Sunday, June 08, 2008

Teddy Roosevelt’s Advice, Our Energy Disaster, and Parallel Universes

When asked the basic rule behind accomplishing an important task Teddy Roosevelt gave the following advice.

“Do what you can, with what you have, where you are.”

If only we had applied this advice in the early nineteen eighties, when the clouds of the forthcoming energy disaster first gathered. Can you imagine how it would have changed history if we had not placed the responsibility of our energy future into the hands of the oil companies? However, bad decisions that do not consider the future almost always lead to serious consequences. In this case, the United States is now suffering the consequences in spades.

The possibility of parallel universes is under consideration by many scientists. If so, perhaps there is a universe where we did push forward with an aggressive energy program and a mind to the future. The people living in that universe now enjoy a balanced energy program where there are multiple biotech and petroleum derived blends of fuels available. The transportation vehicles can run on any blend so the fuels are all competing with each other in a free market. The infrastructure to support this flexibility has long been in place. The disaster of a single fuel type and a few large companies completely controlling the market and prices ended years ago. The mergers that led to a few very large companies dedicated only to petroleum fuels never occurred. OPEC must now work very hard to sell their products in competition with the other sources of fuels.

The crippling transfer of dollars from the US economy to unfriendly companies also never happened. The United States, as a leader in biotechnology and agriculture, is enjoying a boom period that could not be imagined in 1981.

Unfortunately, we do not have a way of moving into that parallel universe at this time. However, let us apply Teddy Roosevelt’s advice right now and maybe 25 years from now we can pull alongside.

Monday, March 31, 2008

Are We in a Recession? Ask Your Local Bartender.

Everyday the info-babes of CNBC ask each of their big shot financial guests a single question. “Are we in a recession?” Some of the big shot financial guests reply “yes” and some reply “no”. Some enter into long academic descriptions of what constitutes a recession. .

One thing of note-all of those guests opining on whether we are in a recession are high net worth individuals. High net worth individuals lack an important sensation that is necessary to detect a recession--- real pain! Not the irritating pain that you feel when your find that your portfolio is down 10%. I am talking real pain-the kind you feel when you do not know what you are going to do. The kind of pain that is accompanied by panic. When large numbers of hard working citizens feel that kind of pain we are in a recession.

If the info-babes and their guests had the capabilities to detect real pain they would learn a lot. The fact is that large numbers of hard working citizens are feeling real pain and we are in a recession.

The most strategically place locations to detect real pain are not on Wall Street. They are in the thousands of neighborhood bars scattered throughout the country. Here are a few reflections from one singe location. They are reported through the eyes and ears of a few local bartenders who are facing rows of empty seats once crowded with workers dropping by for a social hour after work.

Answers to the universal greeting “How is it going?”

“Slow, very slow”
“I have two days of work next week, You got anything for me?”
“We had three customers all day”
“I made all of $45 last night”
“I have not sold a property for three months”.
“I just don’t have work for my crew”

The politics have made a very sharp turn. In a county that went strongly for Bush in 2004 it is now a blowout for Obama. He is saying what everyone believes-that these problems are due to poor management and an administration that is in the bag for the elite. High gasoline prices, war in Iraq, credit crunch, ridiculous executive salaries, and toxic toys from exported jobs, make “tax and spend”, and “cut and run” not very scary.

But these people don’t watch CNBC. They do not realize that this is how the “free market” works. Ask the info-babes.