Wednesday, July 28, 2010


When the incentives are such that it pushes you in the wrong direction, you can take a step back and say: "No this isn't right" and stop & change course. But when you see that many are being rewarded for complicity, it makes it all the more tougher the next time. That knaws at your conscience. Over time, diffusion of responsiblilty in a bureacratic environment makes it easy to rationalize doing something whether right/wrong/borderline. And that gives rise to such events as recent bank failures, malfeasance, oil spills, etc. Even so, many would agree that some bad actors got off scottfree and even rewarded with bonuses.

Yea, yea...Life's messed up...big deal... right?

Shirley Sherrod, stood before an audience and gave an honest assessment of her past experiences with racism, how it affected her, and how she overcame it. And her remarks were taken out of context resulting in a political whirlwind. She was, in short, being persecuted for her honesty. Just about everyone knows the story about how snap judgements were being made, etc... lack of due process... and on and on...

While all of this was going on a few things came to mind. They're disjointed thoughts that you can link yourself. Here they are:
1) When someone is being honest about something, take a moment to ensure you're not persecuting them for their honesty. There is a difference between a well meant shortcoming and blatant malfeasance. Also keep in mind, we make it too easy to lie & cheat vs stand tall and tell the truth. I have found that telling the truth is the most disarming way to diffuse a situation. In the end, we are humans continually striving for perfection and continually falling short of it.

2) Gone are the days when a Captain goes down with his ship. And his biggest care is against damage to the ship, cargo, & harm to his crew. Gone are the days... Today, one can run a ship aground, hurt some people in the process and walk off that ship and go to another job with minimal consequences to deal with... In my youth, that didn't exist even as a least that I was aware at the time.

3) When I was a Plebe at USNA, we used to read inspiring citation stories about brave warriors... you'd hear phrases like: "going above and beyond the call of duty," "reflecting good credit upon him/herself, unit, ...," and so many more! A few of my classmates exemplified this in Iraq & Afghanistan. Why can't we celebrate this more?! Why do we have to tear each other down and cast aspersions upon one another?! Why do we have to talk so much about all these negative stories?! Why?!

4) I've been exposed to many types of injustices. And I've been exposed to very, very, very, very, very, very mild forms of racism a couple of times. Of all the forms of injustices I've experienced, it is one of the most unhinging experiences. I lost all mental coherency and shut down. Don't do that to a person. It's undignified, manipulative, and unfair.

5) Until we alter the course, we'll keep heading straight for where we're going... DO YOU WANT THAT TO BE SO?

Sunday, July 25, 2010

Companies pile up cash but remain hesitant to add jobs

If corporations are sitting on so much money, why aren't they hiring more workers?

The answer to that question has become a political flash point between the White House and big business groups such as the U.S. Chamber of Commerce, which held a jobs summit Wednesday and accused the Obama administration of dumping regulations on businesses. That has created an environment of "uncertainty," which is causing firms to hold back on hiring as the unemployment rate has hovered near 10 percent, the Chamber said.

In my industry, we need the US Congress to act on legislation that will create the certainty required for investment flows that will aid in driving growth. An excerpt from Tom Friedman's NY Times Op Ed for today illustrates this sentiment:

...Lew Hay, the C.E.O. of NextEra Energy, which owns Florida Power & Light, one of the nation’s biggest utilities, e-mailed to say that if the Senate would set a price on carbon and requirements for renewal energy, utilities like his would have the price certainty they need to make the big next-generation investments, including nuclear. “If we invest an additional $3 billion a year or so on clean energy, that’s roughly 50,000 jobs over the next five years,” said Hay...

What's interesting about how the Chamber is projecting it's argument, is that it is focusing primarily on the Obama administration. However, their aim (in this instance) should also be at the US Congress. And more pointedly at those who are blocking this legislation in various ways. They're focusing squarely on one person/group (President/Administration) when there are more who are culpable for inaction.

At the end of the day, the US Government doesn't have the kind of control over the economy most think it does. And the main reason corporations are sitting on cash doesn't have as much to do with the uncertainty of current government actions as they're leading you to believe. This argument is mostly about political posturing by a group that disagrees with the current ruling party's policies. There's nothing wrong with disagreement, but surely they could point that out and maintain some semblance of integrity.

Taking a broader view: How is this any different from other areas of the economy that needs to be addressed? I think it's disingenuous to focus on only one person or group. And most agree that the politics of today -- on both sides of the political spectrum -- leaves much to be desired.

So, instead of playing the blame game and all this disgusting back-and-forth banter, lets get up and do the right thing. Not because we could demand it of ourselves. But because it's the right thing to do.

Friday, July 23, 2010

Pass A Clean Energy Plan Today!

Brigadier General Steven Anderson (Ret.), Chief of Logistics in Iraq under General David Petraeus, calls for the U.S. Senate to pass a Clean Energy plan. He says, "Our troops are getting killed moving fuel we wouldn't need if our military was more efficient -- and our enemies know we're hooked on their oil?. That's why breaking our addiction must not only be a military priority, but America's mission, and why the Senate needs to pass a clean energy climate plan."

Anderson's call for more energy independence and a move off of fossil fuels is the latest in a steady stream of both active and retired military calling for a clean energy revolution.

Monday, July 12, 2010

Energy-Saving Measures Can Add $20 of Home Value for Every $1 of Yearly Energy Cost Savings

When it comes to home value, a solar power system may be your best “remodel” option. Based on a recent study by ICF Consulting (funded by HUD and the EPA) energy-saving measures such as solar can add $20 of home value for every $1 of yearly energy cost savings.

Find these articles here & here.

That means, for every $1,000 saved annually, a home appreciates in value by $20,000. Most states have property tax exemptions that protect you against paying increased taxes on such improvements. This is definitely a substantial economic benefit.

Thursday, July 8, 2010



The fine, fierce new documentary "Restrepo" tracks a year in the lives of a15-man U.S. Army platoon under fire in the Taliban-ridden Korengal Valley of eastern Afghanistan, near the Pakistan border. It's hard to imagine a less agenda­driven filmic experience than that of these soldiers' daily lives. The film takes its name from a platoon medic we meet at the beginning, whose fate provides the picture with its narrative spine.

I saw an interview with the filmmaker of this documentary film where he talked of how was asked by the soldiers: "Do you think they know we're out here?"



Sunday, July 4, 2010

Lets Talk Economics...

There is a lot of talk lately of tightening the belt. Much of that is based upon the notion that we spend too much individually and that we're doing so because of how we see our own government spending. That belt tightening, has now morphed into talk of austerity measures that our government should take in order to avoid the same fate as Greece.

I recently asked some friends & acquaintances via facebook, etc for their thoughts and they seem to echo this sentiment. When pressed, some were able to provide some insights as to why they've drawn their conclusions. As I press further and further, however, the conversation drops off. So, what I've found was that they do indeed have good points. These are things we really need to do -- at some point. When and how do we get there is probably the most overlooked issue and thus underaddressed.

For all the talk of austerity measures, not all of the discussion is based in sound economics and that can be disturbing. This is so because, if one draws circumspect conclusions without sound economic analysis, the implications can affect not just our entire nation but the world.

Lets forget about the world for a moment. There is already talk among economic circles of a double dip recession or even a depression. Not just that, there is also talk of deflation. There is lackluster job growth and the jobs picture remains disappointing. And there is also talk of the federal stimulus being insufficient & thus ineffective (perhaps not effective enough).

If we start a pullback of federal deficit spending, how can this affect the economy?

Well, here is a brief explanation: Gross Domestic Product (GDP) is the measure of what we produce & sell and is essentially the value of what we earn as a country. GDP per capita gives us an understanding of how a particular level of income affects our standard of living. So, for a given level of GDP, if it decreases (c.p.), for the same size population, that translates to a lower standard of living than one is previously used to. The American Consumer accounts for 2/3 of GDP activity meaning they account for 2/3 of the consumption in the economic output. Inflation, the increase of price over time, is a necessary aspect of economic activity as it ensures value is added over time. However, if unchecked it can be damaging. And deflation is generally considered bad as it has the opposite effect as inflation. In economics, one also considers to whom does the benefit accrue. And in the case of inflation, the benefit accrues to the ones adding value. Whereas, deflation transfers the benefit to the purchaser of goods. This then disincentivizes a producer from engaging in economic activity as there is no value added incentives to that producer.

Okay, so as I explain more about economics in the above paragraph, it gets more and more complicated. And it is even more complicated than described here. So, how then can someone take a circumspect notion and make a decision that affects hundreds of millions? This previous post may help understand circumspect conclusions.

So, continuing the discussion... We have about a 9.5% national unemployment rate. The unemployment rate is defined as the number of people without a job and actively seeking employment. The natural unemployment level is around 4 to 5%. Natural unemployment is the number that we're stuck with even during expansionary economic periods. This 9.5% number is a bit dubious as it does NOT take into account those who are so discouraged they've given up looking for work. The real unemployed level may be around 15% or roughly three times the natural unemployment rate and growing. I say growing as there are people (such as high school or college graduates) entering the job market some of whom cannot find a job too.

After laying all of this out, here is an equation that will help illustrate what is going on:

Y = C + I + G + (E - I)

Y = Income or GDP
C = Consumption
I = Investment
G = Government
(E - I) = Net Exports

In order to maintain a certain level of GDP the variables on the right must change levels. Recall that GDP helps determine the level of standard of living for that population. Since consumption accounts for 2/3 of economic activity and approximately 10% less consumers (15% - 5%) are able to make purchases as they are unemployed, the Consumption variable decreases. Additionally, businesses put future economic activity on hold and Investments are down. Its common knowledge that we have a trade imbalance with developing nations such as China and of course we import more oil than we're able to produce. Therefore, Net Exports is negative although less negative than it would otherwise have been as we're not importing as much due to the downturn. Government spending has been high depending upon how you look at it. It is too controversial to get into, but, it has gone even higher to overcome the negative effects of the other variables.

In order for our economy to recover, we need to re-employ some of the unemployed so they can rejoin the ranks of the consumer segment. And this may precede business investments as consumer spending and thus demand must be at a level that initiates this action. There is a point at which government spending can affect Investments as it causes a crowding out effect for funding in financial markets. And that is tricky too. But after all of this, increased government spending has been the means employed to increase the right side of the equation to maintain GDP at or around its level necessary to maintain our standard of living, etc. This is being done at the expense of higher government debts that we will all have to help pay down. This future expense is taking us closer to being like Greece. However, if we don't emerge out of this economic situation and grow, we will be in an even dire situation than now. And it could accelerate our Greece-like experience. To avoid this, we need to emerge from this economic downturn and grow and make some structural changes.

Take a look at this exchange between both sides of the argument here. And this summation also.

This summation aligns closely with what I believe is a good remedy to the problem first proposed: When and how do we get there?

It is important we get this right because, as the world economic leader, what we do now can affect the lives of not just the hundreds of millions in our population, but billions worldwide. Simply put: too much is at stake for us to get this wrong.