Audio Clips

20 November 2008

Detroit's Whore

Most of you are under the mistaken assumption that the money you receive in your paycheck is actually yours. In case you are still stupid enough to believe that, this congressman will disabuse you of that notion (starting at :24 in the clip). You receive your paycheck only at the pleasure of the Congress. And don't you forget it.



19 November 2008

Power to Save the World

One of the largest problems facing us over the next several decades is meeting the growing demand for energy without bankrupting ourselves with the costs. I have absolutely no problem in principle with solar and wind energy. They are exciting alternatives that may eventually be able to produce the energy we need. As it stands right now though both of those alternatives are quite expensive. We do, however, have an alternative energy that we have been using for decades with great success: nuclear.

Journalist William Tucker has been investigating nuclear (or as he calls it, terrestrial) energy and shares several insights that seem to be lacking in the debate. Several of those insights relate to challenges faced by the alternatives: hydroelectric is about maxed out because the best dams have already been built, solar requires enormous land areas, wind is fickle and one turbine the height of the Trump Tower creates only 1/200th the electricity of a normal power plant. So while these alternatives may certainly provide greater potential in the future as we invariably apply our ingenuity to the problem, they certainly won't meet the needs of the next 20 or even 50 years because of the time and resources it will take to bring them online in a meaningful enough way to be noticeable. Nuclear, however, provides the electricity we need while being familiar and advanced enough for us to bring meaningful amounts of energy online over the next 20 years.

The term "nuclear" could practically be a Rorschach test. Most people envision mushroom clouds and the destruction of Hiroshima and Nagasaki. Because of that, one of the most vocal proponents of nuclear energy may surprise you. Patrick Moore was one of the co-founders of Greenpeace and now finds himself at odds with many of his former compatriots because of his position on nuclear energy. He argues that nuclear has the ability to replace the majority of our fossil fuel base load energy production while having the added benefit of reducing the greenhouse emissions that concern environmental activists. And it's not a new or untried technology. Nuclear power is the source of 20% of our electricity needs and it has been powering our navy for decades. Its cost is roughly $.02 per kilowatt-hour which is comparable to coal and hydroelectric so we could bring plants online without seeing material changes to our power costs. The same could not be said of solar or wind power.

Of course, the most pressing concerns that people have are related to the radioactivity of the waste. There are several things that people should keep in mind when they consider this. First of all, the process that the radioactive material goes through as it sloughs off particles in order to balance out the number of neutrons eventually leads it to become a series of elements until it finally stabilizes as lead. (For a thorough and fascinating discussion on nuclear power and it's safety go to your library and check out "Power to Save the World" by Gwyneth Cravens) Within the first 40 years the material has only one-one thousandth the potency and radioactivity as it started with. We have the capacity to deal with this material. Particularly since we have changed the laws involved with what we classify as nuclear waste.

Years ago, the United States classified every by-product of the nuclear process as nuclear waste. This is ridiculous since a significant amount of potential energy is still in the rods after the first cycle. France, who leads the world in nuclear energy advances, recognized that about 98 percent of the by-product of the first cycle could be reused. As such, they recycle that 98 percent of the material for further use. France, after decades of nuclear production, has been able to limit their waste to fit into a single room in Le Havre. The United States has since changed the law and legalized the recycling of materials which will substantially reduce the difficulties that faced us in dealing with the waste. It can be easily and safely stored in the Yucca Mountains.

One of the other major concerns comes from the nuclear power plant failure of Chernobyl and Three Mile Island. These two isolated circumstances are, in the case of Chernobyl, illustrative of the differences in technology and in the case of Three Mile Island illustrative of the success of American nuclear technology. Chernobyl was far and away one of the worst ecological and human disaster in human history. And yet, it was largely a result of incompetence in construction and management. Chernobyl was built without a concrete structure around the reactor, a safety feature that does exist in the American plants. In addition, the Soviets were using materials that are not used in America that actually helped to facilitate the chain reaction that occurred. Chernobyl is so different in style and structure from our plants that it is not helpful in comparison but rather in contrast.

Three Mile Island on the other hand was an unmitigated success. It proved that our systems worked. No one, worker or neighboring inhabitant, was killed or even made sick by the meltdown at Three Mile Island. The fail-safes worked and contained all the damage within a concrete barrier. The scare at Three Mile Island was exacerbated by the coincident release of Jane Fonda's movie "The China Syndrome". It came together and created a maelstrom of misinformation and mistrust that resulted in the complete cessation of nuclear power plant construction in this country.

No energy source is without advantages and disadvantages, but a reasoned debate in solving our country's energy issues should include a full and complete look at an energy source that has served us well without costing us a fortune or causing harm to our health. If we take the time to think things through rather than oppose nuclear energy in a knee-jerk fashion, I think we will find an intriguing solution to our problems.

15 November 2008

Hobgoblins and the Automotive Industry

I'm currently reading a biography of H.L. Mencken who was a political writer in the first part of the 20th century. He was a very perceptive chronicler of politics in America. One of my favorite Mencken quotes describes very well the current economic situation:
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with and endless series of hobgoblins, all of them imaginary.
I believe that the automotive industry, through their lobbyists and campaign donations, are now providing politicians with yet another hobgoblin to frighten the populace. This hobgoblin, like others Mencken described, is imaginary.

The argument put forward is that if the American taxpayer doesn't pull out their wallet and fork over some money then the automotive industry in America will disappear and cause untold damage to the economy. This is the worst sort of blackmail and there are several flaws with their argument not the least of which is that GM, Ford and Chrysler no longer represent the sum total of the automotive industry in the United States. Over the past 20 years several foreign auto makers have set up factories here in the U.S. and now employ tens of thousands of people directly and tens of thousands more indirectly via their suppliers.

The argument goes along these lines: GM, Ford and Chrysler will undoubtedly fail unless they are given billions more in money from the taxpayer. If they fail then hundreds of thousands of people will lose jobs as the effect ripples through their suppliers and the businesses that supply the suppliers and so on. The problem with this is that it assumes that upon a liquidation of the assets, buyers who purchase the factories and all other assets will allow those assets to lie fallow. That is a ludicrous argument. There are plenty of investors who would be interested in purchasing those assets and putting them to work for the right price. They would only be kept from doing that by the government taking money from taxpayers and subsidizing these failing companies.

The bankruptcy process is valuable to our economic system because it puts assets in the hands of parties who have the capital and means to employ those assets more efficiently. GM, Ford and Chrysler have proven themselves incapable of employing those assets efficiently. For what possible reason would we give them money if they are unable to convince investors to give them more money?

10 November 2008

The Tooth Fairy Is Going to Pay a Fortune for My Dentures

In a sign of mass-delusion, one-half of homeowners polled told Zillow.com that they believe that their house has either increased in value or stayed the same. That's fascinating because it seems that it has been inescapable in the news for about 2 years now that the real estate market is hurting. I'm fascinated by Behavioral Finance and this is a great example of the disconnect that can happen when our money is involved. We all fall prey to these fallacies which is why I find it so interesting. How can it be that rational human beings can make these mistakes. Fascinating subject.

I love the line in the article about homeowners getting so attached to their homes that when a realtor gives them a realistic asking price it's like the realtor saying that the seller's kids are ugly. Ha ha ha! Not my kids though. They're above average. Just like everyone else.

You'll Pardon Me if I Ask For a Second Opinion

I'm reading a Business Week article about energy policy and Jigar Shah, founder of Sunedison, a solar company, recommends that the government be the example. He asserts that

if the government led by example and made its own buildings greener, thousands of jobs would be created, and "the net cost could be zero, because it will save so much energy."

This reminds me of T. Boone Pickens recently finding religion in the wind energy sector and evangelizing the benefits of wind energy. Oh, and by the way, Pickens just happens to own large investments in the wind energy sector.

Listen, maybe solar or wind is the way to go, but I think I'll look to other sources also to try and get an understanding of the best options. I don't go to the Ford dealer and ask which make of car I should get and expect him to say "Toyota". We shouldn't expect that someone in the solar industry is going to give us an unbiased opinion on energy policy either.