Tuesday, November 10, 2009

Post Monday Linkages


Kunstler discusses the eventual collapse of the Rube-Goldberg machinery of all American institutions and the potential outcomes:
Reality unfolds emergently, and this ought to interest us. For instance, I have maintained for many years that we are approaching the twilight of the automobile age - and the implications of this for daily life in the USA are pretty large. For a long time, I had assumed that this change of circumstances would proceed from our problems with the oil supply. But reality is sly. It has thrown two new plot twists into the story lately. America's romance with cars may not founder just on the fuel supply question. It now appears that our problems with capital are so severe that far fewer people will be able to borrow money from banks to buy cars at the rate, and in the way, that the system has been organized to depend on. Our problems with capital are also depriving us of the ability to pay to fix the hypercomplex system of county roads, interstate highways, and even city streets that make motoring possible. What will we do?
He goes on...
For now, a cashless government gives out cash-for-clunkers, which is basically a self-esteem building program designed to make the government feel better about itself because it is ostensibly taking 11-miles-per-gallon cars off the road and replacing them with 27-miles-per-gallon cars, thus forestalling scary problems with climate change.
Except a new report suggests the Cash for Clunkers program hasn't been nearly as successful as those numbers imply. (I don't know if those are pulled from thin air by JHK or were goals set forth by the administration.) Notice this report has nothing to do with the $24K claim that is the main talking point for the bickering:
The single most common swap — which occurred more than 8,200 times — involved Ford F-150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F-150s. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.
Andrew Sullivan opens up an IEA report on peak oil.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

Thankfully, there is growing support for legislation to end this "too big to fail" nonsense.
"The lesson of Lehman should not be that the government should have prevented its failure," David Einhorn, head of hedge fund Greenlight Capital, said in a recent speech. "The lesson of Lehman should be that Lehman should not have existed at a scale that allowed it to jeopardize the financial system."
All that matters here, is that anything that is "too big to fail" is SO big that it equates to an agglomeration of wealth and power that they (singular individuals or the corporations they represent) are above any justice system and can either bribe or threaten the very foundations this country was founded upon. Once again, as soon as something approaches "too big to fail" it immediately means that it is "too big to exist."
And more from the BackAsswards land of bizarro Keynesianism and stupid or corrupt economic development:
But it was the odd story of a parking structure in Columbia Heights, built by the city with $40 million of taxpayers' money, that may be the most pertinent data point in the future of parking. Here was a classic case of how good intentions can get fouled up with old-fashioned civic extortion. The retailer Target demanded the garage as a condition of moving to the city. The city built it. But something strange happened along the way: The expected hordes of drivers didn't materialize. They came by foot, by Metro, but not in cars, at least not in the numbers projected, and now the lot is losing money, costing the city some $100,000 per month.
Lesson: it rarely pays to bend over for any business, let alone one with a suburban business model in an urban setting.