Posts Tagged ‘wasteful practices’

The Blame Game, Gulf oil spill version.

2010/05/30

There is a lot of finger-pointing going on right now over who is to blame for the horrible disaster in the Gulf of Mexico, which is already the largest oil spill in U. S. history.  Suppose we find the person(s) responsible.  Will that change what has happened?  Will affixing blame prevent what has happened from happening again?  Probably not, in both cases.  And the real blame lies with American consumers, who steadfastly refuse to give up driving by themselves everywhere that they go, paying any amount for the gasoline they need, and turning a blind eye to the future.

The only reason that BP was drilling a well nearly a mile under the surface of the ocean was because they stood to make a profit from it.  With gasoline selling for nearly 3 dollars a gallon, oil companies are willing to try to extract crude oil under any conditions.  The hot new area for oil exploration right now is off of the coast of Brazil, in 10,000 feet of water.  The oil deposits lie nearly 3 miles beneath the sea floor, which means having a stick of pipe nearly 5 miles long.  The oil that is recovered is going to be very expensive, but the demand is so great that profits are assured.

The only way to stop this insanity is to reduce our consumption of petroleum products.  As long as huge profits are in the offing, people will do anything to be part of the gravy train.  More regulations won’t help, tighter supervision won’t help, greater accountability won’t help.  In many ways, this is very similar to the war on drugs.  All that we have accomplished by cracking down on drugs is to make selling and producing them even more profitable, which means that someone is ready to step up every time someone else gets busted.

The oil companies are like pushers, trying to get us to use as much of their product as possible, while trying to keep the competition from making any gains in their turf.  We could reduce our dependence on oil substantially, but that is the last thing that the oil companies want us to do.  They want us willing to pay any price for a gallon of gas, willing to stand in long lines to purchase this miracle substance, willing to buy vehicles which get poor mileage.  They don’t want us deciding to ride the bus or the train instead of driving, or carpooling, or riding our bicycle, or walking, because the oil companies can’t make a profit on those activities.

Big business wants the government to do everything possible to keep energy cheap, even if it threatens our survival.  We will do almost anything, pay almost any price, for the illusion of freedom that comes with owning a car.  So we created the demand for oil that induced BP to drill for oil in 5000 feet of water.  We are the ones who are pressuring the government to open up the Arctic Wildlife Refuge for oil production, not the oil companies.  We are the ones who are willing to buy oil from people who want to destroy us.  Changing our lifestyles to ways that are sustainable, which do not degrade the planet, is the only way to stop the oil companies from creating more disasters.  The government can’t do it, special interest groups can’t do it, religion can’t do it.  Every time that we drive a car, we are voting for more exploration, greater acceptance of risk, higher gasoline prices.

All we have to do is to leave the car at home when we commute to work, or to school, and we would reduce the demand for oil considerably.  And we should do so anyway, just to get ready for the days when we can no longer afford all the gasoline that we want.  Because things are going to change, and we will have to change in response.  It is much easier to make a change willingly than it is to be forced to change.  We need to have alternatives in place for when gasoline is just too expensive.

Future money?

2010/02/24

We live in a country where it is legal to borrow something from somebody, then sell that thing to someone else, for less than it is worth.  Then, when the price for that thing has gone down even more, we buy it back, and return it to the owner.  Of course, it is worth much less now, but that is not our problem.  That is the process of short selling, a financial gimmick that lets people profit on other people’s misfortune.

This is comparable to borrowing somebody’s car, keeping for a while, and then returning it all scratched up.  And I have to wonder, does the person who owns the share know that it is being borrowed for the purpose of short selling it?  Or are the shares being ‘borrowed’ coming from a broker who is representing the owner?  I don’t think that I would lend something to someone with the knowledge that they were going to try to decrease the value of what I was lending them.

The American financial industry seems to have lost all semblance of morality, a reflection perhaps of the greed that it represents   Our materialistic society puts so much emphasis on wealth that people will go to any lengths to have it.  Wealth supersedes family, friends, community, physical health, spirituality, and self-respect.  How can you have self-respect when you know that you will do anything for money?

The malaise affecting the United States right now is the result not of loose regulation, but of the greed of Americans.  Because we are a materialistic society, we equate our self-worth with our wealth.  To have more is to be more worthy.  We do not attach worth to spiritual affairs; a person who is deeply spiritual, with many friends, who has no money, is considered a poor man, of little import.  Helping others, sharing what exceeds our needs of what we have, giving our time to another, these are considered signs of weakness in our culture.

The more we define ourselves by what we own, what we possess, the less likely we are to believe in ourselves when we lose those things.  No one can take away your spirit, your ability to give, your strength.  We surrender those things with our association of wealth with superiority, defining ourselves with qualities that come from outside of ourselves.  To believe in one’s self means to know that you are strong, that you have much to offer those around you, and that you have value by being who you are.  That is where true security comes from, and this is why wealth is false security.

Our beliefs have been manipulated by the greedy, so that we have turned away from the things that made our forbears strong.  We have sacrificed practically everything to promote the accumulation of wealth, while doing little to implement the creation of new wealth.  Short selling a stock does not create new wealth, it merely produces the illusion that wealth has changed hands.  But the value of the stock has declined, which means that wealth has disappeared.  Is this how we are going to make our money in the future?

Losses from profits

2010/02/23

How much profit should there be in a system?  How much money can we extract from something before it stops working?  We have seen what happens when too many people are trying to extract too much money from the system, and push prices to unsustainable levels.  But what about health care insurance?  Should substantial profit be allowed from providing access to health care?  Because that is what the insurance companies are doing, is controlling access to health care, while making a  profit.

And, in order to make a profit, they must first cover all of their costs, which include the people who process the claims, the bookkeepers, the managers, the janitors.  As the insurance industry has grown in size, the percentage of the proceeds from selling insurance going into overhead has probably increased, which means that rates must be increased in order to provide a steady level of profit.  These profits are necessary so that the companies can pay their shareholders dividends every quarter, as well as their own salaries.

Calls for larger dividends mean squeezing more profit out of the system, which usually starts with raising rates.  I would really love to know what the total cost of health care is minus the costs of insurance.  Just the amount that the doctors, the hospitals, the labs, the technicians charge in a year.  By comparing that to the total cost of health care for that year, we could perhaps gain some understanding of what the real cost of health care insurance is.  And, of that cost, how much is pure profit.

Personally, I find it difficult to believe that we can ever reform our health care system as long as the insurance industry is such a major player.  By incorporating their costs and profits into total health care costs, we see a steady increase in what we pay, even though the providers of the health care are not seeing a corresponding increase in their income.

Maintaining large profit margins has other negative effects, such as outsourcing jobs.  Why is this a negative?  Because the people who used to do the jobs that have been outsourced frequently lose the ability to buy the products that they used to make.  This reduces the market for the product, which lowers profits.  Yet, the justification for outsourcing the work was to increase profitability.  Not merely to maintain it, in most cases, but to increase it.

Repeatedly, I have seen American companies managed right into the ground, as profits have taken precedence over quality and service.  What have been thriving businesses going broke because the owners took too much of the income for themselves.  Companies which manipulated their books to appear more profitable than they really were, to keep their stock price up.  Corporations which have ignored sustainable practices in order to maximize profitability.

Unfortunately, there is not enough profit in the economy for everyone to quit working, which is what seems to be the goal these days.  Nobody is interested in doing a job that they can take pride in, they don’t want to even work.  Somehow, being useless, a drone, has become fashionable.  Working for a living is looked down upon, a sign of poor financial sense.  Well, if we keep on pursuing extravagant profits, no one will have to work, because there won’t be any jobs.

Building a better beast

2010/02/22

The United States economy is a sick puppy right now, reeling after over 1 trillion dollars evaporated.  The driving force of the economy in the past, consumer spending, has fallen drastically, as the middle class has been forced to live within its means.  Credit is almost impossible to get, and has become more expensive.  The declining value of homes has made the home equity loan a thing of the past.  Unemployment is scaring people into paying off credit cards, and building up savings.  Federal stimulus money has kept states from laying large numbers of employees, but the money is running out.

Maybe we ought to think about spending some of our money making the country more efficient.  This would reduce our dependence on foreign energy sources, as well as cutting the emissions of greenhouse gases.  Money would be freed up from energy costs, which could be used to increase spending.  Consider:  Many commercial buildings have no insulation.  That is right.  None.  The average home more than 20 years old is seriously lacking in insulation, and often leaks air copiously.

Putting people to work right now is difficult, because plans have to be drawn up and approved, bids taken, and contracts let.  But retrofitting homes and businesses could commence within weeks, if done properly.  Although President Obama talked about a program such as this a few months ago, little has been said regarding it recently.  Could it be that energy companies don’t want to see consumption reduced?  Could it be that Congress doesn’t like giving money to the average American, although they have provided plenty to the big banks and two of the car companies?

Perhaps we could couple improved efficiency with greater reliance on solar and wind power.  Low interest loans for solar panels and wind farms would probably increase the numbers in use considerably.  We are falling behind the rest of the world in the use of renewable energy, especially in the field of solar.  Building and installing solar panels would employ many people if we were to make a national push to utilize them.

Buses are a good way to save energy, and many parts of America have very few.  Building buses financed by federal loans to local transit operators would create employment in the parts of the country which have been hit so hard by the fall in auto sales.  People who ride buses save money which they can use to take their cars out for recreation, whereas people who drive to work often cannot afford Sunday drives.

There are ways to put people to work, right now, doing things that we would benefit from for years and years.  Some seem socialistic, but saving our society seems a worthy enterprise to me.  If we are going to keep borrowing money from China, at least we ought to do something worthwhile with it.

The estimated value of debt

2010/01/29

This financial crisis we have just started dealing with is not a surprise, nor was it unexpected.  And it isn’t over.  We are dealing with the consequences of our actions, the paybacks for the greed we all have been guilty of.  Sure, we believed that our homes were appreciating at astronomical rates, and why, of course we took our banker at face value when he said that it would wise to take out a home equity loan.  We wanted to have that money to play with.  We wanted to buy a nicer car to commute to work with, that boat that was on sale, or put in a pool.  Could we afford to do these things without borrowing money?  Not no.  Hell no.  We shoveled debt onto our heads like we were digging foxholes under fire.

What has all this economic activity created, all the money that we spent bought?  And how could so much of it just evaporate overnight?  People think about credit, but what about debt?  How many people think about the fact that most of the wealth that has been created in the last 20 years or so has been nothing more than numbers in computers, based upon the value of debt.  The more people owe you, the richer that you are.  People invest in debt, banks sell it, and nobody seems to want to pay it off.  What a wonderful concept; buy today what you cannot pay for until tomorrow, if you are lucky.

Did anyone figure in the effect of laying off millions of the highest paid consumers on the planet?  Is it really growth when you take jobs away from one group of people and give them to a different group?  Or is that just financial manipulation, to create wealth by cutting costs.  What happens when the cost that you cut is the buyer of your product?

Real wealth does not evaporate, it does not diminish in value, it is durable, and serves all the people.  Real wealth is roads, bridges, fiber optic cables, transmission lines.  How much real wealth has been created in the United States in the last 20 years?  And it is not creating new wealth to repair old roads, it is investing in what you already have.  So, we built a lot of buildings, but were they needed, or were they funding for a developer?

On every level, Americans have chosen to ignore the future, to resist real change, to accept that they were no better than anybody else.  Other people could ride trains and busses, we were going to drive.    So what if our new building doesn’t have any insulation.?  It is cheaper that way.  And the whole time, we have been insisting that everything is worth more.  Not because of any discernable reason, but just because we said so.

We have invested in trying to be wealthy enough to not have to work, not in making our futures better.  Now, we are paying for sitting on our butts.  We don’t create anything of value anymore, and we can’t even govern ourselves without borrowing money to do it.  Instead of spending money to develop the technologies needed to make a future possible, we have invested in moving production from America to some overseas country.  But we have not invested in giving Americans anything to do.  Normally, economic growth means that the leading countries improve their technology, and move from building one kind of product to one which is more complex, advanced, or somehow beyond the abilities of other producers.  Displacement happens as new industries replace old ones, and people have to learn new skills.

We veered off from advancing our technology, because it would have required a long-term investment, tying up our money for decades.  And we wanted to keep our technology to ourselves, so that no one else could use it against us.  In the 1960’s, during the administration of Richard Nixon, it was decided that the United States would not invest substantial resources into outer space.  The Apollo program would be cut, and no other manned exploration would be funded.  The military was going to handle space exploration, and only for the purpose of defense.

Since that time, the United States has spent more on cosmetics every year than has been spent on developing space manufacturing, mining, and processing.  Typical budgets for manned space exploration have amounted to a few brief missions every year, and nothing else.  The US would not have built a space station except because of pressure from its allies to contribute to one.

It is almost like we are committing suicide by starvation.  We give away all of our food, and do nothing to find more.  The world is fighting over a pie, each person wanting a bigger slice, and more people wanting slices all the time.  We need true growth, growth that results in wealth that will not evaporate.  The Earth is being used up, corrupted in our quest for wealth, while everything that we could possibly need exists somewhere in our Solar System.

Americans should be building space ships, working on space stations, or the Moon, doing work that produces tremendous value, so that they could bring home enough money to buy cars from Japan without having to borrow the money from China.  General Motors would be the worlds leading producer of launch vehicles, and Ford would be making deep space probes.  But we chose to be wealthy instead.

Scott P. Holman

2009/01/29

A new car

2010/01/24

I want a car that doesn’t have any pistons, or valves, doesn’t have a crankshaft or a camshaft, and doesn’t need a catalytic converter.  What kind of car would this be?  A turbine-electric hybrid, which burns diesel fuel at least 95 percent efficiently.  A turbine engine doesn’t burn the fuel in little bursts, but continuously, which means that it burns cleaner.  Practically all automobiles today use the most inefficient kind of engine known to Man, the reciprocating type, where the pistons keep changing direction, and the fuel is exhausted when it is only partially burned.

Added to that inherent inefficiency is the fact that most cars are automatics, which means that a considerable amount of energy is lost in the torque converter, the device that allows the driver to stop without taking the car out of gear.  Adding together all the inefficiencies in the modern automobile, and you might as well pour three quarters of the gas that you buy right onto the ground, for all the good that it does you.

Why haven’t turbine engines been used in cars before?  Because they create their power in a very different way than a reciprocating engine.  A turbine spins at high speed, which makes it difficult to couple that energy to a drive line.  Previous attempts at turbine cars often used bulky, wasteful transmissions, or something equivalent to a torque converter.  But today, with computer control, we can use the turbine to generate electricity, which is then used to drive the wheels.

Replacing fossil fuels with batteries or fuel cells invokes serious performance penalties, limiting range and speed, as well as load carrying capacity.  But the main reason that engineers are trying to get around using fossil fuels is that they are expensive and dirty.  A turbine would enjoy far greater fuel economy than any possible reciprocating engine could, and will burn much cleaner.  Several hundred miles per gallon is quite feasible with a turbine-electric hybrid, without limiting speed or load carrying capacity.

Of course, we still will have to reduce fossil fuel use as they get more and more expensive, but we are not likely to find a way to continue to rely solely on the automobile as our primary means of transportation.  Public transportation, such as buses and trains, will eventually have to shoulder the majority of the passenger miles traveled in this country, but that does not mean that we will have to give up cars entirely.  They will just have to be far more efficient than what we have now.

Which road to recovery?

2009/12/13

As the financial crisis has evolved into an economic crisis, where unemployment and diminished consumer spending have replaced toxic assets as the poison in the system, more calls for tax cuts are heard.  Stimulus spending is not reviving the economy, therefore another remedy must be needed, the thinking seems to be.  Conservatives have opposed the stimulus spending from the beginning, insisting that tax cuts would be more effective at reducing unemployment and stimulating private spending.  They argue that reducing taxes would allow investment into new businesses, which would create jobs.

This might be so, if the investments were made in the United States, and the jobs that were created were for Americans.  But recent history indicates that large corporations are more likely to use money freed up by tax cuts to invest in overseas production, to expand outsourcing, to maximize profits.  How is this going to help American workers?  Making products cheaper doesn’t help if consumers are unemployed, or underemployed.  Private investors are unlikely to put their money into improving energy efficiency, or alternate energy sources which will take years and years to pay off.

Conservatives object to the government simply handing out money that it has had to borrow, yet cutting taxes is basically the same thing.  Either way, the deficits will continue to increase.  But stimulus money has not been used to create new jobs in many cases, but to preserve existing ones.  States have been able to avoid laying off educators by paying them with stimulus funds, which keeps unemployment from going up more, but does not create new jobs.  Construction projects have had some positive effect, but many of those projects will only provide temporary employment.

How can we put Americans to work for the long-term, while at the same time putting more money into the hands of the private sector?  Doing one without the other is only going to prolong our agony.  Tax cuts will put more money into the hands of the private sector, but there is no assurance that it will be used to create jobs in America.  What industries are ready for large-scale investment, what sector could absorb millions of workers?

If we were to improve the ways that we use energy, so that we could accomplish the same result with fewer units of energy, we would be creating new wealth.  If we reduce the cost of heating and cooling a person’s home, we allow that person to spend a larger portion of their income on other things.  If we reduce the energy overhead costs for a retailer, that retailer can either lower their prices, or increase their profits, or a mixture of both.  And these benefits would be permanent, not just a temporary shot in the arm.

So, how about we cut taxes for those who invest in improving their energy efficiency, while using federal funds to put people to work improving energy efficiency?  In this way, we can target a specific area for improvement, instead of just handing out money in the hopes that some of it will create new jobs.  Energy efficiency is one of the greatest weaknesses of the United States, perhaps in part because consumption has made some people richer.  But choosing consumption over efficiency has made all of us poorer.

Cash for Caulkers makes many sense!

2009/12/04

Why is it difficult for people to support a public works program which would employ large numbers of people for at least a year or more, which would reduce the nation’s carbon footprint significantly, as well as our dependence on foreign energy, and which would increase the value of homes and business establishments across the country?  The proposed energy conservation program being called ‘Cash for Caulkers’ offers the most benefits from spending federal dollars I can imagine, both in the near term and years down the road.  A large number of structures in this country were built with little regard to energy efficiency, both residential and commercial.  Increasing insulation values, installing storm windows, and closing up gaps in siding can have a tremendous impact on the amount of energy used to heat or cool a building.

So, why would people oppose such a program?  Perhaps because they stand to gain more if consumption of energy is not reduced?  Could it be that there are people who are so selfish that they begrudge any effort to improve energy efficiency?  Certainly, reducing the amount of coal and oil that we burn seems the logical way to reduce our emissions of carbon, but discussions of solutions to the climate change problems never seem to include changing our habits or improving our methods to significantly reduce the amount of fuel that we use.  But improving the energy efficiency of structures is the most painless way to reduce our consumption of energy, because it won’t result in changes to our lifestyle.  Just because your house has been insulated doesn’t mean that you have to get up earlier, spend more time commuting, or that you have to spend time out in the weather.

There are such a large number of structures which qualify for weatherization that the program could last five years and still not get them all.  But that would be five years of employment for people who have experience in the building trades, or warehousing, or billing, or any other job created by the spending of our money to make us smarter in how we do things.  The individual consumer will benefit the most from this program, because, even if the work is financed as a loan, it will be paid off in just a few years, and then the consumer can enjoy lower energy costs.

This is investment in ourselves, the acceptance of the need to spend for the future, instead of just for the moment.   This is setting money aside in the knowledge that it will create more money, for years to come, without betting on interest rates or the stock market.  This is investment which pays dividends starting immediately, and continues to generate dividends for a lifetime. This is investment that will put lots of people to work, and not for just a few weeks, or a couple of months, but long-term.  This is investment which will create jobs across the spectrum, from skilled to unskilled, from manufacturing to construction.  This is a public works project that makes sense, and is long overdue.  Let us see if we can shed the mantle of shame that goes with being the most wasteful nation on the planet.

Is health care socialism?

2009/09/21

Many people are upset because they think of national health care as socialism.  They can’t understand why everyone should be able to receive care when they need it, from a regular provider, instead of the Emergency Room.  To them, capitalism means treating the workers as a resource, to be exploited as much as possible.  The fact that the workers make it possible to create wealth seems irrelevant, not part of the equation.

These same people can understand spending money to keep plant and equipment in operating condition, investing in repairing something so that it will keep working.  When the line breaks down, getting it fixed as soon as possible is worth whatever it costs, because until it is fixed, no one can work.  But if the workers are sick, or injured so that they cannot work, taking care of them is different somehow.  It used to be that people who were injured on the job and could no longer work were fired, without any benefits or pay, to fend for themselves.  There were always more workers to replace them.

But today, most workers must be trained, sometimes for months, as well as being educated by the school system.  So there is an investment needed to bring new workers into the production system.  Keeping the workers who have been trained healthy is a worthwhile investment, which makes sense in terms of the capitalist viewpoint.  This is one of the reasons that health care packages were included as benefits of employment with many companies.

But the cost of providing those health care packages is rising rapidly, and health care benefits are one of the biggest cuts that employers seek when bargaining with unions, and new hires are often receiving less health care benefits than those of senior workers.  But companies in the United States are competing with companies in countries that provide national health insurance, so they have costs that those foreign companies do not.

Until we can view the population of the US as part and parcel to the production of wealth, we are likely to be less and less competitive, as health care costs hobble the profitability of American corporations.  We have to view taking care of the workers as keeping the methods of wealth production in good order, not as giving away wealth.  What we are doing right now is tantamount to letting our production lines crumble, our warehouses fall down.

You lie, I hope!

2009/09/15

When something does not fit our preconceptions, we discount it, try to ignore it, pretend that it is wrong.  When a white Southerner shouts, “You lie!”, he is trying to convince himself and others that what he sees ain’t so.  Many people want to believe that the system isn’t broken, that average people are not being smashed flat by the wealthy, that a sick little girl can go to the doctor.  But what is the truth is the opposite of those wishes, an ugly, twisted truth that decent people don’t want to believe can happen here.

The crisis in health care is indeed a crisis, because it is destroying our trust in our system, in our belief of equality.  This crisis threatens the financial stability of state governments, the future of large companies with retirement plans, the very health of our children.  People are literally dying because they do not believe that they can afford the health care that they need, or because they fear the financial burden that befall them if they seek that care.

State governments across the country are seeing the health care benefits that they extend to their employees bankrupting the public coffers.  General Motors collapsed because of the cost of health care for its retirees, not because its cars were not as popular as another automakers.  A rapidly increasing number of Americans have no health care provider beyond the local Emergency Room or fire department paramedic.

And all of this for what?  To make sure that the wealthy continue to get wealthier.  The health insurance industry will always be profitable, right up until the time that the health care system collapses, because the companies involved will always consider their shareholders first, last, and always.  No matter how many people it takes to process claims, handle the accounting, or wash the windows, the insurance companies will charge enough to show a profit.  Nor do they have any incentive to keep their operations as slim and efficient as possible, because people who want assured access to health care will have to pay those companies the premiums the companies set.

These are hard truths, that strike at the very core of our beliefs about equality and justice.  Discounting them, calling them lies, makes it easier to pretend that they are not truths.  But it does not change the fact that there are children all over the country who cannot go to the doctor.