Archive for October, 2008

On the Campaign Trail with the McCains

Saturday, October 25th, 2008

By David L. Brown

John and Cindy McCain came to Albuquerque today and I was there. I have been working with the west side McCain Campaign Office and provided them with information and photos about the vandalism to my house and McCain sign as reported here earlier. Thanks to the McCain folks I was able to get a press pass to the event this morning at the New Mexico State Fairgrounds. This is a report on my experience.

First, as I left early to drive to Albuquerque, I was delighted to see this sight just a couple of blocks from my house.

mccainyard.jpg

I stopped to take this picture, and as I turned to leave the owner of the house came out to see what was up. I pointed to my “McCain” cap and assured him “I’m on your side.” We chatted for a moment and I told him about the vandalism to my sign and house just up the street. He said he had started with five signs but one had been stolen. He is a serving member of the Army, presently back from a tour in Iraq.

I got to the rally about an hour before the McCains were due to arrive and as I wandered among the crowd one of the strongest impressions I took away was the sense of joy, enthusiasm, dignity and intelligence of the people in attendance. I thought I might witness some demonstrators trying to cause trouble, but did not. It was fun to meet and talk with people like this:

plumber.jpg

This is a real-life “Joe the Plumber,” Bill Howland, President of Affordable Service Plumbing, Heating and Air Conditioning in Rio Rancho, New Mexico, the town where I live. Bill told me that he worked 25 years to build his business from one old truck to one of the largest firms of its kind in the Albuquerque area. His “Plumbers for McCain” movement had brought a number of other real-life “Joe’s” on hand to help cheer on their candidate.

Here’s another image of a happy McCain supporter, this one holding a sign with the message “Country First”. Besides her smile, we exchanged thumbs ups across the walkway where the McCains were due to arrive.

countryfirst.jpg

The crowd was not particularly large, but they were all very upbeat. Here is a shot showing signs being held up and a large “Country First” banner that decorated one end of the area.

crowdsigns.jpg

The McCains were introduced by Senator Lindsey Graham (R-SC), followed by Cindy introducing John. This shot shows Cindy at the podium and Sen. Graham, center.

cindymccain.jpg

Cindy was a great presenter, drawing rounds of applause as she spoke of their children, and particularly their two sons presently serving in the armed services. She pointed out that between the McCains and Palins they have three young men serving, one each in the Navy, Army and Marine Corps. That got a tremendous round of applause.

Then it was John’s turn at the podium, and though I have seen him speak on television and YouTube clips many times, in person he was even more impressive than I expected. He is obviously pumped as this campaign goes into its final days. He looks and acts energetic, enthusiastic, and feisty. He told the crowd that Obama should not count on winning, adding “We’ve got them exactly where we want them.” Here is a shot where he seems to be looking and pointing right at the camera, with a backdrop of supporters. This is my favorite shot from the shoot this morning.

mccain.jpg

McCain emphasized his experience and pledged to keep America strong, protect social security and veterans, and cut waste in Washington. He pledged to reduce America’s dependence on imported oil, not only by offshore drilling (which set off a round of “Drill Baby, Drill”) and by every other means, including solar. He pointed out that New Mexico and neighboring Arizona are ideally positioned to reap the benefits of solar power. He also pointed out that he has a strong grasp of Southwestern issues such as water rights, immigration, and other issues, noting that his opponent “has never been south of the border.”

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Posted in Essays and Opinion, Politics | 1 Comment »

Beginning of the End for Age of Oil

Thursday, October 23rd, 2008

By David L. Brown

We have always contended that higher oil prices would translate into faster movement toward alternatives that use less gasoline or diesel fuel. The latest financial results at Union Pacific Railroad provide one piece of evidence that that is happening:

Union Pacific Net Jumps 38% on Higher Freight Revenue

Union Pacific reported a 38% jump in profit in the third quarter, beating analysts’ expectations.

The railroad company weighed in with profits $703 million, or $1.38 a share — up from the $532 million it earned in the same quarter last year.  Analysts polled by Thomson Reuters had expected the company to earn $1.30 in the third quarter.

“Union Pacific achieved record quarterly financial results despite a challenging economic environment and record-high diesel fuel prices,” said Jim Young, Union Pacific chairman and CEO.

The company saw its average freight revenues jump by 16%, led by big gains in agriculture and energy shipping. Average revenue per car also soared 22%, with broad gains in all categories.

Union Pacific says it is optimistic about the fourth quarter, despite the effects of the economic slowdown.

And why does this show the effects of higher oil prices? Simply because rail freight is far more efficient than over-the-road trucking. A single freight train can carry as much as 100 to 200 tractor-trailers, each requiring a driver and sucking a gallon of diesel fuel for nearly every five miles traveled.

This is just one example of why the paradigm is changing. Demand for oil has dropped worldwide due to the economic situation, and it isn’t likely to come back very soon, even though lower demand has brought prices back to the $70 range at present. OPEC is quite irate, because they had already gotten used to the $135 per barrel prices and thought they would go on forever.

Unfortunately for OPEC (and I say that with ironic intent), the world economy cannot sustain high oil prices. So when the oil minister of Iran says, as he did a couple of days ago, that “the end of cheap oil is over,” he may be right in a way, but in fact that statement could be edited to read a bit differently.

Try this version: “The age of cheap oil is over.” That’s more like it, because this is the end of the era of oil. There isn’t enough to fully satisfy demand except at high prices, and those high prices are not sustainable. The world economy was built not just on a foundation of oil, but of cheap oil. If that is no longer available (which it isn’t) then the economy will have to go in a different direction. And so it is. The age of oil is not truly over, but we are seeing the beginning of the end and that movement will only continue now that the oil peak has been passed and petroleum prices have reached levels that are not feasible for the world economy as it has existed.

It is too bad that the first phase of this landmark change probably must be a serious recession and likely a depression that might last for years. In fact, it is quite possible that the world economy will never fully recover from its long addiction to cheap oil. Certainly there will be many challenges to overcome, but it is at least encouraging to see a move in the right direction as signaled by such things as the move from truck to rail freight.

We have discussed the problem of an auto industry that was hellbent to keep churning out SUVs and pickup trucks forever, thus ducking the CAFE standards with a wink-wink nod from the government that was supposed to enforce them. Detroit is almost certainly doomed, and that is okay because we have an absolute glut of cars in the US. We don’t need any more new ones, and particularly as those millions who are driving leased cars turn in the keys and add even more to the unsold inventory of perhaps several tens of millions of unsold new and used vehicles. Detroit and its dealers are practically giving the things away just to get rid of them, so there will be plenty of cheap autos and trucks around for some time to come, long enough for somebody (if not Detroit) to begin to provide affordable and sustainable alternative vehicles such as all-electric models.

Meanwhile, Americans are driving less and the poor folks at OPEC (irony again) will discover that even if they lower production now, it will only offset the declining demand. They will have a hard time pushing oil prices back up because it is no longer a positive demand market as it has been in the past. Oil even at $70 is too expensive not  to cause demand to continue to decline, and in fact OPEC will need to drop production merely to keep from flooding the market and causing even further price declines.

Higher production costs also create a floor beneath which oil prices cannot fall, since no one will produce oil at a loss. That has been the problem with remaining reserves here in the U.S., which could not be developed at a profit when oil prices remained low.

Even at present prices, oil is priced too high to sustain the old economic model. Thus, change is inevitable and it is beginning to happen. There is a lot of bad news loose in the world, but this is one glimmer of good news.

Posted in Age of Oil, Economics, Transportation | Comments Off

There Is an Infection Loose in America

Sunday, October 12th, 2008

By David L. Brown

I have been more concerned about this election than any during my lifetime, and I was born during Franklin D. Roosevelt’s second term in office. I have closely followed current events, not as reported by the mainstream media which has failed in its responsibility and for the most part acted in a completely one-sided and biased way. Thankfully there are other sources of information, thanks to the internet, or else we would have no idea of what is actually going on. The story is out there, but thanks to the bias of the media it is not seen by most Americans. This is a tragedy.

What we have seen, played up in a day-to-day drumbeat of “news,” is the most incredible series of attacks on the Republicans, especially Sarah Palin, in modern political history. Lies are stacked on lies, and when any objection is raised the objections themselves are turned into more lies. Anyone who speaks out is immediately called a liar and a rascist.

One of the things that is particularly disturbing is the thuggish behavior of liberals who commit crimes in support of their candidate. Most Americans have not heard much about ACORN, but that is an organization that is now under investigation in ten states for voter fraud. It is made up of liberal activists called “community organizers” (sound familiar?).This is an organization with which the Democratic candidate has deep personal connections going back to the days when he himself was a “community organizer.” His campaign has donated $800,000 to support ACORN’s work.

I am also deeply concerned about stories about how any expression of support for the opposition candidate is likely to be met with criminal and even violent action. For example, I have heard that any vehicle bearing a McCain bumper sticker is likely to be keyed, spray painted, or its tires slashed. Perhaps that is why I have not seen a single McCain bumper sticker — not one. The Republicans are learning that they no longer live in a country that enjoys freedom of speech and expression, much less political opinion.

I decided to try an experiment, a simple demonstration of my patriotism and desire to be part of the electoral process. I (gasp) put a McCain sign in my front yard at 4:30 p.m. on September 29, exactly two weeks ago today and made a note on the calendar so tht I would be able to document how long the sign had been up. To provide background, I live in an upscale, middle class neighborhood in Rio Rancho, New Mexico. The deputy chief of the New Mexico State Police lives next door, and the Chief himself lives catty-corner across the street.

Upshot of my little experiment: Today my house was vandalized with particular attention to the McCain sign, as pictured here:

mccain1.jpg

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Posted in Essays and Opinion, Politics | 6 Comments »

When Is “Money” Not Really Money?

Saturday, October 11th, 2008

By David L. Brown

Back in the antediluvian world of ancient times, about three weeks ago, I wrote about the fact that the word “money” no longer means what it used to. Money once had innate value. For example, gold or silver coins were made of precious metals, and paper currencies could once be redeemed for those same metals. Dollar bills were called “silver certificates,” for they served only as a proxy for the metal itself. Money was actually “worth” something, because it was tied to things of actual value such as the gold in Fort Knox.

No more. Much of today’s “money” is a phantom, something that exists in computer networks and can flit around the globe at the press of a key. It is a fiction, a mere cloud of bits and bytes, and there is where the trouble starts.

This is particularly true when we speak of “money” as used to value paper assets such as stocks, bonds, futures options, derivatives and the like. These things may have some value, but that value is based more on faith than on fact. And the kind of “money” they represent just doesn’t exist in any real sense. After all, have you ever seen anyone buy groceries with stock shares, gas up their car and pay for it with futures derivatives, or buy a new suit of clothes with corporate bonds? No, of course not. These investment vehicles can be bought and sold for dollars, but they are not in themselves money in any sense, the kind you can spend or use to pay your bills.

Since I wrote on that subject a few weeks ago a trillion “dollars,” or two, or maybe three, has “disappeared” from the world economy. Where has it gone? Well, contrary to what one might think, it has not gone anywhere at all, because it never existed in the first place. There were no trillions of actual dollars that disappeared.

Hmm, you’re probably thinking, that cannot be. Why just the other day I had X dollars in my investment portfolios, and now I have a lot less. The difference just had to go somewhere. Who took it? Was it Wall Street thieves? OPEC? Bent politicians? That suspicious looking guy down the street? Who took my money?

An Associated Press story today addresses the situation:

Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a “fallacy.” He says the price of a stock has never been the same thing as money — it’s simply the “best guess” of what the stock is worth.

“It’s in people’s minds,” Shiller explains. “We’re just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we’re just extrapolating that and thinking, well, maybe that’s what everyone thinks it’s worth.”

See, the “money” represented by an investment portfolio has no real value, because it is based on supposition, hope, and, yes, faith. And, it depends in large part on what was originally spent to obtain the shares, bonds, or whatever.

But what about “real” money in the form of actual dollars? Surely a dollar is worth, well, a dollar. And that is true, as far as it goes. But if you are familiar with the concepts of inflation and deflation you know that the “value” of the dollar can rise or fall. That means that at any given time a dollar will buy more or less of any given commodity based on the fluctuation in its value. Stash dollar bills in your mattress and the future worth will depend upon the trends of inflation or deflation, not on any value innate in the cash itself.

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Posted in Economics, Essays and Opinion | Comments Off

Trade Freezing Up, Food Pipelines Blocked

Friday, October 10th, 2008

By David L. Brown

The credit crunch is about to put global hunger on the fast track. According to an article on the Financial Post web site (here), grain and other foodstuffs are piling up on docks because shippers cannot be assured they will be paid by potential buyers. Here are the lede grafs from the Canadian investment newspaper:

Grain piles up in ports

Canada next in inability to finance shipments

The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.

Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don’t trust the financial institution named in the buyer’s letter of credit, analysts said.

“There’s all kinds of stuff stacked up on docks right now that can’t be shipped because people can’t get letters of credit,” said Bill Gary, president of Commodity Information Systems in Oklahoma City. “The problem is not demand, and it’s not supply because we have plenty of supply. It’s finding anyone who can come up with the credit to buy.”

So far the problem is mostly being felt in U. S. and South American ports, but observers say it is only a matter of time before it hits Canada.

“We’ve got a nightmare in front of us and a lot of people are concerned it’s going to get a lot worse,” said Anthony Temple, a grain marketing expert based in Vancouver.

There is other evidence that the shipping industry itself is being hit hard by the credit problem and resulting slowdown in international trade. A friend of mine who subscribes to a private online service concerning international shipping called me yesterday with this news: “A few months ago it cost $1400 to ship a 20 foot container from Hong Kong to Hamburg. Do you know what it costs today?”

“Well, I suppose with fuel costs higher the price must be higher,” I hazarded. “What’s the deal?”

“Right now you can ship a 20 foot container on that route for $350,” he said.

Yes, obviously the owners of container ships are in dire straits and are desperately bidding for the rapidly disappearing freight business. The cost to maintain and operate a container ship goes on whether it is loaded to the gunwales or running empty with its Plimsoll line thirty feet above the water. Just as Detroit keep on making cars and trucks they cannot sell because they are committed to the cost of a union workforce, overhead, and contracts for components, the ship owners are willing to run at a loss just to keep at least some revenues flowing.

And things are bad all over. This little anecdote tells the tale of the situation in which the auto industry finds itself. A couple of months ago I reported here that the local Dodge dealer was offering brand-new quarter-ton 2008 Dodge pickups at 50 percent off the sticker price. That seemed to me to be a terrible sign of desperation on the part of Chrysler Corp. and its dealers. But yesterday I heard there is an even sweeter deal out there. Buy a 2008 Dodge pickup truck for half price — and get a new $12,000 automobile FREE.

Yes, FREE. Chrysler Corp is so desperate for cash to keep its doors open that it is virtually giving away its backlog of otherwise unsalable cars and trucks. That reeks of the kind of desperation that you see when a failing retail store puts a GOING OUT OF BUSINESS sign in its window and begins to sell off its inventory prior to locking the door.

Here is another piece of news from yesterday: The big electronics chain Circuit City has been placed on a watch list from a service that warns manufacturers not to ship their products because the buyer may not be able to pay for them. That spells almost certain doom for Circuit City, which is teetering on brink of insolvency. Another chain, CompUSA is closing stores and may also be insolvent.

But to get back to the subject of food piling up on docks, this is truly a dangerous sign. Where would that food be going, or in this case, not going? One place is Pakistan, which just a couple of days ago announced that it would run out of money by the end of this month. That is, the entire country would be broke. Pakistan is about twice the size of California, has nearly five times the population at about 174 million, and where three quarters of the land is rocks and mountains. It depends on imports of food as well as oil. They have begged Saudi Arabia to keep sending them oil, even though they cannot pay for it, and so far at least the Saudis have refused.

There are many more countries that rely on food imports, and which do not have large stocks. They have been accustomed to buying food as they need it, not being able to afford the cost of building up stocks. With the supply lines suddenly shut off, what is going to become of hundreds of millions or perhaps even billions of poor people in the Third World when there is no food? Not a pretty thought, is it?

The present crisis, which as I explained in a recent post is a panic, not a recession or depression, is tearing through the world economy like a pack of rabid wolves, leaving only havoc, fear and disaster. It does not look likely to stop anytime soon, and even if things finally settle down there has been vast damage done.

It is not just companies such as the Big Three automakers, shipping lines, or electronics chain stores that are in trouble — entire nations are running out of money. They are broke, to put it bluntly. So far Pakistan is on record, and so is Iceland. Who will be next? Is this a race to the bottom that will leave entire regions of the world filled with so-called failed states such as Zimbabwe or Somalia? Sorry to say, but it seems likely.

But why has this panic spread so far, so fast, and so deep? I think it can be seen as a result of too many years of whistling through the graveyard on issues such as exploding population, declining resources including food and oil, easy credit, greed, political impotence, and plain old denial.

We have discussed these and other subjects here for more than two years. After all, in case you had forgotten, the subject line in this weblog’s title is “Your portal to the near future and the dangers that lie ahead.” Well, the near future is here, and the dangers are here, too. The whole rickety house of cards is tumbling down, and the world will never, ever be the same again.

Posted in Economics, Famine, Global Security | Comments Off

Hawking Again Calls for Star Trek Future

Thursday, October 9th, 2008

By David L. Brown

Stephen Hawking, one of the world’s most celebrated scientists, has once again stated that “the long-term future of the human race must be in space.”

According to a report on CNN.com/europe, Hawking recently said:

“It will be difficult enough to avoid disaster on planet Earth in the next 100 years, let alone next thousand, or million. The human race shouldn’t have all its eggs in one basket, or on one planet. Let’s hope we can avoid dropping the basket until we have spread the load.”

He added: “…I’m an optimist. If we can avoid disaster for the next two centuries, our species should be safe, as we spread into space.”

He has gone on record before saying that humans should migrate to other solar systems and learn to “live in space.” More than two years ago on June 15, 2006, in an essay on this site titled “Man’s Natural Home Will Always Be Earth” (use the search field at upper left to find it) I challenged his ideas, pointing out:

[…]please note that I am not taking exception to Hawking’s warning that there are serious threats to us here on Earth. […] What I disagree with is the false hope that human beings can somehow become like the mythical gods and travel and live throughout the universe. Science and common sense alike offer a wealth of well-reasoned evidence why this cannot be.

[…]there is strong reason to believe that the Earth is the only true home than humankind can ever have. The idea that other alien planets could be converted into mirror images of our own planet — which is itself the product of billions of years of unique geologic and biologic evolution — is patently impossible for any mortal beings, whether humankind as we now exist or some future race of supermen that we can only imagine. Humans are not simple machines that could be transplanted into strange and generally hostile environments without ill effect.

Hawking’s statements indicate to me that he holds a very deep seated pessimism about the future of the Planet Earth. When faced with a dismal situation, it is a natural instinct to imagine a better future. However, as I pointed out over two years ago, and as my novel The Star Phoenix addresses as its main theme, the only natural home that humanity can ever have is right here on Earth. There are no real options for the human race other than to get back in balance with Nature, or to become extinct. Those are the choices facing the human race, at least in my opinion. Sadly, we are a long way down the road toward option two.

If I could believe in the promise of a Star Trek future, with friendly Earth-like planets circling distant suns just waiting for human pioneers to arrive and settle down in comfort, I would be glad to agree with Dr. Hawking’s advice. But logic tells me that the only way humans could ever live on another planet would be to sterilize whatever life it might have, since it would surely be inimical to Earth life forms, and create from scratch a new environment completely duplicating that of Earth.

Does that sound practical, or even possible? It took Nature more than four billion years of geological and evolutionary processes to create the vastly intricate and inter-connected thing that is life on Earth. How long would it take mere humans to do the same thing — should it be even remotely possible?

Unfortunately I must conclude that those who see a future in space for humans, and Dr. Hawking is only one of many, are clinging to an impossible promise that has its roots in faith, not reality. If there is a difference between such beliefs and those based on the Book of Genesis, it is only in a matter of degree.

The Earth will survive the on-going mass extinction event that is presently under way. But many species will not, and human beings might well be among those to disappear. As I wrote a few weeks ago on this weblog:

Like rebellious children, humankind has set itself against Mother Nature. If we are to survive at all, we must make peace and beg Her forgiveness. Only when we live once again in balance with the environment from which we sprang can we maintain a place on this, our very own Planet Earth.

I sometimes think I sound like a broken record, but this is a serious question. There are too many people, using too many resources for the Earth as we know it to survive. There must and will be change, and in the end the Earth will always win. We cannot defeat Nature, for she is our Mother, not our enemy. We can only survive in peaceful cooperation with Her.

To dream of flying to the stars, living on some asteroid, building pleasure palaces at L5 nodes, or joining some Galactic Federation where our descendants can rub elbows with bizarre alien creatures in some Star Wars cocktail lounge is nothing but fantasy and delusion.

Unless Stephen Hawking knows something that none of the rest of us know — and it would have to be a very BIG something along the lines of the literal existence of God — the future of humankind lies in only one place in the Universe, and that is right here on the Planet Earth.

Hawking does know that we are in trouble here, and that must be the reason he rambles on about a future somewhere else. I share his pessimism, but regretfully cannot share the hopeful optimism with which he attempts to offset it.

Posted in Essays and Opinion, Extinction, Space Exploration | Comments Off