Integrated Man

Free the Fed

This may be the only time in my natural life that I will ever agree with Mitt Romney.  It proves that he's human; even he can't be wrong all the time.  I just hope that he doesn't reverse himself in the name of consistency. 

So what am I talking about?  Yesterday Mitt urged the Fed NOT to apply more stimulus to the supine economy.  And why is he right? Because the responsibility to resurrect the economy at this point is not with Ben Bernanke and the Fed, or with President Obama and the Executive Branch, but with a Congress that as been too timid on one side of the aisle and too ignorant on the other side...in both houses.

It's All Illusion

Image is everything.  Or at least 99%, or so it seems.

It obviously worked for Madoff, but the sad truth seems to be that Madoff was just a petty thief compared to our more accomplished operators.

In 2008, September 18, my blog  explored the conditions that have eroded our trust in everything, just as the true dimensions of our financial crisis were beginning to manifest.  We are now three years down the road from those momentous events. And the echos persist.

The False Economics of Fossil Fuels

Reading Bernard Weinstein’s letter in the Time’s November 2 edition, I am reminded that we continue to fail to grasp the failure of our supposedly 'free market system' to effectively price key commodities, if that is in fact its intent, and not merely a philosophical mantra.  Let us begin with the first sentence of Mr. Weinstein's letter:

 “As “Future of Solar and Wind Power May Hinge on Federal Aid” (Energy, special section, Oct. 26) points out, the renewable power industry has become addicted to federal subsidies and probably can’t stand on its own without them.”

We can acknowledge that the renewable energy industry is addicted to federal subsidies at present and for the foreseeable future.  But let us apply Mr. Weinstein’s metaphor of addiction fairly.  Society is addicted to fossil fuel dependent energy.  If we are the junkies, Big Oil and Coal are the pushers.

 

Obama Was Right on Health Care

Obama was right to make health care his number 1.2 priority (along with propping up the financial system long enough for it to a) sort itself out or b) subject it to more responsible regulation (neither of which have occurred to date). I recognize that this flies in the face of conventional wisdom as proffered in the business and political punditry. Whatever.

But if you believe that the strength of the private sector, the preservation of jobs, and the control of the long term trajectory of the public debt at all levels are critical, then I would argue unequivocally that health care was and is the single most proactive strategic initiative that Obama could pursue.

Warren Buffett's Last Mission

Dear Mr. Buffett

You don't know me from Adam. I'm utterly inconsequential in the scheme of things.  So I hope you'll forgive my audacity in proposing one last mission in the public interest before you depart this existence. 

I am emboldened by your prior efforts to encourage your peer group to pledge their wealth to the public good, and more recently to call attention to yourself as a justification for the nation to call upon the rich to carry their fair share of the tax burden.   But there is one more mission in which your unique position and skills at unadorned truth-telling might yet have critical impact.   Your mission, if you choose to accept it, is to inspire the business and investment titans of the US economy to get off their fear or apathy and earn their money by taking risks on the US economic revival.  Only you can do this.  No one else in the business community has your stature and ethical capital; and beyond the business community the President and Chairman of the Fed are a distant second and third.

Strategic Reserves, Strategic Reservations

They pulled the trigger.  Was it a bang?  Or a Pop? More importantly, will the projectile of a joint release from the IEA members' strategic petroleum reserves prove to be a ricochet that produces a self-inflicted wound?

Much of the immediate commentary in the business press since yesterday's announcement has been superficial and unenlightening. 

Oil Prices: Blame it (and everything else) on the Algorithms

Those darned Algorithms! Turn your back and they'll raise unmitigated hell.  Take oil for example. CNBC on-line carries the article: "Algorithms, not demand, driving oil prices sky high?" 

My first question is: Why single out oil?  The equity markets seem to be on auto pilot as well.  Many reasonable analysts and economists without a stock to sell or an apparent axe to grind have argued that stocks are seriously inflated. The self-styled prophets of profits have ingeniously concocted a double barreled deceit, suggesting that:

-    oil prices are rising because of heightened market risks; but

-    stock prices are rising because they've already 'discounted the risks'.  That is, the stock market would be yet higher if not for those pesky energy risk scenarios in Libya, Yemen, Bahrain, Nigeria, Iraq, Japan, Australia,...

Got Reality? Climate Change, Energy and Public Policy

And so it begins, the unraveling of 'concerted ignorance' by random pulses of reality.

Two interesting articles appeared in the online edition of The Economist last week. The first, Why Don't Americans Believe in Global Warming? sought to understand why the U.S. is persistent in failing to come to grips with the reality of Climate Change. 

The second, Are Economists Erring on Climate Change?  ,explored the discomfort of economists in coming to grips with an issue that defies the logic and comfort of their statistical foxholes.

SOTU: The speech I wish Obama had given

President Obama's State of the Union Speech had many promising elements, but ultimately failed when it desperately needed to succeed. It's primary failure was in obsessing on a future too vague. Its corollary failure was in presenting energy investment as a virtue rather than an existential necessity. He could have done better, because no doubt he knows better.  And in the context of SOTU, Carol Browner's departure seems hardly a surprise.

What follows is the speech I wish he had given:

Got Energy? The State of the Union

Today's Politico carries a piece by Darren Samuelsohn and Darren Goode entitled "President Obama Pressured to keep energy focus in State of the Union Address". I applaud the basic thrust of the recommendation, except that the premises for its propagation grossly understate the urgency of the issue. At the risk of repeating themes of previous blogs, it is worth yet again belaboring a few points.

Specifically, it's not just about creating jobs through a 'clean energy' economy. And it's not just about assuring our energy security against the whims of OPEC. It's about the fact that the very basis of our economy runs on energy resources which, from whatever sources, are depleting faster than our capacity to replace them. Unless we come together on that fundamental understanding, we will all hit the wall together in an energy crisis worse than the one we now face in the collapse of Capitalism's economic calculus.