It's The Economy, STUPID!.....

[FOTD]

I predict that the United States will officially slip into full-blown depression on January 21, 2009, and it will all be Obama's fault.

It will not be a depression for all or like the one in 1929. It will affect those who make under $50,000 a year.  It will not include those whose net worth is greater than 2 million. But it will be harsh and hurt those who thought they might retire by 65. Inflation is the big shoe headed towards our donkey on the backside of a crash in fianacial paper that will bring down many banks.

Remember, this will all be Obama's fault. Nothing to this point would indicate the Busheviks did anything wrong.

[Conan71]

Anyone else notice how much higher their average grocery tab is this year vs. last year?

What is going to slowly strangle the under $50K family is envronmentalism which is dictating things like ethanol, and spiraling oil prices.  Ethanol is not the antidote to foreign oil dependence.  $5.00 per bushel corn is bad news for everyone- especially families under the $50K threshold.  That my friend, is a disaster waiting to happen.

One of my customers is a free range dairy up NE of Kansas City.  They are selling off their beef herds as grain prices are too costly.  I'm sincerely concerned their whole business could be gone in a few years if we continue this insane farm subsidy that ethanol is.

We are producing more ethanol, yet oil is over $100 per bbl- partially due to exchange rates, partially due to the fact that ethanol is a complete folly.  It also keeps natural gas demand and prices higher, therefore increasing winter heating costs to us all.  

My Dad's family was from northern Nebraska- deep in the heart of corn country and we had farms up there.  I certainly shouldn't crap on the industry, but honestly ethanol isn't benefitting small family farms near as much as large corporate producers.  It sure as hell isn't benefitting the average work-a-day consumer.

[cannon_fodder]

^+1

If my gas bill starts getting too high I can cut back on travel or car pool.  Now that my milk is $3.50 a gallon and even soy milk has gone up just as much I'm just screwed.  

Add to that the fact that returned energy from ethanol is as little 20% in most studies or even negative (highest I have heard was 60%). Add to that the cumulative C02 released from its production is higher than just burning oil. Add the fact that without massive subsidies it would not be a large economic winner.

And does it help small farmers?  For sure.   Anything that raises grain prices and land values helps them.  It also helps large corporate farms, oil companies (who inject ethanol into gas to buttress margins), pipeline companies (who have to transport it separately and are building new pipes to do so), ethanol producing companies and many other titans of industry.  

All at the expense of everyone else.  If all we cared about was artificially increases the earnings of a favored group why not add an education surcharge that goes to teachers - that EVERYONE in America has to pay.  Frankly, policies to tax everyone else to explicitly bennefit another favored group are usually misdirected.

Corn based ethanol is a long term loser and most everyone knows it.  That land is too valuable for other purposes for long term energy production or for use on the scale we would really need to dent our energy needs.  Nice try, but it will not work long term so ween the industry off the tit before it gets built in and we're stuck with it for a generation or more.

[we vs us]

Food costs are also linked to oil prices -- for transportation, fertilizer, etc -- so it isn't just the conversion of food crops to fuel crops that's driving the cost up.

While I agree that ethanol is the worst of the good solutions, it's still addressing a real problem.  The subsidy is poorly targetted, yes, but that doesn't mean that environmentalism generally is a dud.  Don't toss the baby out with the bathwater.  

Flip the subsidy to switchgrass and we could have much better performing ethanol within a year or two, and at least one level of pressure off our food supply.  

[cannon_fodder]

You'll note I specified "corn based ethanol" in my mini rant.  []  Switchgrass or other crops grown on sub arable soil that are also perennial plants and require less if any real fertilizers would be miles ahead of intensive farming of annuals.

[we vs us]

quote:Originally posted by cannon_fodder

You'll note I specified "corn based ethanol" in my mini rant.  []  Switchgrass or other crops grown on sub arable soil that are also perennial plants and require less if any real fertilizers would be miles ahead of intensive farming of annuals.

Yep, hence my agreement.  I was replying to Conan, too, who seemed to want to say that because corn ethanol was a lose-lose proposition, environmentalism is useless altogether.  

I really don't get why climate change isn't viewed as a monumental opportunity by more conservative but business minded folks.  If we chose to take a leadership role and actively embrace the climate change meme (whether or not it's 100% provable, even!), we come off as global heroes AND can provide our economy with a compelling platform for future innovation.  Instead of a tepid hedging of bets (which is the Bush administration MO) we could simultaneously legitimize a huge worlwide sector (alternative energy) and focus ourselves on it.  It's also a compelling framework to hang a certain level of reform on.  

Whether climate change is provable or not is largely beside the point.  It's pretty obvious that a good portion of the world believes it's true.  You know what that is?  It's a market for environmental solutions.  We could fight against that market -- a market that is militantly looking for suitable products, by the way -- and look like global douchebags, or we could encourage the market, exploit it, and come out smelling like roses.  

Really, the rise of environmentalism is a great chance for us to seize a rapidly coalescing lever of power.  Why no one gets that in our government is completely beyond me.

[Double A]

But I thought the economy was doing just fine according to Conan and Cannon Fodder? Hate to say I told you neocon morons so. BTW, we are in a recession. Face the facts, fools.

[rwarn17588]

<Conan wrote:

I certainly shouldn't crap on the industry, but honestly ethanol isn't benefitting small family farms near as much as large corporate producers.

<end clip>

Oh, those high corn prices are certainly benefiting the small family farms that grow corn. And Lawdy, there's scads of them in the Midwest.

Farmers, large and small, are rolling in the money back in my home base of Illinois. If you are yielding 300 bushels an acre (and many of them were) at $3.40 a bushel, you're doing great. It's been an amazing year.

The agricultural industry is pretty diverse. If high prices hurt one sector, they will greatly benefit another sector.

[Conan71]

quote:Originally posted by we vs us

quote:Originally posted by cannon_fodder

You'll note I specified "corn based ethanol" in my mini rant.  []  Switchgrass or other crops grown on sub arable soil that are also perennial plants and require less if any real fertilizers would be miles ahead of intensive farming of annuals.

Yep, hence my agreement.  I was replying to Conan, too, who seemed to want to say that because corn ethanol was a lose-lose proposition, environmentalism is useless altogether.  

I really don't get why climate change isn't viewed as a monumental opportunity by more conservative but business minded folks.  If we chose to take a leadership role and actively embrace the climate change meme (whether or not it's 100% provable, even!), we come off as global heroes AND can provide our economy with a compelling platform for future innovation.  Instead of a tepid hedging of bets (which is the Bush administration MO) we could simultaneously legitimize a huge worlwide sector (alternative energy) and focus ourselves on it.  It's also a compelling framework to hang a certain level of reform on.  

Whether climate change is provable or not is largely beside the point.  It's pretty obvious that a good portion of the world believes it's true.  You know what that is?  It's a market for environmental solutions.  We could fight against that market -- a market that is militantly looking for suitable products, by the way -- and look like global douchebags, or we could encourage the market, exploit it, and come out smelling like roses.  

Really, the rise of environmentalism is a great chance for us to seize a rapidly coalescing lever of power.  Why no one gets that in our government is completely beyond me.

I appreciate your critical eye.  I was making a quick post and supply-chain fuel usage in food and durable goods process and transportation is not lost on me- knowing a little about energy and Btu's is largely how I make a living.  I talk to people every day about existing fuel sources and viable alternatives.

The EPA has placed regulations on auto makers which is passed on to the consumer.  They make regs which are passed on to the refiners who pass those costs on to the consumer.  They restrict domestic oil production which would lower transportation costs and reduce our need for oil on the world trade markets.

The jury is still out on switchgrass.  It's got really good media buzz, but there's some whispers of some negative by-products in breaking down the cellulose for sugars.

I believe our government has exploited environmentalism quite well thus far.  You have to be careful in how quick you phase in things like fuel consumption caps on cars, emissions limits, carbon taxes etc.  Those are things which come with costs which hurt the under $50K families the worst.  Every single corporate tax, penalty, or compliance is nothing more than a tax on the end-user, that is who eventually pays for it.  

It also does not help when people like Al Gore seize a movement and come up with a lot of fear-mongering tactics to commercially exploit the and corner the environment.  That creates cynicism and doubt.  

Corporate America is also not entirely smart when it comes to environmentalism.  One quick example:

Phillips Petroleum used to have a plastic recycling company near 55th & Garnett.  Cool idea.  As I recall, the majority of the HDPE they were recycling was from milk jugs and detergent jugs.  Most of it came from the east coast, not locally.  Ship goods 1400 miles for recycling, doesn't make a lot of sense.

[Conan71]

quote:Originally posted by rwarn17588

<Conan wrote:

I certainly shouldn't crap on the industry, but honestly ethanol isn't benefitting small family farms near as much as large corporate producers.

<end clip>

Oh, those high corn prices are certainly benefiting the small family farms that grow corn. And Lawdy, there's scads of them in the Midwest.

Farmers, large and small, are rolling in the money back in my home base of Illinois. If you are yielding 300 bushels an acre (and many of them were) at $3.40 a bushel, you're doing great. It's been an amazing year.

The agricultural industry is pretty diverse. If high prices hurt one sector, they will greatly benefit another sector.

No doubt the little guys are benefitting.  Again, my hasty posting.  You know as well as I do there are fewer small farmers than there were 15 to 20 years ago.

I'm seriously regretting getting rid of our farmland, but when land prices rebounded after the Soviet grain embargo, we figured we'd better get out while the getting was good.  Whoda thunk it?

[we vs us]

quote:Originally posted by Conan71
It also does not help when people like Al Gore seize a movement and come up with a lot of fear-mongering tactics to commercially exploit the and corner the environment.  That creates cynicism and doubt.  

Well, that's one side of the coin.  The other side is he's also the best Climate Change adman out there.  He's a one man marketing machine. If we posit that the Green market exists -- which it definitely does -- he's only enhancing demand for green products.

Seriously.  It's a HUGE opportunity for our country and our economy.  

quote:Corporate America is also not entirely smart when it comes to environmentalism.  One quick example:

Phillips Petroleum used to have a plastic recycling company near 55th & Garnett.  Cool idea.  As I recall, the majority of the HDPE they were recycling was from milk jugs and detergent jugs.  Most of it came from the east coast, not locally.  Ship goods 1400 miles for recycling, doesn't make a lot of sense.

Point taken, but corporate America is also exceptionally limber, and knows an opportunity when it sees it.  The first article linked in this thread is a great example of just that  (hat tip to akupetsky).  

I'm sad that our government has to be dragged along behind this trend, rather then leading it.  It's a winner for more than just the tree-huggers, that's for sure, but it takes an adminstration with some imagination and leadership to see it, and unfortunately, that ain't the adminstration we got.

[Conan71]

quote:Originally posted by we vs us

quote:Originally posted by Conan71
It also does not help when people like Al Gore seize a movement and come up with a lot of fear-mongering tactics to commercially exploit the and corner the environment.  That creates cynicism and doubt.  

Well, that's one side of the coin.  The other side is he's also the best Climate Change adman out there.  He's a one man marketing machine. If we posit that the Green market exists -- which it definitely does -- he's only enhancing demand for green products.

Seriously.  It's a HUGE opportunity for our country and our economy.  

quote:Corporate America is also not entirely smart when it comes to environmentalism.  One quick example:

Phillips Petroleum used to have a plastic recycling company near 55th & Garnett.  Cool idea.  As I recall, the majority of the HDPE they were recycling was from milk jugs and detergent jugs.  Most of it came from the east coast, not locally.  Ship goods 1400 miles for recycling, doesn't make a lot of sense.

Point taken, but corporate America is also exceptionally limber, and knows an opportunity when it sees it.  The first article linked in this thread is a great example of just that  (hat tip to akupetsky).  

I'm sad that our government has to be dragged along behind this trend, rather then leading it.  It's a winner for more than just the tree-huggers, that's for sure, but it takes an adminstration with some imagination and leadership to see it, and unfortunately, that ain't the adminstration we got.

Gore isn't climate change's adman, con-man is more like it. []

Regardless who winds up in the White House expect more government evolution on environmentalism.  It's topical and it's catching.

[inteller]

just a little blurb from the latest beige book report for district 10, our district:

"Energy
Energy activity continued to expand at a solid pace in late January and February. Most contacts reported steady or increased drilling activity, and producers' expectations for future exploration rose from the last survey period. Several firms reported that shortages of labor continued to constrain drilling activity, but other companies said investments in newer drilling technologies has made recruiting and retaining workers less of an issue. Capital spending plans continued to be strong, and credit conditions were still reported as positive in the industry, with most contacts citing strong cash flows and ample financing opportunities."

that's my sector.  and I can tell you that is accurate.  we are happy people.

[FOTD]

quote:Originally posted by inteller

just a little blurb from the latest beige book report for district 10, our district:

"Energy
Energy activity continued to expand at a solid pace in late January and February. Most contacts reported steady or increased drilling activity, and producers' expectations for future exploration rose from the last survey period. Several firms reported that shortages of labor continued to constrain drilling activity, but other companies said investments in newer drilling technologies has made recruiting and retaining workers less of an issue. Capital spending plans continued to be strong, and credit conditions were still reported as positive in the industry, with most contacts citing strong cash flows and ample financing opportunities."

that's my sector.  and I can tell you that is accurate.  we are happy people.

Me too to a degree but I think Big Oil needs to be hit with a windfall profit tax.

Keep in mind with reccesion comes lowering the demand. Look for oil to back off after 1-21-09. Just a hunch. $50 a barrel?

I hope we will reach bottom by July! The market is tough right now. No wonder. 2 Trillion on a war for nothing.

[Conan71]

quote:Originally posted by FOTD

quote:Originally posted by inteller

just a little blurb from the latest beige book report for district 10, our district:

"Energy
Energy activity continued to expand at a solid pace in late January and February. Most contacts reported steady or increased drilling activity, and producers' expectations for future exploration rose from the last survey period. Several firms reported that shortages of labor continued to constrain drilling activity, but other companies said investments in newer drilling technologies has made recruiting and retaining workers less of an issue. Capital spending plans continued to be strong, and credit conditions were still reported as positive in the industry, with most contacts citing strong cash flows and ample financing opportunities."

that's my sector.  and I can tell you that is accurate.  we are happy people.

Me too to a degree but I think Big Oil needs to be hit with a windfall profit tax.

Keep in mind with reccesion comes lowering the demand. Look for oil to back off after 1-21-09. Just a hunch. $50 a barrel?

I hope we will reach bottom by July! The market is tough right now. No wonder. 2 Trillion on a war for nothing.

I highly recommend investing in big oil for at least the next 6 mos to a year.  

Windfall profit tax is for ****ies.  As long as big oil has the money to reinvest, it's a good thing for the economy.  Especially manufacturers in the Tulsa area.  I've not seen solid industry stats, but I do believe capital investment in new drilling and processing equipment is likely back at early 1980's levels.  All this cash is making its way back into the economy and is being re-taxed on the way down as it is.  

The gov't doesn't need more money, they need to figure out how to get by on less.