Tuesday, March 31, 2009

Congress should support the President's budget...

For the first time that I can remember we have a budget proposal that prioritizes the health and prosperity of the majority of our population. It provides for the basic, long-term necessities of a viable nation instead of catering to the selfish, shortsighted demands of manipulative industry groups.

It emphasizes medical care at a reasonable cost that doesn't hold individuals hostage to jobs or locations they would be better off leaving because they are afflicted with a pre-existing condition, a cause for denial of coverage elsewhere. Nor will the President's budget extort businesses with ever escalating costs. It puts patients ahead of profits and removes the incentives for unnecessary diagnostics and drugs. It will control costs through bargaining leverage over hospitals, diagnostic labs, and pharmaceutical companies; and with the education and preventive care that for-profit private insurers dismiss because while such measures offer long-term return on investment, they cut into short-term profits. And it will cut costs through electronic recordkeeping, something that more cost conscious businesses, like airlines, car-rental agencies, and hotels, did a long time ago, but the medical industry lagged because they seem to prefer the resistance to scrutiny that muddled paper records provide.

It emphasizes energy policy that will foster a burgeoning industry to create clean electricity generating capacity without destroying our remaining pristine landscapes. If we are smart about it, we could put millions of people to work building the machines that will harness abundant solar energy and implementing energy efficiency retrofits to our homes and commercial buildings. Such retrofits will eliminate the shameful and expensive waste that we have tolerated for so long and eliminate the necessity to build coal-fired power plants. Many efficiency estimates indicate we could reduce energy consumption in our homes and commercial buildings by more than 60% at lower cost than building new power plants to meet demand that will otherwise grow. And the budget provides a long overdue cap-and-trade pricing mechanism for costly and destructive greenhouse gas emissions that will impose on energy providers the true cost of their negligence if they decline to invest in clean alternatives.

And it emphasizes education. Without a good, old-fashioned education -- my eighty year old mother can whip me on a geography or grammar quiz any day -- without the ability to perform basic reading, writing and arithmetic skills, our population will slip into a dark malaise of incompetence and declining productivity. We will witness a Dark Age in our own time. How about a Renaissance instead? How about an American Age of Enlightenment? It's within our grasp, but not if we don't avidly read history to avoid repeating our mistakes, appreciate the importance of science and admire its practitioners, and find inspiration in the legacy of fine art that our planet's civilizations have sacrificed so much to bequeath us. We don't all need PhD's, but we all can share the power of knowledge and enlightenment if we take the trouble and expense to educate our children and show them the potential that's only a book or two (or Internet click) away.

The President's opposition will tell you that this budget is a tax and spend boondoggle. That it will generate intolerable, crushing debt. But they didn't talk about debt when the prior administration passed Medicare Part D for prescription drugs, a debt inflating welfare program for pharmaceutical companies and boondoggle if ever there was one. And the opposition didn't worry about crushing debt when they inflated the defense budget with useless weapons systems that did nothing to protect our soldiers overseas but made the politicians' campaign contributors very happy. And they didn't tell you when they passed a tax cut that benefited an affluent minority that our national debt would skyrocket to unprecedented levels (along with their campaign coffers and revolving door job offers).

Well, there is a solution for the debt: we ask the affluent to acknowledge the sacrifices of our less prosperous citizens who provided the secure, fertile environment and the generous opportunities from which they have profited almost exclusively for the last twenty-five years. We ask them to give with the same enthusiasm as they take. We ask them to pay more taxes. Oliver Wendell Holmes said that taxes are the price we pay for a civilized society. And the times of broadest prosperity in this country have been when our income taxes were highest:

"By 1936 the lowest tax rate had reached 4 percent and the top rate was up to 79 percent. ... Even before the United States entered the Second World War, increasing defense spending and the need for monies to support the opponents of Axis aggression led to the passage in 1940 of two tax laws that increased individual and corporate taxes, which were followed by another tax hike in 1941. By the end of the war the nature of the income tax had been fundamentally altered. Reductions in exemption levels meant that taxpayers with taxable incomes of only $500 faced a bottom tax rate of 23 percent, while taxpayers with incomes over $1 million faced a top rate of 94 percent. ... the maximum tax rate in 1954 remained at 87 percent of taxable income. ... The Economic Recovery Tax Act of 1981, which enjoyed strong bi-partisan support in the Congress, represented a fundamental shift in the course of federal income tax policy. Championed in principle for many years by then-Congressman Jack Kemp (R-NY) and then-Senator Bill Roth (R- DE), it featured a 25 percent reduction in individual tax brackets, phased in over 3 years, and indexed for inflation thereafter. This brought the top tax bracket down to 50 percent. ... the Tax Reform Act of 1986, which brought the top statutory tax rate down from 50 percent to 28 percent while the corporate tax rate was reduced from 50 percent to 35 percent." (History of the U.S. Tax System)

So, contrary to what the President's shrill opposition would have you believe, the country can survive higher taxes. And it's notable that following Reagan's tax cuts we slipped into a deep recession which, to cover yawning budget gaps, he and his successor retreated from the "trickle down theory" with tax increases -- back up to around 40%. It's also notable that at about the same time as taxes were cut by Reagan, wealth became increasingly concentrated in the top few percentiles of the population while real wages of the middle class were flat or declining.
President Obama is offering vision and leadership that can and will put us right, but only if we find the faith and the courage to accept the bitter medicine that's required to cure our ills. In the end, the affluent may be humbled a bit, but the vast majority will be proud of what this nation can accomplish if we reject false promises and stand up to empty rhetoric. We (the people) can do this, but we all must speak up. Your congressmen will listen if you tell them in no uncertain terms what you expect. Contact your representative now: Congress.org

Monday, March 30, 2009

Give the Big Three A Break

Give the Big Three A Break

I happen to have the good fortune of being a homeowner in the Detroit suburbs and former employee of an automotive supplier. I quit that job four years ago disgusted by the hyper-conservative (by conservative I mean eager to preserve the status quo, not necessarily politically conservative), hyper-cautious, cowardly decision-making practices that inevitably prevail (I managed a small electronics engineering group). Automakers always want to stick with whatever makes money today, and never want to take a chance on what might be profitable tomorrow. And they are relentlessly (mindlessly?) focused on cutting production costs at the expense of investing in innovation. I had smart, hard-working engineers in my group who were eager to attack tough problems. But they hardly ever got the chance because my bosses just wanted to wring every dollar they could out of the products we already had and offer nothing new even when our customers (Ford, GM, Chrysler, Audi, VW, etc.) specifically asked for it. We perpetually tried to re-sell the customer a product that wasn't up to the customer's demands by repackaging and "repositioning" it -- that is telling the customer the product was something it wasn't. So we spent a lot of time tweaking superficial details instead of getting in front of the real problem that confronted us: an aging product line.

A lot of smart talent was wasted because it was underutilized even when we had the money to act. Now the money is gone, and most of the talent that could leave did. What's left are those that couldn't get out (not necessarily because they're incompetent, though some are, but perhaps their families are settled here and they didn't want to bail on the devil they knew in exchange for one elsewhere they didn't know; or maybe their homes are "underwater" and moving is no longer an option).

I remember visits to the assembly lines where our products were used, and sometimes failed. I would accompany engineers on troubleshooting missions. The people I encountered on the assembly lines worked hard -- physically hard -- often in a noisy, rank environment. Many were older than I, and looked a lot more tired. But they were always eager to help us geek engineers get our product working, even if it meant added work and inconvenience for them. And they didn't do it because someone told them to. They smiled and offered to help, and they offered useful suggestions for how to make the product better and in turn improve the quality of their product. They care about what rolls off the line, I have no doubt about that. They earn their pay, and they earn the profits that pay much larger salaries to others, too. Standing next to a cacophonous testing bay where cars slid every thirty seconds onto rollers and were accelerated to 70 m.p.h., surrounded by eye-watering smoke from burning rubber, I realized pretty soon where the money came from for my cushy salary. The line workers always knew it, yet they never seemed to make that an issue, they just wanted to keep working. (And this wasn't considered a tough place to work, try slamming heavy, unwieldy dashboard assemblies into place all day.)

So, while my group spun its wheels making cosmetic changes on an outdated product, and assembly line workers busted their humps three shifts a day, management followed the quick buck doing the same thing my engineering group did: repackage and reposition. They produced the gas guzzling SUV's that indulgent consumers awash in credit demanded. There never seemed to be a plan for what to do if gas prices suddenly spiked and consumers decided they preferred something less profligate. And we all knew gas prices would spike.

And then gas prices did spike and I thought, "Hallelujah!" Detroit's finally going to start selling their little cars. And there was a brief blast of enthusiasm for them. Until the economic crisis kicked in and sales dropped 30%, 40%, 50% compared to just a year ago (WSJ: Auto Sales).

Well, the assembly line workers didn't induce the economic crisis; neither did the engineers. Sure, the Big Three would have been in trouble if gas prices remained high, but they would have bumbled their way along as they always have. They would have contracted, as they have been for years, but they wouldn't have gone over a cliff. It was not the Big Three that suddenly did themselves in (although executive incompetence was slowly dragging them down) it was a bunch of criminally greedy bankers and securities traders that sent us all over a cliff. But the criminally greedy bankers are not the ones crashing on the rocks. And to add further insult to injury, unions -- the only thing that ever moved working stiff living standards in a positive direction -- are being demonized. In the past, union wages might have gotten out of hand for some workers who could rack up a lot of overtime, but those are exceptions, and management -- hungry for for quick profits -- often made incremental wage concessions to unions while at the same time outsourcing thousands of their jobs (see UAW Timeline). Pensions got out of hand because management and politicians (bankrolled by management) wouldn't support Walter P. Reuther's plan to consolidate and nationalize pensions so younger workers would subsidize older ones. I agree union negotiators sometimes overreached, but it was while they watched executives overreach several orders of magnitude more severely. Still, unions are not, and never were the problem with American industry. It's greedy incompetent, lazy, parasitic executives that sold us out for a quick buck and brought American hope for future prosperity to its knees.

Saturday, March 28, 2009

A Big, Fat Blast of Hot Air

In his article in the The Weekly Standard,
"A Big, Fat Failure: Obama's budget makes a bad situation worse." (04/06/2009, Volume 014, Issue 28), Several of Matthew Continetti's assertions ring especially hollow and unsupported:

The president's vast new commitments in the areas of health care, energy, and education have already spooked small-government Republicans and the foreign investors who help finance America's public debt.

Who are the "small-government Republicans?" I don't think a “small-government Republican” has been detected at-large in the last forty years. Government and the debt associated with irresponsible spending grew under the last four Republican administrations. What does “spooked” mean? Do well-heeled Republicans fear their tax burden might actually increase to a level sufficient to cover the cost of the defense spending, farm-subsidies, Medicare prescription drugs (welfare for the pharmaceutical industry), nuclear-power subsidies, and Wall Street write-offs that “small-government Republicans” consistently insist upon?

And who are the foreign investors who are spooked enough to actually flee American treasury bonds? And would they not be equally spooked if we did nothing to stimulate the economy, educate our children, provide medical care to more than a privileged minority, rebuild our crumbling infrastructure, or take steps to curb the environmental impact of global warming?

Nor will Obama's resistance to free trade encourage economic recovery.

How so? I have yet to see a truly compelling argument for the un-regulated free trade that is so heartily endorsed by the business community. Free trade has done nothing for our economy but boost profits for corporations who, unable to competently manage their businesses on a level U.S. playing field, seek to exploit underpaid oversees workers in factories that offer little or no environmental protection; and little or no worker safety, healthcare and pension provisions. (Provisions hard fought by our unions who Republicans also find burdensome, and reliably seek to eviscerate.) Is that the “free trade” that is so beneficial to the average American? Still, to my disappointment, Mr. Obama’s administration is populated with supporters of “free trade” as we now know it, and Mr. Obama has shown little or no inclination to significantly impede “free trade” profiteers.

Absent the economic growth his budget will squelch, the only ways out of the fiscal hole Obama is digging are massive tax increases, defaults and devaluation, and inflation.

How will this budget impede economic growth? How does one define a “massive tax increase?” Reversion back to tax rates that prevailed during times of broad prosperity (the ‘90s? -- top tax rate 39.6%; the ‘60s -- top personal income tax rate: 91% (http://www.ustreas.gov/education/fact-sheets/taxes/ustax.shtml)) that fostered the well-being of a middle class? What defaults? Devaluation of what? And what evidence is there to suggest that inflation will become excessive, and what is excessive?

Empty, fear-mongering rhetoric gets us nowhere, which is where the last Republican administration so handily got us.

Friday, March 27, 2009

An Endless Parade of Energy Waves...

Ocean waves carry lots of watts waiting to be tapped.
Here's a practical application:

World's first wave farm now generating power for 1,500 homes

Tell me again why we're still burning coal and building nuclear reactors?

Sunday, March 15, 2009

Mr. Cheney is still drinking that crazy Kool-Aid...

In a NYT article today, 'Cheney Asserts Obama Has Raised Security Risks' Dick Cheney, under the camouflage of another gleeful death-by-a-thousand-cuts assault on President Obama, condemns the President's attempted resuscitation of our Constitution after the feckless and cowardly Cheney and his calamitous gang of merry pranksters profitably eviscerated it.

I assume Mr. Cheney, until his dying grimace, will continue to take cheap shots at President Obama. With absolutely nothing to call a political or military success of his own, or even an honorable try to his credit, the only avenue open to the sclerotic Mr. Cheney for padding his lamentable legacy is the overused Republican standby of cutting down the honorable efforts of others.

Mr. Cheney whined in self-defense: “I think those programs (Guantanamo detentions, waterboarding, military courts) were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11,” Mr. Cheney said of Bush administration policies, echoing statements he had made in an interview last month with Web site Politico. “I think that’s a great success story. It was done legally. It was done in accordance with our constitutional practices and principles.

Well, sure. What else could he say? That his policies (and they were his, not Bush's) were an abject failure, like everything else he undertook as President/Vice? That his policies were venal, and self-serving, and engendered hostility and hatred on a scale unheard of since the Roman Empire? That his policies put millions of dollars in the pockets of cronies through no-bid contracts while those policies cost the lives of thousands of American soldiers and hundreds of thousands of Iraqi and Afghan civilians?

No, he'll never be a stand up guy and admit he blew it. He'll just keep swinging at the very people who labor to clean up his mess while he sits on the sidelines and counts his money. Swing and a miss. Now, go away...Dick.

Sunday, March 8, 2009

Electricity Generation: Centralization vs. Decentralization

An interesting and well made argument against decentralization of electricity generation:
"Small is ugly if it means we keep burning coal
Big is beautiful if it breaks our dead-dinosaur addiction

Still, the writer doesn't say a lot about using a diverse combination of alternatives, which is where decentralization seems to come into its own. He sticks mostly with wind and photovoltaics, but that's probably because they are the most viable choices for quick delivery solutions. Also, it seems that if we reduce our household consumption substantially through efficiency gains, decentralization offers better opportunities for lower cost production and reliability (see below: "Renewables: Intermittency & Reliability," or possibly more to the point and more convincing: "Mighty Mice"). But that still leaves commercial consumption (for which co-generation offers benefits -- see below).

It will be a while before the decentralization vs. centralization clamor dies down. In the meantime, let's do both, centralized and de-centralized renewables -- they're by no means incompatible.

Energy in the 2009 Stimulus Plan

Here's a concise rundown of the energy provisions in the Obama Administrations economic stimulus plan from the NY Times editors: "An $80 Billion Start"

What a refreshing revelation after the previous administration. Even if 50% of this money is spent efficiently, it's a giant leap forward in energy policy for the U.S., and the other 50% can be counted as penance for doing nothing innovative (at the federal level) these last fifty years. Cheers for President Obama.

Still, it is a disappointment to see money in there for research of "clean coal" and carbon sequestration. Carbon sequestration -- snake oil if ever I saw it (tell me one thing we've buried in the ground that hasn't come back to haunt us).

Go Mass Transit

Let's upgrade our 20th century transportation system, clean up our air, shake off the shackles of foreign oil imports and create long-lasting, well-paid jobs building and maintaining an efficient, cheaper transportation network for people and freight.

"Transportation for America" is leading the charge to get this done:

Every six years, Congress sets the country's transportation and infrastructure priorities — allocating hundreds of billions of dollars for projects that shape our communities for generations. We need to raise our voices and make sure they use this moment to chart a new direction for our nation's transportation system.

Help us urge President Obama and Congress to create the world-leading, sustainable transportation system we so desperately need.

Join us in calling on Congress to take advantage of this extraordinary opportunity to create a 21st Century infrastructure and move our country in a bold new direction.

Learn more about our newly-released Campaign Platform for the Transportation Bill.

Related to the 2009 Transportaion Bill is the proposal to finance our overused roads and highways with a "Vehicle Miles Travelled" (VMT) tax which would replace the insufficient gasoline (18.4 cents/gallon) tax that now finances the Highway Trust Fund. Last year, the fund came up short, and Congress funneled in $8 billion to resuscitate it. As cars become more fuel efficient, revenues from this tax will continue to fall short. A better alternative, the VMT would tax drivers based on the number of miles driven (2 cents per mile). This tax would make drivers intimately conscious of the cost of driving, and disassociate highway funding from gasoline sales, and instead tie funding directly to road usage. Transportation Secretary Ray LaHood recently suggested that such a tax might be necessary (along with a temporary gas tax increase) and he was shot down by the White House Press Secretary Robert Gibbs.

One issue with VMT proposals, though: it doesn't reward drivers of more fuel-efficient vehicles (at least not that I'm aware of). I would slam non-commercial SUV drivers with a vehicle registration tax based on weight. Those drivers should at least pay a little more to compensate for the extra damage they do to roads, and the additional hazard they impose on other drivers when they crash.

If you think we need a better plan for transportation in the U.S., sign the "Transportation for America" petition to let Congress know you're paying attention.