of industry, and the advancements of technology, one must realize that in terms of energy - human civilization is still living in the "hunter - gatherer" period when it comes to energy.  In each of the instance of modern energy, be it coal, oil, nuclear, or even wind, and solar; people are searching out the naturally occuring sources of energy, capturing them, and then processing them into useable energy forms.  We have yet to enter the "agrarian age" of energy.

The possible exception to this is ethanol.  While ethanol represents a  cultivated source of energy, it has proven to be a faillure at this point, mostly because it requires almost equal amounts of energy to produce it as it produces.  None the less ethanol can be viewed as an early stage in the era of "Cultivating Energy."  It seems undeniably clear, that if human civilization is going to continue to prosper, it must learn to "Cultivate Energy" rather than simply hunt for and gather energy.

The prospect of energy cultivation is currently being actively perused by numerous private sector firms.  This form of "alternative energy" has gotten almost no media exposure and is rarely mentioned in the same breath as "solar" or wind" energy. 

A brief aside here. 

Solar and wind energy epitomize the concept of "hunter - gatherer" energy production - and they simply don't work.  The problem isn't in the energy, it's in the physics of energy storage.  Currently, we have no means of storing large quantities of electric energy.  Consequently, electric energy must be produced in a quantity to match the demand on the electric grid.  The necessity for smooth controllable electric power is essential to delivering dependable electric power.  Wind, CANNOT be predicted, and the sun doesn't shine at night.  (Is Duh really needed here?)  Therefore, until we can store power efficiently, these technologys are so much "dust in the wind".  Perhaps a mass storage breakthrough will take place - but the private sector has been vigorously persuing battery technology for 50 years - and we are no where close.

But back to cultivated energy . . .

A google search on the name Stephen Delcardayre will yield some interesting insights.  Mr. Delcardayre is a microbiologis / enzymologist at the University of British Columbia, Canada.  Among the many patent filings one will find 6 seperate patent applications that reference:

A beautiful summer morning in Austin Texas.  Bright sunshine, light breeze, only about 78 degrees on it's way to a late afternoon in the mid 90's.  Sitting at a traffic light atop the spiffy looking black Suzuki Katana 750, the casual observer wouldn't guess the helmeted rider to be a grey haired geezer.  One more traffic light and a quick left turn into the office would bring me back to the real world of running a construction company.  Damn, can't think of any reason to stretch out this ride.  At least the high price of gas had one benefit - rediscovering the enjoyment of motor cycles.

As a 19 year old college student, I bought my first motorcycle.  A used Honda 1970 cb-350.  It was a single cylinder motor with a brick like suspension and what seemed like wooden brakes.  Several of my friends also acquired motorcycles.  We spent a great deal of time honing our motorcycle skills.  We tried to get our underpowered flat framed bikes to wheelie - and we actually could get the front wheels to come up - a little - with a lot of effort.  Just the same, we all got pretty good at basic skills, and eventually our motorcycles felt more like extensions of ourselves rather than like vehicles.  We all came to some interesting conclusions.  One, although we were all college age males that enjoyed frequent weekend binge drinking - we all agreed unanimously that riding a motorcycle and drinking alcohol were totally incompatible.   We all agreed that "not even one" beer was acceptable.  All but one of us always wore a helmet.  Our favorite answer to the question why we wore helmets was to ask the questioner to, "as lightly as you can, scrape your forehead against the curb - then ask me again."

For several years I rode motorcycles as a primary source of transportation.  Funny, but motorcycling by choice is much more fun, than motorcycling by necessity.  I recall the frequently quick changing weather in Northeast Ohio in the fall and spring.  For those that haven't experienced it, riding at freeway speeds during light snowfall with only a light jacket and gloves is excruciatingly painful.  After graduating, motorcycling became a secondary interest, then at about 32, I sold what was my third motorcycle, and didn't look for a replacement.  I thought I was through with motorcycles, and after about 50,000 miles, I'd never crashed.  Not bad.

For the next 15 years I rarely thought about motorcycles.  Perhaps a fleeting thought in the spring when I saw a two wheeler carving a hill country road, but other than that, I was a confirmed "cager."  It's probably worth while mentioning that the skills required to survive riding a motorcycle transfer to driving a car.  Over the following 20 years I've driven more than a million miles without an auto accident.  There are several times that I remember stopping, swerving, or therwise avoiding collisions because of the driving habits I developed as a "biker."

Then came Katrina.  Gas went from $1.50 to $3.00 a gallon over night.  It seems that within weeks the streets of Austin Texas were crowded with odd looking motorized two wheel contraptions called "scooters."  The prevelance of these scooters, and $3.00 gas piqued my curiosity.  I checked out the local Vespa  dealer.  The sales rep explained that they were got over 60 miles per gallon, and were easy to drive.  Then he showed me a model that retailed for about $4,000 bucks and had a top speed of around 40 mph.

I thought, gee - I know I can get a decent used motorcycle for under 2k, and it will sure go faster than 40 mph.  Having done a good deal of street riding in the past, I couldn't imagine being in traffic, on two wheels, and not having the power and acceleration to escape close calls with cars and trucks.  At that moment, I became a biker again.  Within hours I was on Ebay looking for the best deals.

Found an 10 year old Kawasaki Vulcan that had some minor mechanical issues for under $1,000.00.  After a new battery, plugs, and some carb work, the Vulcan ran like a champ.  On the first ride I was immediately surprised by the smooth shifting, the great suspension, and the increased throttle response, compared to the old standards I used to ride.  It was great to ride again.  With a helmet on, I was 19 again.

After riding for a several months, I noticed that many people were now riding "sport bikes."  Sometimes called "crotch rockets", they have an aggresive forward riding position.  The rider appears to almost lay across the gas tank, it looks terribly uncomfortable.  I couldn't help noticing that sport riders seemed to have a lot of fun.  Also, they mostly looked much more athletic.  I became curious, and eventually bought the 750 Katana. 

First ride on the Katana was amazing.  Keep in mind this is a fairly mild and modest sport bike by current standards.  At about 90 horse power, it has a top speed of around 135 mph.  The riding position was amazingly comfortable, the agility of the bike and its acceleration were fantastic.  The bike turned with the slightest of pressure and the throttle response was immediate.  On top of that, the fully faired wind protection made it almost immune to wind blasts.  In about 5 months I rode the Katana about 4,000 miles. 

It was great.   Gas was now at almost $4 a gallon.  No big deal.  The Katana averaged about 44 mpg and was a blast to ride.  Having fun, saving money, and curing global warming  - could it get any better?

Then came that fateful morning which started this way too long blog post.

The light changed from red to green.  Two cars ahead of me in the left lane of a 5 lane (middle turning lane) city street, two blocks from my office.  The first car takes off and shifts to the right lane, the car in front of me changes to the "turning lane" to the left.  Suddenly, an elderly man leaving the post office pulls out perpendicular to traffic and stops blocking both the turning lane and my lane of travel.  With only about 50 feet between me and the car, my only option was to brake hard.

Not good, brakes locked, skidded on two locked tires into the side of the car sitting perpendicular to traffic.  Becoming a great example of Newtons laws of motion, the Katana stopped immediately.  I, however, continued my forward motion without the slightest slow down, I was launched airborn over the car landing about 20 feet beyond the impact, and sliding another 50 feet or so along the asphalt until coming to a stop.  Lying face up in the street, I opened my eyes to see a deep blue Texas sky rather than St. Peter.  Every bone in my body hurt, but as I mentally inventoried my limbs, torso, and head, I found no breaks in either skin or bone.  Daze, I got to my feet, took off my helmet, and heard the words of a motorist that had stopped to render aid:

"Are you ok ?"  He asked as he simutaneously dialed 911 on his cell phone.

"I think so" I answered in a bit of a surprised tone.

Thanks to a good helmet, a good Joe Rocket armored jacket, decent boots, and good gloves - not to mention my own dedication to physical conditioning, I had several deep bruises - but no major injuries.

Unfortunately, many people have made similar decisions when faced with high gas prices or concerns about the environment.  Sales of scooters, motorcycles, and very small cars have risen dramatically in the past 6 months.  All of these vehicles are gas and environmentally friendly, but are significantly more dangerous than traditional autos.  Many new motorcyclists are over 40 and have no prior experience.  Many are physically out of shape.  Lacking developed skills and conditioning, many of these people will needlessly die violent tragic deaths due to our lack of a coherent energy policy, and the foolish preoccupation with global warming.

Last month, a middle aged Austin resident proudly completed the Motorcycle Safety Foundation course, bought a new Honda, bragged of his upcoming savings of gas and the environment, and died in a crash on Interstate 35.

Two days ago, Professor Miles Coburn of John Carroll University, was killed while riding his bicycle on a State Highway in Ohio.  Dr. Coburn was an strong believer in man made Global Warming.  It often lectured and argued the evils of carbon emissions to his students and colleagues.  He habitually rode his bicycle 50 to 100 miles a week for the benefit of the planet.  He too, is now dead.

The "Peace at any Price" crowd has often chanted, "No blood for oil !" 

The question, however that the peaceniks need to answer is:

How much more blood must we spill due to the lack of oil ?