Negative Tone in Obama Fundraising Letter

I wonder what the motivation is behind the repetitive negative language in this Obama fundraising letter. It has nine consecutive sentences beginning with the words “I don’t”.

I don’t want to wake up four years from now and find out that millions of Americans still lack health care because Washington wouldn’t take on the insurance industry. I don’t want to see that millions more jobs have been shipped overseas as we stood idly by and allowed our economy to remain tilted against working Americans.

I don’t want to see that the oceans have risen a few more inches and that the planet has reached a point of no return because we couldn’t find a way to stop buying oil from dictators.

I don’t want to see more American lives put at risk because no one had the judgment or the courage to bring a misguided war to a responsible end. I don’t want to see homeless veterans on the streets. I don’t want to send another generation of American children to failing schools.

I don’t want that future for my daughters. I don’t want that for America.

There probably is a good political reason to write like this, but I can’t imagine what it is.

Now Is the Time to Prepare for a Possible Oil Crisis

Although it’s a good thing for economic growth, I am somewhat disappointed to see oil prices falling. The downside to falling oil is it takes away the urgency to deal with the fact that oil is a finite resource.

People have called the recent rise in oil prices an “oil tax”. This makes some sense because oil fuels our economy. It's a misleading way, however, to model the effects of oil prices. Throughout human history, economic growth has been powered by human and animal muscle. Sun falls on the earth, provides energy for plant food, and we turn some of that energy into human and animal powered labor. We discovered that some of the energy from the sun had accumulated for billions of years and formed fossil fuels. This allowed the industrial revolution, in which production and human population peaked dramatically. A few hundred years of burning fossil fuels is the exception in human history. Calling rising energy prices a “tax” makes it seem like cheap energy is a birthright instead of a brief anomaly in the course of human history.

The issue of long-term energy supply, not the issue of short-term price fluctuations, should be our main concern. The world economy and the supply and distribution chains to provide for the needs six billion people depend on energy. We have a lot of good ideas for alternative energy, but we have no solid plan for how we will provide for everyone once fossil fuels become depleted to the point of being impractical to extract.

Hopefully, increasing fuel prices will be gradual. Those higher prices will encourage drilling for oil in more locations and will encourage finding better ways to get energy from fossil fuels other than oil, such as coal and oil shale. At the same time, these higher prices will encourage development of new energy sources. This hopeful scenario is the probable outcome, but “probable” isn’t good when the alternative outcome is the collapse of world economy. Even this hopeful/probable outcomes isn’t ideal. It has us involved in wars and trading with countries we disagree with for decades to feed the oil the addiction while alternatives are being developed.

The government should initiate taxes to make sure fuel costs stay high. This will encourage development of new energy sources on our own time table, rather than under crisis. The fact that there is no plan should scare the heck out of us. Now is the time to prepare for the unlikely possibility of seeing an energy crisis in the next few decades that is so intense it ends the world economy as we know it. Doing nothing would probably be okay, but let’s be conservative and take preventative action now.

A Very Slow Shift Away from a Culture of Risk and Debt

More articles about saving money have been appearing lately in the personal finance section of Yahoo Finance. This makes me think that the mortgage problems are making people more risk averse, which IMHO is a very good thing.

In that vein, there was an article today with the promising title Some Live Without Credit Cards -- Could You? Unfortunately, most of the article buys into the banks’ way of thinking that some consumer debt is a good thing and that having a high credit score matters. These gems are just a small sample:

• Stop to consider the long-term implications on your credit score.
• A credit card is going to demonstrate how, if you pretty much have an open-end except for a credit ceiling, you can charge varying amounts each month, thus your payment each month is going to be different, and they like to see how you handle that.

If banks like it, I need to run out and do it? Why do we care what banks like to see? I guess because we want to borrow more money. But wait, I thought this article was about living without credit cards.

A third of the article is about things you can do to make banks like you and want to lend you more money. The rest is about people who can’t get banks to lend them money and people who do very stupid things for debt. The tenor is that some use of consumer debt is a smart thing as long as you don’t go overboard. There is only one sentence about the concept of spending only what’s in the bank account. All this is unfortunate, but still, front page articles even questioning consumer debt is a step in the right direction.

Is It the Economy, Stupid?

The economy has been in the news a lot lately. GDP growth is slightly lower than average. Unemployment is slightly above normal structural unemployment. The news coverage, however, often incorrectly says the economy is in trouble.

Even worse, some coverage of this non-problem suggests it’s the main issue in the presidential election. No one can do anything to stop the economic cycle of expansion and contraction or the quarter-to-quarter ups-and-downs of markets. Nevertheless this is the stuff that politicians and media talk about.

One reason for the perception that things are worse than they are is that the problems are narrowly concentrated in areas where people turn for safety. Usually when the economy contracts or stagnates, investments in growth industries are most affected. If it’s bad enough, it can spill over into normally stable areas and depress real estate prices and cause bank failures. The present situation is reverse. The areas that people thought were safe, i.e. mortgage backed securities and real estate, have been hurt while the rest of the economy does okay. This situation is psychologically worse than in 2000-2002 when the tech bubble deflated. In that bubble, people seeking high risk/return suffered losses. In the RE bust, people seeking safety suffered losses.

Another reason is that too many people are living on the edge counting on most things to work out in their favor. When the inevitable sickness, emergency, contraction in GDP, or whatever comes, it’s a crisis that demands a government response. This way of thinking is bad on many levels.

• It takes valuable time away from issues that the government actually can do something about.
• It makes people feel dependent on the government.
• The government doesn’t do as good a job as people looking out for themselves.
• No matter how good the government is, there will always be ups-and-downs in life. Not planning ahead always results in problems.

Someone needs to tell politicians and the people who cover them that managing the normal ups-and-downs of the economy is not the president’s number one job function.

Health Effects of Wireless Technology

As part of a viral marketing campaign for their Bluetooth headsets, Cardo Systems created an illusion that several mobile phones next to one another could pop popcorn. It's interesting that they would use this illusion to promote a product that involves putting a transmitter next to your head. I guess any publicity is good publicity, as long as we get their URL right in our links.

We know the thermal effects of a 1/4 W transmitter aren't significant, but we don't know for sure about the athermal effects. I first saw a 1 GHz handheld transmitter in a magazine in the late 80s. Handheld 1 GHz was new technology then. (Modern mobile phones operate a 0.9 and 1.85 GHz. Bluetooth operates at 2.4GHz.) The magazine warned users to hold the unit far away from their heads when they pressed the transmit key. Gradually, over about 20 years, people seemed to forget about the possibility of long-term athermal effects. I am not sure whether there was some research published that said there are no significant athermal effects from 1 to 2 GHz signals, or if people just forgot about the possibility.

On one hand 1/4W isn't very much compared to 100,000W FM radio stations people have been exposed to for decades, but mobile phone frequencies are 10 times higher and people hold the phones right up to their heads. I would not be completely shocked if there turns out to be some long-term health effects.

Borrowing Binge Hangover Remedy

The National Association of Home Builders has created a website explaining the new $7,500 tax credit provision in Congress' latest RE bailout package. You have dig to into their website to see where they admit that the credit operates like a loan and those who take it will be required to pay $500 extra in Federal taxes for the next 15 years.

The Problem: In 2005, unscrupulous people encouraged people to buy more house than they could afford. The government went along with it thinking that more ownership, even highly debt-leveraged ownership, was always a good thing.

The Washington Solution: In 2008, unscrupulous people are encouraging people to buy more house than they can afford. The government is going along with it and even providing tricky tools to help them do it. The treatment for a borrowing binge hangover is a hair of the dog that bit you.

I wonder how much it costs the IRS to keep track of who got this credit up to 15 years ago. I wish the government would work out how much administration plus interest costs and just pay it directly to the special interests. Leave innocent people out of it.

The federal government is helping unscrupulous people suck money from the poor.