MG&E Solar Systems

These engineers are out there getting nice views of Madison and saving the environment. They are right on the money about how a bunch of little things (solar panels don't produce that much individually) add up to significant savings.



One of the engineers is TJ, which is no relation to CJ.

I am really glad to see MG&E promoting renewable energy (RE) so aggressively. In the long run it would be nice to see most of Wisconsin's power come from RE. It only costs around 25% more to sign up for all RE electricity. Why not move everyone except for the poor to RE and keep the non-renewable plants around for peak demand and time when the wind's not blowing and the sun's not shining? Maybe power lines will eventually communicate with appliances to ask if they could postpone high-demand activities until more power is available. There are lot more pennies of CO2 to be squeezed out of our energy supply.

Credit Score Bliss

I have blogged in the past about how the value (to individuals) of credit scoring is mostly a myth that gets persists because it benefits banks.

Here is some unintentional humor from a company selling the service of finding your credit score. To promote their service they picked a stock photo of two young people looking excitedly at a computer. It was probably taken with the idea that wedding planners would buy it. It could be used to convey “OMG, this is perfect place to get married,” “OMG, I got an offer from my dream job,” or “OMG, they’re going to publish my book.”

(Click for a larger view)

OMG, here’s a number summarizing how much financial institutions like me! And here are three good points to remember:
1. Pay your debts on time.
2. Have a variety of types of debt.
3. Stay in debt. (Or at least keep the account open.)

This is obviously just a bad ad, but it unintentionally parodies a self-serving point of view promoted by financial institutions.

We Produce Less Crap Than a Few Years Ago

A Trashed Economy Foretold, March 14, 2009 Washington Post

In an extravagantly wasteful society that typically puts 254 million tons of unwanted stuff at the curb to be thrown away each year, landfill managers say they knew something was amiss in the economy when they saw trash levels start steadily dropping last year. Now, some are reporting declines as sharp as 30 percent.

The amount of crap we produce has decreased. Trash is correlated with GDP, but it doesn't have to be as tightly correlated as we usually think. We could produce stuff that doesn't involve trash, just as we can produce stuff that doesn't involve carbon emissions.

While we are doing everything possible to get production back up, we should try to see if we can get that production to come in a more environmentally friendly form. We might also stop to question what exactly we're trying to accomplish with making more stuff. Why do people say they're "scared" they won't get more? What things do we wish we could product but aren't producing? The answer has to be something more than "well the valuation models of my entire portfolio are based on ever increasing production, so I need people to consume as much as possible."

There are tangible things we like to do, some of which require economic production / consumption. Doing things we enjoy is what matters and producing things is just a means to that end. When we we want to produce stuff because of valuation models of businesses we own shares of, something is wrong with our system.

Chinese Prime Minister Worried About US Paying Its Debts

This is the second time China has sought assurances that US is good for all the money China is lending. China's fears that US will allow inflation to erode the value of its Treasuries are reasonable.

If faith in the dollar and therefore the US Treasury falters, projects planned as part of the stimulus package may never happen.

My question is at what point being called into the "banker's office" (the banker being a metaphor for the anti-democratic country lending us money) about our spending will lead to a populist backlash. There's plenty of jingoists who are upset about people even speculating about the motives of anti-democratic countries. They're upset by their kids learning their languages. When will they come out and get all fired up about this lending arrangement, in which China keeps asking for assurances?

EE Times on IBM's Project Match

IBM has launched a program to find low-wage jobs in low-wage locations for its workers laid off from US locations.

The project would require U.S. workers to relocate to low-wage country like India and accept a salary at the going rate for the area -- EETimes Article "Offshoring Backlash Rises as Layoffs Mount"(Click on image above for larger view)

This seems like economic inefficiency. You ask people to move to a place where things are cheaper, hoping to export things they produce to a place where things are more expensive. The more that happens, though, the more things equalize and in the process shake up the economies of the two places. It also wastes resources to have people and goods needless moving around because of a line on a map.

I'm not saying people should not trade across borders or that borders should be completely ignored. Technology is moving us in the general direction of free trade whether we like it or not. Hopefully it will be a good thing. Eventually the idea of nation states putting effort into maintaining standing armies and armaments industries to defend themselves against one another may seem ancient. That could happen in less than 100 years.

In the meantime, however, we need to put a little thought into this. If the process of globalization isn't managed right, there will be a populist backlash that will be even more inefficient than people moving house across borders for pricing reasons.

What Do We Want out of a Gov't Healthcare Initiative?

Obama vowed today to promote improvements in the healthcare system.

There are three reasons I know of for the government to get involved in healthcare. Here there are from best to worst, according to my humble opinion:

• Transfer of money to the poor – If you want to help the poor, one way to do it is to subsidize their healthcare. This discourages them from waiting till a health problem becomes severe before seeking treatment. It's better way to transfer value to the poor than simply giving them money, which could be put to bad uses.
• Spreading the risk – We have expensive technologies to treat illnesses of those who lost the genetic lottery of health and sickness. Some people think it’s fair to spread the risk of being born with serious illnesses or predisposition to illness by spreading the cost among all healthcare consumers. Insurance currently does this job, but it will be harder as medical technologies get better at predicting who will get sick long before it happens. If genetic testing gets very good at predicting infants’ future adult illnesses, insurance won’t be able to spread that risk. We will need a gov’t system, if we want that risk spread out.
• Managing middle-class people’s lives – Many people with decent income don’t like to manage their health insurance. They can handle their car/life/disability/home owners’ insurance, but they're loath to shop among health insurance providers, select one, and write them checks. They want someone else to deal with this. (IMHO government is doing them a grave disservice by offering to manage otherwise competent people’s lives for them.)

Any program needs to be clear on to what extent it’s trying to accomplish each of these. The job will be hard because so many people disagree. Ideologically, I like transferring money to the poor; I believe in gov’t spreading risk as necessary; and I think managing middle-class lives is a disgrace to American values. People of good conscience disagree.

This issue will be tough sledding because the problem is difficult and the solution touches ideological issues regarding the role of government. Obama has his work cut out for him.

Fed Launches Program to Create 1 Trillion in New Debt

The government can’t stop promoting more debt as part of the solution to the financial crisis. If people didn’t have consumer debt, however, the crisis wouldn’t be a crisis.

In this AP story, Fed launches new $200B consumer credit program, the article claims it’s hard to find lenders these days:

Under the program, the Fed will buy securities backed by different types of debt, including credit card, auto, student and small business loans. The credit crunch — the worst since the 1930s — has made it much harder for people to obtain such financing, and those that do can be socked with high rates.

It’s probably easier to borrow money in those ways than any time from the end of World War II to 1980. It’s harder than it was during the last decade to obtain such financing but not hard by historical standards. Yet the Federal Reserve is lending $200B to investors who are willing to put their own money along with this TALF money into securities backed by consumer debt. The goal is one trillion dollars of new debt.

This is a tough problem because economic theory says it’s good to go into debt during a recession. It evens out the economic cycle by putting unused production capacity to work. Without such stimulus, some of the means of production lie dormant and therefore waste time and resources that could be used to produce stuff.

There is a much bigger issue, however, than the economic cycle. Our entire economy is structured in such a way that fluctuations in asset prices or a slight decline in GDP is a near catastrophe.

I am taking the radical position that restructuring our society to handle economic fluctuations is more important than stabilizing the economic cycle. I am willing to accept some lost production and other market inefficiencies if it’s part of the plan to prevent the next economic cycle from being a crisis.