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20. January 2009 by David A. Peterson.
Here we are Jan 20th just a few hours from the President-elects inauguration and his ascension into the highest office in the land. It’s estimated that 2 million people are standing on the national mall waiting for the hopeful event.
Hopes are high, and the problems facing our new President are even higher. I’m positive he will hit the ground running. Half of the country is worried about the direction the new President will take us but just about the entire country believes he will start his new journey at a full-paced run.
President Obama is in the race of his life. Modern life has made countries, counties, and cities all interdependent on one another. What happens in the
Here is a short review.
President Obama will have a lot of issues to dissect and decide however only one will define his term. My hope is that at the end of his 4 years he will be able to hang his hat on an airtight energy policy.
Our countries, counties, and cities are so interdependent on one another with the absolute link between them all being energy. Our non-renewable energy supplies that we currently consume are concentrated in countries with different values than ourselves. That is saying it nicely – really these energy producing countries actually hate us. Everyone from a middle school child to our incoming President realizes this dire situation that we are in concerning our current lack of a sustainable energy policy.
It doesn’t take much of a problem in the world for gas prices to rise to $4.00 gallon. Heating oil, diesel fuel, natural gas supplies, are all tied to world events. Not only world event affect our energy supplies; heck over the summer oil speculators ran up the bill without even actually touching a real barrel of oil.
Just this past week
So why should
The issue is that all of our non-renewable resources are tied up. “Drill baby, drill” is just a phrase it isn’t really happening. Coal and shale are available in abundance but are seen as destructive to the environment through the whole process. From digging those resources up to burning them in the power plants these forms of fuel have their detractors.
Natural gas is also available in abundance but we don’t have the distribution system or the ability to burn it in our country’s fleet of vehicles.
Then there is wind power, solar power, nuclear power, wave power, hydrogen power, fuel cells, hybrids, Ethanol, vegetable oil. There are countless other energy types being developed right at this moment.
Most of the above forms of energy are used to either power our vehicles or power the electrical grid. The push at this moment is the electrification of our country’s fleet. This will mean that we will need more electrical energy and a huge upgrade to our electrical grid that has already reached capacity in some parts of the country.
Take all of our non-renewal supplies; add in pollution, global warming, Green Peace, the Sierra Club, war, dictators, exploding populations, expanding commerce, cold weather, hot weather, weather in general, and stir it all together and poof you get our current energy policy. I wouldn’t call our current situation a policy more like a chicken with its head cut off.
What we really have when you stir it all together is a very fragile peace between all of the factors and factions. One rouge dictator, one small in change in China’s one child only policy, one thing we can’t foresee and $4/gallon gas will look cheap.
It only took one damaged pipeline due to Hurricane Ike to create gas lines in Atlanta in fall of 2008. In the 70’s it only took about 6 countries getting together to throw our entire way of life into turmoil yet here we are almost 40 years later with the same energy policy that we had in 1975.
President Obama is in the race of his life. Expectations for his Presidency are unbelievably high. I’m looking at 2 million people waiting on him to get sworn in. What will his legacy be? What will he try to tackle? There are so many problems that he could work on but what he should work on and try to tackle is a rock solid airtight energy policy before it is too late.
We are on borrowed time with our current policy. The race the President is running with our borrowed time has a finish line. Everyone from the smallest middle school child to our newest President knows it. Will he run to the finish line - will he do something about our borrowed time before it is too late?
Barack Obama – Sustainable Energy Policy
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14. January 2009 by David A. Peterson.
We have been hearing for weeks about the lack of credit available in the marketplace. Most of us don’t notice this type of problem on a week by week basis. In fact the only time you would notice is if some major purchase was about to occur.
You may be thinking “credit crisis, what credit crisis?” “It hasn’t affected me.” For the most part you are right the credit crisis hasn’t affected you. To make matters a little less concerning if you have a good credit rating and a job then you might not notice this problem at all.
The only way most of us not making a major purchase would have noticed is the lack of credit card offers coming in the mail. This may be the only silver lining of the whole economic mess – less junk mail.
Here is another deceiving look at the credit crisis; how is it that the housing refinance business is hot right now? Lots of people are being given the chance to restructure their current housing note. If you have tried to refinance and you can’t due to your credit rating then you are learning first hand what the credit crisis means to you and to the economy as a whole.
To you it means that your housing payment will remain at a higher rate than normal. In normal times you would have probably been able to shave a point or two off your current note. That 1 or 2 point shaving of your interest rate can add up to hundreds of dollars a month. That new found money, had you been able to get the new note, may have been enough to help you finance a new car.
There is the issue first hand. In our modern economy all of our purchasing decisions are interconnected. If you can’t finance your new home, refinance your old dwelling, or if you can’t buy furniture, put in a pool, or even put on a much needed roof due to the lack of credit then you are actually contributing to the economic recession. It’s that trickle down effect that liberals are always blasting as voodoo economics.
How many times over the past 20 years have we heard that “trickle down” economics will not work? I would guess at least 1,000 times a year we are hearing on our favorite cable networks or reading in our favorite newspapers how conservatives are destroying our way of life by focusing on supply side economics.
Here we are in a real life demonstration of why demand side economics can fail. People need to buy cars. Notice I didn’t say people want to buy cars they actually need to buy cars. There is a demand.
Mike Jackson, the CEO of AutoNation, was on CNBC yesterday putting the credit crisis into perspective. He said that last year GMAC was financing upwards of 1,600 credit applications a month. Last month he said they did 6! Out of approximately 1,000 applications submitted in December only 6 (not six hundred – six, as in one less than 7) applications were accepted and cars rolled off the lot. His best quote was “… The General Motors Acceptance Corporation should actually be called the General Motors Rejection Corporation…”
Here’s a CEO that employees 25,000 people and has untold millions of dollars tied up in inventory and he can’t even move a car unless he reaches into his own pocket and creates the financing himself. I’m not sure how many friends he can finance before even he runs out of money.
Let’s face it most people can’t buy a $30,000 car by writing a check, how about $15,000 pool? A $5,000 air conditioning system for your home? A $2,500 fence? A $1,500 engagement ring? A $250 business trip? At what point in your own life do you use some form of credit?
What if that credit is not available? Heck some people can’t even get divorced right now due to the credit crisis.
Regardless if you are a TARP advocate, or a promoter of libertarian ideas, you have to understand that supply side economics ultimately ends up affecting the little guy in a positive manner. The little guy is the economy. The little guy gives us the micro economic view of the economy. The little guy through his purchasing power allows all of the other little guys to stay employed.
We are all little guys. Rich, poor, under-employed, unemployed – we all buy the things that employ our fellow workers.
Bubbles occur when too much buying is going on at one time. We all saw it. The Federal Reserve purposely kept interest rates low while we all saw the explosion in housing values. The Federal Reserves task may be to control the national inflation rate but shouldn’t the Fed have recognized what the housing industry’s affect on the economy would be? Were we not seeing incredible housing inflation?
The government as a whole was so incensed at keeping job growth moving north that if failed to notice the bubble. That’s too polite – our elected officials ignored the housing bubble. Instead of sub-prime lending maybe a few interest rate increases would have been a better idea. I mean really - the housing inflation was clearly visible, and I am not even an economist.
What really happened was the Republican government was pummeled into creating more jobs at all cost. They were browbeaten, and verbally abused for years. The Democratic leaders and the liberal media would not let up. To the Democrats any job that is lost is the result of the federal government.
So our elected leaders, both Republican and Democrat did what was expected. They held hearings, passed laws, amendments, and allowed loose regulation to ensure that anyone that wanted a car, a pool, an air conditioning system, etc could walk right out and get one. Not to mention anyone that wanted to buy a house didn’t even need an income.
Hindsight is easy. It is easy for me to dissect the problem from behind my laptop. But how do we move forward and get out of this mess? Ultimately the little guy has to start buying again. The little guy makes up 70% of the national economy.
Supply side economics means that if enough resources are available at the top then large corporations, small S Corps, Limited Partnerships, and Sole Proprietors will have the resources to invest in their businesses and eventually hire additional workers. The newly hired workers will then do their part and buy the necessities of life – houses, cars, pools, air conditioners, fences, and engagement rings that will ultimately stimulate our national economy.
That is the micro view – the only way to move forward is to give businesses the resources to invest in their respective entities. This investment is ultimately called - job creation. These individuals with jobs will move the economy forward all by themselves.
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