Archive for the 'economy' Category

When The Money’s Gone

Now that nobody believes in our faith-based economy anymore, we’re out of pretend trillions!  No use trying to figure out what’s wrong, we can just drown this bear market in more fake money!

This is obviously working, since the Dow Jones was up today.  Do you believe again yet?  Try harder.

Some countries in the EU are lobbying to back off their climate goals with the financial crisis as an excuse.  Not that they’ve really been meeting these goals before the crisis, but hey, now they need to buckle down and make all that money back.  We don’t have time for the environment.

The response to this financial crisis is like a bad dream.  I’m hoping I can wake up and get back to a sober, reality-based reality if I just yell at the news hard enough.

At least some people are thinking about ways to rebuild this whole rotten system.  Check out the Huffpost interview with Van Jones, green jobs advocate and new author.  His arguments make so much sense, it’s like I actually get to wake up when I’m reading him.  Then, dig this bit on natural vs. financial capital, and how putting real value on natural resources could reshape the world economy.  Feel better?  I do.

Not enough to turn the nightmare off yet, but we won’t ever leave this crisis if we don’t remake our finances to reflect our role on this planet.  Suggestions welcome.

What I Haven’t Been Writing About

It’s more than all this of course, but here’s the backlog of links I didn’t get you this week.

NPR did a story on how the Post Office research center is looking at alternative fuel, efficient routes, green buildings, and new packaging to reduce their costs and environmental impact. You can read the report or listen to the segment at that link.

Nancy Pelosi is putting climate change legislation on hold until we have a new President- specifically, Obama. She answers questions on the decision and talks about climate change policy with the Huffington Post in a video here.

A club in the UK has a dance floor that generates power.  Rock on.

Remember the mean speculators, behaving rationally and legally inside the market system and driving up our oil prices and making us all sad?  They don’t exist.  Oil’s expensive for “real” market reasons and speculators are having little to no impact on it’s soaring prices, according to a task force combining data from a bunch of US financial agencies.  Well, shoot, now we have to place the blame for gas prices where it really lies- with ourselves, our oil subsidies, our poorly planned neighborhoods, our eggs in one basket…whoops.

US Olympians are prepared for the smog conditions in Beijing during the Olympics, but they’re not too worried about it- everyone has to breathe the same foul air, after all.  Meanwhile, China has begun restricting activities in the city to bring air pollution down to non-embarrassing levels for the Games.

What was I up to in the meanwhile?  Well, the liquor store people are getting to know me pretty well, since I’m there asking for boxes all the time.  Also, I saw Dr. Horrible’s Sing-Along Blog like 4 times, and you’d love it.  Odd and illuminating watching that superhero tale the same week as The Dark Knight, which was fantastically crafted (yeah yeah, Heath Ledger incredible wow, but Aaron Eckhart gave the performance of his career, too) and somehow not as scary as this.

Candidates and Fuel

Recently, both candidates have said and done and been observed doing plenty of things that illuminate their positions on energy, the environment, the economy.  Mostly they say it’s about the economy and energy.  They’re not talking so much about the environment- except, on McCain’s end, slightly ironically, from what I can tell-  but they are revealing themselves.

(ew.)

So here’s the summation:

McCain is for offshore drilling so we can have plenty of cheap oil, auto efficiency standards so we don’t need oil, a gas tax holiday so we can afford all the gas-made-from-oil we like, and a 300 million dollar prize to whomever invents a totally sweet car battery to make our oily cars obsolete.

Barack Obama is aok with corn ethanol and would like some switch grass work to be done, supports a windfall tax on oil companies, and wants to close loopholes that may allow speculators to push up the cost of oil beyond where supply and demand would have it.

McCain opposes the windfall profits (as do I: why not just stop subsidizing oil companies already?), and Obama thinks offshore oil drilling is ridiculous (as do I, and the Bush’s Energy Information Administration, and most people who are well versed in oil markets, regardless of who they’re voting for).  And as for McCain’s 300 million prize, well, the conservative National Review likes the concept of giving people who invent things government money but hates everything else McCain does for the environment, and the liberal Climate Progress points out some pretty glaring flaws in the actual idea.  So take your pick.

I’m not entirely happy with Obama’s energy and environment positions.  Sure, by all means, close speculator loopholes.  But corn ethanol is a beastly subsidy, and we can do better in both fuel production and food markets by ending it.  Still, good on him for opposing foolhardy drilling measures despite political “expediency”, and not pandering to the public by promising cheaper gas.  Now, let’s hear more, Senator O.

As for McCain, well.  He sure is talking a lot about this, but when is he going to make up his mind on whether we need to use more oil or less oil?  You can’t, in one sane, honest mind, espouse reductions in greenhouse gases, and at the same time promise cheap oil for everybody.  With all the double-talk, he’s managed to alienate both his conservative supporters and the environmentalists he wants to give him a chance.

Sack Race Regulation

Speaking of relay races… last year about this time, the courts pointed out that the EPA had a duty to regulate greenhouse gas emissions, since they’re pollution, and hurt the environment, and allegedly the EPA is all about environmental protection or whatever.

The EPA promised to get back to the American people on that by the end of 2007, but we got nothing. Last week, a coagulation of groups and places (including Baltimore City, the state of Maryland, and Washington DC) filed a lawsuit against the EPA, seeking their proposed emissions limits, or really just any indication that the EPA is doing it’s job.

Meanwhile, some members of the House said it’d be silly to let the EPA write the laws, since they’d just get sued by anti-regulations types if they did. Instead, they think that legislators should pass some emissions laws, post-haste.

And today, rumors surfaced of a White House plan to control greenhouse gas emissions– maybe to be presented to the legislature by the end of the week (maybe take some people’s minds off that Colombia FTA, oof).

Well well.  Let’s start with the White House.  It’s not April Fool’s (I checked), and I don’t think it’s opposite day, so they might actually be serious.  Conventional wisdom has it (see resigned comments in other articles) that as long as Bush was in office, greenhouse gases would roll freely along.  Bush has proven himself to lack all sorts of foresight- has he just now caught up with the rest of the world?

Then the legislature.  After the biofuels silliness, will we really be so strapped as to ask our more posturing politicians to make coherent and helpful rules based on good science and a basic understanding of the economy?  Sends chills down my spine, that’s what.

But the bureaucrats, the ones who have the experience in drafting regulations, and the capacity to understand the research, and who had a great reputation for cleaning up America, will they even pay attention?

So, I can’t fathom that the president really has a plan (and even so it might go through the legislature), I don’t trust the legislature to get this right, and the bureaucrats are no-shows.

Regulation of greenhouse gases is the first, most basic step in tying pollution to a cost in the market.  If we assign pollution no cost, the market will never “correct itself” to stop destroying the ecosystem we know how to live in.  If we assign it the wrong cost, free marketeers will get to whine about interventionism, and the market will do insane things and freak everybody else out (see biofuels and food, rising costs of).

With these bozos vying (or not) for the chance at the prize, I don’t see a way for anyone to win.  They’re just thrashing around on the field, trying to figure out how to stand up.

Changes?

We drove less last year than in 2006- it was the first time in 20 years that we drove less. Granted, we only drove .4% less, and we still drove 3 trillion miles. 3 trillion! But hey, the budget deficit is still 9 trillion dollars, so at least it’s not the biggest Crazy Staggeringly Huge Statistic That Worries Me.

So it looks like fuel prices are changing the ways America behaves, right? Slowly, but it’s happening. BusinessWeek reported a couple weeks ago that consumers are buying more efficent cars (especially the cheaper ones), SUV and big truck sales are dropping, and we’re taking more public transportation. But they ask a pretty good question- if prices for fuel go down, will we stop being efficient and go back to our old ways? That’s exactly what happened after the last energy crisis in the 70s. For those of us who do the energy efficiency thing for reasons other than cost, no. But how many of the people economizing are doing it because they have to, and are just waiting for $2.50 gas to come back so they can buy that Escalade? (Are Escalades still cool?) Or is this a national shift- will the green wave make it past the breakers of the economic crisis and drift lazily onto the sunny shores of a new consumer paradigm?

Also, if consumers are buying more efficient cars and not buying trucks and SUVs so much, why are car companies still saying they have “no idea” if consumers even want more efficient cars? And more importantly, why does BusinessWeek publish articles wherein car company executives whine about the CAFE standards and this supposed lack of consumer interest, with no attempt at investigation of consumer interests (or even perusal of their own archives)? That article has some interesting analysis of how the car companies are dealing with CAFE, actually, but man, it irks me that auto executives use that tired “nobody wants efficient cars” refrain.

They’re Asking For It

One of the most popular arguments against government “intervention” in alternative energies and the green economy is that government regulations are always inefficient, they slow the natural progress of the economy, markets work best when they’re totally unfettered, etc. Stuff like that. The jatropha-in-Myanmar post a couple of days ago might even lend that argument some support.

But the capitalism-loving, -touching, and -squeezing heads of huge companies like BP, GE, and Dow Chemical disagree- they’re urging the government to come up with a coherent energy policy that favors energy efficiency, clean fuels, and even carbon taxes. They contend that the piecemeal regulations the Bush administration half-heartedly doles out are costing America jobs, and US companies the chance to compete internationally. Apparently, since European countries tend to take alternative energies like nuclear and wind seriously, their governments have created favorable investment climates around those technologies- and the clean tech money is settling abroad.

GE’s Chief Executive Jeff Immelt makes a case for government subsidies, carbon trading, and investments in clean technology from a purely business standpoint- and to the free-market crowd, he has a response. From the WSJ’s “Environmental Capitol” blog:

And government largess helps drive progress—like in GE’s aircraft engine division half a century ago. That admission riled free-market types in the audience (and on stage) who took him to task for subsidy-hunting and accused him of—gasp—betraying his capitalist credentials.

“Don’t worship false idols,” he countered. “The government has its hand in every industry. If we have to have them, I’d prefer they were productive rather than destructive.”

Defending the “free” market is quixotic in the most literary sense, as the pure market is the pure Dulcinea: entirely a product of fevered imaginations. I’ve ranted about it here before, but observe that very successful capitalists realize this, and gamely play the market (and government) by the existing rules. There’s money to be made in clean technology (even capitalists who think global warming is a fraud know this and invest accordingly), and there would be even more of it if the US government stopped noodling around.

Last month, BusinessWeek reported on how the Bush Administration’s failure to lead on clean energy policies has left it to the states to invent their own. The magazine pointed out that a sustained federal push was essential for bringing the US up to speed in a clean tech economy already dominated by foreign companies- but not to hope for that push from Mr. Bush.

Maybe next year your dreams will come true, practical capitalists.

A New Zeitgeist?

Two articles in two very different publications popped up in my feed yesterday, but they both called a new “trend”: People are buying less stuff. The New York Times pegs this novel plan to budget for purchases as the result of the whole subprime crisis and massive credit card debts. BusinessWeek ties it to customers shopping “greener”, then to subprime fallout, then finally to how this new thriftiness could tank the economy just when the President and Congress want to urge consumer spending to get us through the recession we may or may not be in.

A subtext in each article also pointed to fewer people trying to consume conspicuously- sales of the mid-tier luxury goods are falling,  and people say they care less about the labels on their clothes. (On a side note, I found this article on why people consume things loudly in the first place pretty fascinating.)

So that’s a thing.  Are people really buying less?  Are we buying less because we’re more concerned about the effect of our consumption on the planet?  Or are we buying less because we’re more concerned about the effect of our consumption on our pockets?  Is our economy’s burp going to propel consumers down the path to more thoughtful spending on resources?  Will any of these “trends” last past the recession?

*In solemn news anchor tone* One thing is for sure: only time will tell.


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