h1

After Each Disaster Japan Rebuilds Bigger And Better

March 15, 2011

Tuesday, 15 March 2011 10:47 Lesley Downer, The Daily Telegraph

Throughout the history of Japan, its cities have been destroyed again and again by war, fire and earthquake. After each catastrophe, the Japanese have rebuilt, bigger and better. One hopes and expects that they will do the same again.

In Japan, you are constantly made aware of the power of nature. Summer is hot and steamy; in September there are typhoons; and during the rainy season in June it feels as if someone has tipped a bath of water over your head. But the most powerful force of all is the seismic activity.
Earthquakes and tremors are part of life in Japan and part of the forces that shape the landscape. The country is said to be geologically young, still in the process of forming. One of the results is the spectacular volcanoes, among them Mount Fuji, eternally smoking, and Mount Sakurajima, which belches black ash over the southern city of Kagoshima; when the ash is really bad, the inhabitants put up their umbrellas.

All over the country, hot water bubbles out of the earth, full of health-giving minerals. For the Japanese, taking the waters is the equivalent of our going to the seaside. There are also sand baths where you can be buried in hot volcanic earth. At Mount Osore, in the north of the main island, sulphur oozes out, staining the rocks yellow. It’s all part of the geological volatility, the opposite of our unchanging British landscape. Unlike the Japanese, we don’t expect geological upheaval; and living in these very different landscapes creates different attitudes to life.

Since the Kobe earthquake in 1995, the Japanese have done even more to make their buildings as earthquake-proof as possible. There have been scandals in other countries – China springs to mind – about unscrupulous builders producing buildings that collapse like a pack of cards, but in Japan there is no such cutting of corners. There are regular earthquake drills and all schoolchildren are taught what to do. People say that Japan is like a big village where everyone takes care of everyone else. This may have declined in recent years, but at a time of stress it re-emerges.

Living with the constant threat of earthquake, the Japanese have created an orderly society, which perhaps makes it easier to cope with the violence and unpredictability of nature. You really can set your watch by the bullet train. If you’re a second late, you will miss it, and if you leave your child on the platform (as a friend of mine did), it will pull out without him and not stop for three hours.

It’s also safe; the crime rate is very low and there is a much higher level of policing than in the UK, with policemen stationed in police boxes (like Doctor Who’s phone box). Local police know all of the families on their beat and regularly drop in on potential troublemakers and yakuza gangsters.

When you live in Japan, you learn to do things properly. I was once told off in a health club for standing up while showering instead of kneeling, as the Japanese do. The point was that showering on one’s knees is a form of discipline; it should not be done half-heartedly.

The principle is that whatever you do, you do it right. The tea ceremony is a bit like tai chi, making tea using only the most precise and economical movements. The same applies whether you’re walking in a kimono; removing your shoes in the entrance way and turning them around to face forwards, neatly lined up side by side; tying your chopstick envelope in a knot and resting your chopsticks on it; and, of course, wearing the correct slippers for the hallway and the toilet slippers in the toilet. Life is an agglomeration of small rules which together ensure order is maintained. Japanese street cleaners are proud of their jobs. Rather than resenting not having a better job, they make sure their streets are really clean.

The traditional dichotomy is between honne and tatemae – setting aside your true feelings in order to keep up appearances and not lose face, or making anyone else lose face. It is considered uncouth to express anger. I remember seeing a traffic accident in Japan, after which the people involved bowed, smiled and apologised to each other. They didn’t fly into a rage.

Another concept that springs to mind in the context of the earthquake is gaman – enduring. In the depths of winter in many provincial homes, the only heating is a kotatsu, a low table with an electric heater underneath and a quilt over the top, under which you put your legs. The theory is that if your legs and stomach are warm, the rest of you will be fine. And in summer people roast. If the weather is cold, you are cold; if the weather is hot, you are hot.

Perhaps this orderliness goes some way towards explaining why there have been no scenes of shouting, anguish or disorder coming out of northern Japan, and certainly no scenes of looting. Though having lived in Japan, I’d rather ask why such scenes happen in other countries, just as I wonder why our trains can’t run as promptly as the Japanese ones do.

Japanese culture makes room for disorder, too. As everyone knows, salarymen (office workers) get drunk in the evening and let off steam; then they pass out. Hostess clubs – or, if you’re incredibly rich and influential, geisha houses – are where you go to let off steam. The man who is very buttoned up in his working life can get away with anything while drunk. In fact, it’s considered rather suspect not to go drinking with one’s colleagues. Disorder and order are the Shinto and the Zen sides of Japanese culture.

The culture itself celebrates transience. This week I received an email telling me that the southern section of the bullet train was up and running again after the earthquake; it also mentioned that the cherry blossoms would be blooming from March 29. Lasting only a single day, they are seen as a poignant symbol of the impermanence of things.

The Japanese have applied some of the lessons they learnt in the Kobe earthquake. As well as improving building regulations, the government sent in the armed forces straight away, whereas in Kobe there was still public antipathy towards using the military; in fact, the powerful Yamaguchi-gumi crime syndicate won acclaim for going in with blankets, food and water long before the armed forces arrived.

The country’s politicians are a notoriously flaky bunch but the prime minister, Naoto Kan, may find that the earthquake revives the fortunes of his government, whose poll rating recently plummeted to below 20 per cent. On the very day of the earthquake, he had been forced to issue a statement saying that he would not resign over an illegal donations scandal that has engulfed his party. Now he has made a rather Churchillian speech, a passionate call for unity and resilience, the qualities that lifted Japan from its post-war despair. “Japan is facing its worst crisis in the 65 years since the war,” he said in a televised message to the public. “All the people [in] Japan face a test to see if we can overcome it. I believe we can.”

The Japanese certainly have a huge task ahead of them – and the damage to nuclear power stations adds another dimension of fear – though, unlike us, they are not unused to rebuilding. There is, for example, a tradition of rebuilding the great Shinto shrines: every 20 years they are torn down and built afresh in new wood, exactly as they were. They are both old and new; thousands of years old yet also brand spanking new.

Throughout the history of Japan, its wooden cities have been destroyed again and again by war, fire and earthquake. In the civil war of the 1860s, culminating in the Meiji Restoration, the north of the country, which has suffered the brunt of the earthquake, was virtually flattened. The Great Kanto Earthquake of 1923 reduced Tokyo to a sea of ash and rubble, and in the Second World War, American firebombing flattened the entire country, sparing only the cultural capital of Kyoto. Then came the Kobe earthquake of 1995.

Each time, the Japanese have rebuilt, bigger and better. One hopes and expects that they will do the same again.

The Daily Telegraph, 15 March 2011

h1

Obama’s Green-Jobs Fantasies

March 10, 2011

(For some reason WordPress kills the text formatting on some of my posts and the software refuses to register my edits; the result the following “smashed together” post.  My apologies)

By John Stossel

(http://townhall.com/columnists/johnstossel/2011/03/09/obamas_green-jobs_fantasies)
3/9/2011

Anyone who understands basic economics already knows that President Obama’s $2.3 billion green-jobs initiative was snake oil. Now, thanks to Kenneth P. Green, we have statistics as well as theory to prove it.
In a new article, “The Myth of Green Energy Jobs: The European Experience,” the environmental scientist and a resident scholar at the American Enterprise Institute writes, “Green programs in Spain destroyed 2.2 jobs for every green job created, while the capital needed for one green job in Italy could create almost five jobs in the general economy.”
Ironically, Obama boasts his initiative “will help close the clean-energy gap between America and other nations.” But Green says, “(C)ountries are cutting these programs because they realize they aren’t sustainable and they are obscenely expensive.”
Obama claims that if we “invest” more, “the transition to clean energy has the potential to grow our economy and create millions of jobs — but only if we accelerate that transition.”
What could make more sense? A little push from the smart politicians and — voila! — we can have an abundance of new good-paying jobs and a cleaner, sustainable environment. It’s the ultimate twofer.
Except it’s an illusion, as economic logic demonstrates.
“It is well understood, among economists, that governments do not ‘create’ jobs,” Green writes. “The willingness of entrepreneurs to invest their capital, paired with consumer demand for goods and services, does that. All the government can do is subsidize some industries while jacking up costs for others. In the green case, it is destroying jobs in the conventional energy sector — and most likely in other industrial sectors — through taxes and subsidies to new green companies that will use taxpayer dollars to undercut the competition. The subsidized jobs ‘created’ are, by definition, less efficient uses of capital than market-created jobs.”
Green is using good, solid economic thinking. Many years ago, Henry Hazlitt wrote in his bestseller, “Economics in One Lesson,” “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
In judging any government initiative, such as Obama’s green-jobs plan, you can’t look just at the credit side of ledger because the government is unable to give without first taking away.
Worse than that: Inevitably, more is taken away — destroyed — than is given because the government substitutes force and taxation for consent and free exchange. Instead of a process driven by consumer preferences, we get one imposed by politicians’ grand social designs. It’s what F.A. Hayek called “the fatal conceit.”
So we shouldn’t be surprised that green-jobs programs make energy more expensive. “(F)orcing green energy on the market (is) much, much more expensive,” Green said. “Using Spain as a model, when you do the math, you realize that creating 3 million new green jobs could cost $2.25 trillion.”
Of course, many people who push “green jobs” want the price of energy to rise so we’ll use less. If the environmental lobby wants Americans to be poorer, it ought to come clean about that.
The advocates of such programs don’t just misunderstand economics. They have lapsed into a pre-economic mentality. Rulers once believed they could do whatever they wanted, subject only to the physical laws of nature. If things didn’t work out as planned, it was because the people had failed to cooperate. But as economist Ludwig von Mises wrote, once economics emerged as an intellectual discipline, “it was learned that in the social realm too there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success … .”
That “something” is inescapable economic forces like the law of supply and demand.
Green is right when he says, “Central planners in the United States trying to promote green industry will fare no better (than Europe) at creating jobs or stimulating the economy.”
John Stossel
John Stossel is host of “Stossel” on the Fox Business Network. He’s the author of “Give Me a Break” and of “Myth, Lies, and Downright Stupidity.” To find out more about John Stossel, visit his site at johnstossel.com

h1

The Chevy Volt and Nissan Leaf are selling like . . . electric cars.

March 4, 2011

Car Talk

11:19 AM, MAR 4, 2011 • BY JONATHAN V. LAST (http://www.weeklystandard.com/blogs/car-talk_552899.html)

Hey everybody–it’s the Age of the Electric Car! Sales numbers for the Chevy Volt are out and you’ll never guess how many of these future machines consumers gobbled up in the month of February. Go ahead and try. I’ll wait.Is that your final answer? Okay. Well the real number is:

281.

Yup. 281 Volts were sold in February. That might sound terrible to you, but it’s actually really strong. Because Nissan only sold 67 Leafs (Leaves?), and the Leaf is both cheaper and, as far as over-priced econo-boxes go, way better than the Volt. So really, the Volt is doing pretty great. In fact, if you had told GM execs last year that the Volt was going to out-sell the Leaf by more than 4-to-1, they would have been thrilled.

Now if you wanted to be a Grumpy Gus and fixate on the bad news, it’s true that the trend isn’t great. In January, GM moved 321 Volts, so February represents a 12 percent decline. But again, there’s a bright side: Leaf sales dropped by 23 percent! So actually, the Volt has better legs than its prime competitor, too.

What, you want more good news? Okay, how about this: Because the Volt and Leaf sales are so . . . emerging, taxpayers saved money! The government gives everyone who buys one of the overpriced Volts or Leafs $7,500. So every electric car that doesn’t sell is money back in our pocket!

The only problem real problem is what these numbers mean for President Obama’s goal of having 1 million electric cars on the road by 2015. At this rate, it’ll take 232 years to hit that mark. But never fear. As Fred Barnes reminds us, Washington won’t ever give up trying to influence how Americans drive. They’ll think of something.

Bonus Fun Fact: The Volt’s 2011 production run was originally supposed to be 60,000 units. GM cut that number to 10,000 units. At this rate, the Volt is on track to sell 3,612 Volts this year. (Assuming sales don’t decline any further).

h1

Why the Dollar’s Reign Is Near an End

March 2, 2011

For decades the dollar has served as the world’s main reserve currency, but, argues Barry
Eichengreen, it will soon have to share that role. Here’s why—and what it will mean for international markets and companies.

By BARRY EICHENGREEN

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days.

Instead, it’s the extent to which the market remains dollar-centric.

Consider this: When a South Korean wine wholesaler wants to import Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with which to pay the Chilean exporter. Indeed, the dollar is virtually the exclusive vehicle for foreign-exchange transactions between Chile and Korea, despite the fact that less than 20% of the merchandise trade of both countries is with the U.S.

Chile and Korea are hardly an anomaly: Fully 85% of foreign-exchange transactions world-wide are trades of other currencies for dollars. What’s more, what is true of foreign-exchange transactions is true of other international business. The Organization of Petroleum Exporting Countries sets the price of oil in dollars. The dollar is the currency of denomination of half of all international debt securities. More than 60% of the foreign reserves of central banks and governments are in dollars.

The greenback, in other words, is not just America’s currency. It’s the world’s.

But as astonishing as that is, what may be even more astonishing is this: The dollar’s reign is coming to an end.

I believe that over the next 10 years, we’re going to see a profound shift toward a world in which several currencies compete for dominance.

The impact of such a shift will be equally profound, with implications for, among other things, the stability of exchange rates, the stability of financial markets, the ease with which the U.S. will be able to finance budget and current-account deficits, and whether the Fed can follow a policy of benign neglect toward the dollar.

The Three Pillars
How could this be? How could the dollar’s longtime most-favored-currency status be in jeopardy?

See the share of global foreign-exchange transactions involving the dollar, and the dollar’s share of official global foreign-exchange reserves.

To understand the dollar’s future, it’s important to understand the dollar’s past—why the dollar became so dominant in the first place. Let me offer three reasons.

First, its allure reflects the singular depth of markets in dollar-denominated debt securities. The sheer scale of those markets allows dealers to offer low bid-ask spreads. The availability of derivative instruments with which to hedge dollar exchange-rate risk is unsurpassed. This makes the dollar the most convenient currency in which to do business for corporations, central banks and governments alike.

Second, there is the fact that the dollar is the world’s safe haven. In crises, investors instinctively flock to it, as they did following the 2008 failure of Lehman Brothers. This tendency reflects the exceptional liquidity of markets in dollar instruments, liquidity being the most precious of all commodities in a crisis. It is a product of the fact that U.S. Treasury securities, the single most important asset bought and sold by international investors, have long had a reputation for stability.

Finally, the dollar benefits from a dearth of alternatives. Other countries that have long enjoyed a reputation for stability, such as Switzerland, or that have recently acquired one, like Australia, are too small for their currencies to account for more than a tiny fraction of international financial transactions.

What’s Changing
But just because this has been true in the past doesn’t guarantee that it will be true in the future. In fact, all three pillars supporting the dollar’s international dominance are eroding.

First, changes in technology are undermining the dollar’s monopoly. Not so long ago, there may have been room in the world for only one true international currency. Given the difficulty of comparing prices in different currencies, it made sense for exporters, importers and bond issuers all to quote their prices and invoice their transactions in dollars, if only to avoid confusing their customers.

Now, however, nearly everyone carries hand-held devices that can be used to compare prices in different currencies in real time. Just as we have learned that in a world of open networks there is room for more than one operating system for personal computers, there is room in the global economic and financial system for more than one international currency.

Second, the dollar is about to have real rivals in the international sphere for the first time in 50 years. There will soon be two viable alternatives, in the form of the euro and China’s yuan.

Americans especially tend to discount the staying power of the euro, but it isn’t going anywhere. Contrary to some predictions, European governments have not abandoned it. Nor will they. They will proceed with long-term deficit reduction, something about which they have shown more resolve than the U.S. And they will issue “e-bonds”—bonds backed by the full faith and credit of euro-area governments as a group—as a step in solving their crisis. This will lay the groundwork for the kind of integrated European bond market needed to create an alternative to U.S. Treasurys as a form in which to hold central-bank reserves.

China, meanwhile, is moving rapidly to internationalize the yuan, also known as the renminbi. The last year has seen a quadrupling of the share of bank deposits in Hong Kong denominated in yuan. Seventy thousand Chinese companies are now doing their cross-border settlements in yuan. Dozens of foreign companies have issued yuan-denominated “dim sum” bonds in Hong Kong. In January the Bank of China began offering yuan-deposit accounts in New York insured by the Federal Deposit Insurance Corp.

Allowing Chinese companies to do cross-border settlements in yuan will free them from having to undertake costly foreign-exchange transactions. They will no longer have to bear the exchange-rate risk created by the fact that their revenues are in dollars but many of their costs are in yuan. Allowing Chinese banks, for their part, to do international transactions in yuan will allow them to grab a bigger slice of the global financial pie.

Admittedly, China has a long way to go in building liquid markets and making its financial instruments attractive to international investors. But doing so is central to Beijing’s economic strategy. Chinese officials have set 2020 as the deadline for transforming Shanghai into a first-class international financial center. We Westerners have underestimated China before. We should not make the same mistake again.

Finally, there is the danger that the dollar’s safe-haven status will be lost. Foreign investors—private and official alike—hold dollars not simply because they are liquid but because they are secure. The U.S. government has a history of honoring its obligations, and it has always had the fiscal capacity to do so.

But now, mainly as a result of the financial crisis, federal debt is approaching 75% of U.S. gross domestic product. Trillion-dollar deficits stretch as far as the eye can see. And as the burden of debt service grows heavier, questions will be asked about whether the U.S. intends to maintain the value of its debts or might resort to inflating them away. Foreign investors will be reluctant to put all their eggs in the dollar basket. At a minimum, the dollar will have to share its safe-haven status with other currencies.

A World More Complicated
How much difference will all this make—to markets, to companies, to households, to governments?

One obvious change will be to the foreign-exchange markets. There will no longer be an automatic jump up in the value of the dollar, and corresponding decline in the value of other major currencies, when financial volatility surges. With the dollar, euro and yuan all trading in liquid markets and all seen as safe havens, there will be movement into all three of them in periods of financial distress. No one currency will rise as strongly as did the dollar following the failure of Lehman Bros. There will be no reason for the rates between them to move sharply, something that would potentially upend investors.

But the impact will extend well beyond the markets. Clearly, the change will make life more complicated for U.S. companies. Until now they have had the convenience of using the same currency—dollars—whether they are paying their workers, importing parts and components, or selling their products to foreign customers. They don’t have to incur the cost of changing foreign-currency earnings into dollars. They don’t have to purchase forward contracts and options to protect against financial losses due to changes in the exchange rate. This will all change in the brave new world that is coming. American companies will have to cope with some of the same exchange-rate risks and exposures as their foreign competitors.

Conversely, life will become easier for European and Chinese banks and companies, which will be able to do more of their international business in their own currencies. The same will be true of companies in other countries that do most of their business with China or Europe. It will be a considerable convenience—and competitive advantage—for them to be able to do that business in yuan or euros rather than having to go through the dollar.

U.S. Impact
In this new monetary world, moreover, the U.S. government will not be able to finance its budget deficits so cheaply, since there will no longer be as big an appetite for U.S. Treasury securities on the part of foreign central banks.

Nor will the U.S. be able to run such large trade and current-account deficits, since financing them will become more expensive. Narrowing the current-account deficit will require exporting more, which will mean making U.S. goods more competitive on foreign markets. That in turn means that the dollar will have to fall on foreign-exchange markets—helping U.S. exporters and hurting those companies that export to the U.S.

My calculations suggest that the dollar will have to fall by roughly 20%. Because the prices of imported goods will rise in the U.S., living standards will be reduced by about 1.5% of GDP—$225 billion in today’s dollars. That is the equivalent to a half-year of normal economic growth. While this is not an economic disaster, Americans will definitely feel it in the wallet.

On the other hand, the next time the U.S. has a real-estate bubble, we won’t have the Chinese helping us blow it.

Dr. Eichengreenis the George C. Pardee and Helen N. Pardee professor of economics and political science at the University of California, Berkeley. His new book is “Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System.” He can be reached at reports@wsj.com

h1

The corruption of climate science

March 1, 2011

Roy W. Spencer, Ph. D.  (http://www.drroyspencer.com/2011/02/on-the-house-vote-to-defund-the-ipcc/)

Politicians formed the IPCC over 20 years ago with an endgame in mind: to regulate CO2 emissions. I know, because I witnessed some of the behind-the-scenes planning. It is not a scientific organization. It was organized to use the government-funded scientific research establishment to achieve policy goals.

Now, that’s not necessarily a bad thing. But when they are portrayed as representing unbiased science, that IS a bad thing. If anthropogenic global warming – and ocean `acidification’ (now there’s a biased and totally incorrect term) – ends up being largely a false alarm, those who have run the IPCC are out of a job. More on that later.

I don’t want to be misunderstood on this. IF we are destroying the planet with our fossil fuel burning, then something SHOULD be done about it.

But the climate science community has allowed itself to be used on this issue, and as a result, politicians, activists, and the media have successfully portrayed the biased science as settled. They apparently do not realize that `settled science’ is an oxymoron.

The most vocal climate scientists defending the IPCC have lost their objectivity. Yes, they have what I consider to be a plausible theory. But they actively suppress evidence to the contrary, for instance attempts to study natural explanations for recent warming.

That’s one reason why the public was so outraged about the ClimateGate e-mails. ClimateGate doesn’t prove their science is wrong.but it does reveal their bias. Science progresses by investigating alternative explanations for things. Long ago, the IPCC all but abandoned that search.

Oh, they have noted (correctly I believe) that a change in the total output of the sun is not to blame. But there are SO many other possibilities, and all they do is dismiss those possibilities out of hand. They have a theory – more CO2 is to blame – and they religiously stick to it. It guides all of the research they do.

The climate models are indeed great accomplishments. It’s what they are being used for that is suspect. A total of 23 models cover a wide range of warming estimates for our future, and yet there is no way to test them for what they are being used for! climate change predictions.

Virtually all of the models produce decadal time scale warming that exceeds what we have observed in the last 15 years. That fact has been known for years, but its publication in the peer reviewed literature continues to be blocked.

My theory is that a natural change in cloud cover has caused most of the recent warming. Temperature proxy data from around the world suggests that just about every century in the last 2,000 years has experienced warming or cooling. Why should today’s warmth be manmade, when the Medieval Warm Period was not? Just because we finally have one potential explanation – CO2?

This only shows how LITTLE we understand about climate change.not how MUCH we know.

Why would scientists allow themselves to be used in this way? When I have pressed them on the science over the years, they all retreat to the position that getting away from fossil fuels is the `right thing to do anyway’.

In other words, they have let their worldviews, their politics, their economic understanding (or lack thereof) affect their scientific judgment. I am ashamed for our scientific discipline and embarrassed by their behavior.

Is it any wonder that scientists have such a bad reputation among the taxpayers who pay them to play in their ivory tower sandboxes? They can make gloom and doom predictions all day long of events far in the future without ever having to suffer any consequences of being wrong.

The perpetual supply of climate change research money also biases them. Everyone in my business knows that as long as manmade climate change remains a serious threat, the money will continue to flow, and climate programs will continue to grow.

Now, I do agree the supply of fossil fuels is not endless. But we will never actually “run out”.we will just slowly stop trying to extract them as they become increasingly scarce (translation – more expensive). That’s the way the world works.

People who claim we are going to wake up one morning and our fossil fuels will be gone are either pandering, or stupid, or both.

But how you transition from fossil fuels to other sources of energy makes all the difference in the world. Making our most abundant and affordable sources of energy artificially more expensive with laws and regulations will end up killing millions of people.

And that’s why I speak out. Poverty kills. Those who argue otherwise from their positions of fossil-fueled health and wealth are like spoiled children.

The truly objective scientist should be asking whether MORE, not less, atmospheric carbon dioxide is what we should be trying to achieve. There is more published real-world evidence for the benefits of more carbon dioxide, than for any damage caused by it. The benefits have been measured, and are real-world. The risks still remain theoretical.

Carbon dioxide is necessary for life on Earth. That it has been so successfully demonized with so little hard evidence is truly a testament to the scientific illiteracy of modern society. If humans were destroying CO2 – rather than creating more – imagine the outrage there would be at THAT!

I would love the opportunity to cross examine these (natural) climate change deniers in a court of law. They have gotten away with too much, for too long. Might they be right? Sure. But the public has no idea how flimsy – and circumstantial – their evidence is.

In the end, I doubt the IPCC will ever be defunded. Last night’s vote in the House is just a warning shot across the bow. But unless the IPCC starts to change its ways, it runs the risk of being totally marginalized. It has almost reached that point, anyway.

And maybe the IPCC leadership doesn’t really care if its pronouncements are ignored, as long as they can jet around the world to meet in exotic destinations and plan where their next meeting should be held. I hear it’s a pretty good gig.

 

h1

February 26, 2011

OnePlusYou Quizzes and Widgets
Created by OnePlusYou

h1

Hybrids vs. Nonhybrids: The 5-Year Equation

February 24, 2011

Here is a very good quick read into the main issue that I believe exists with hybrid cars as replacements for non-hybrids.  The underlying fact is that hybrid cars (and trucks)  are more expensive to purchase than for non-hybrids; often by several thousands of dollars.  To recoup the additional cost, gasoline (and diesel) fuel costs would have to be significantly higher that any projected short-term future price (say…within the next 10 years).  Some might refer to the federal (and sometimes state) tax breaks given to first time purchasers that can make this price difference less of an issue, but what really is happening with these “incentives” is taking money (taxes) from one person and giving it(a gift) to another to make what is really a bad deal look better.   I don’t think that most Americans believe that it is a good thing to give their hard earned money to help support what is essentially a product that would be produced at a loss.  When looked at at the rate of replacement (called market penetration) of non-hybrid  with hybrids, the Toyota Prius – the most successful and longest marketed hybrid has taken 10 years to put 1 million cars in the US market (US car/truck ownership exceeds 200 million) . There is no doubt that these hybrids are, and will remain for the foreseeable future, essentially a “boutique” item, purchased mostly for that “hybrid” badge, by well-to-do folks that the additional cost is justified in the prestige of owning these expensive cars.  Like those people that spend $100s on a Louis Vuitton handbag that is actually a cheap $25  plastic bag; its all in the appearance, having the right label. This type of “keeping up with the Jones” doesn’t make sound economic thinking and, unfortunately, will only lead to more subsidies (and tax money squandered) for a market that cannot be supported.

By MATTHEW L. WALD –  NYT -February 23, 2011, 7:45 AM

A car buyer who lays out an extra $6,200 extra to buy the hybrid version of the Lexus RX will get the money back in gas savings within five years, according to Consumer Reports magazine, but only if gasoline averages $8.77 a gallon. Otherwise, the nonhybrid RX 350 is a better buy than the Hybrid 450h, the magazine says. The hybrid gets 26 miles per gallon, and the nonhybrid, 21, in the magazine’s calculation.

The magazine’s annual New Car Buying Guide includes a table that compares several hybrid cars with their nonhybrid versions, or, in the case of cars that come only in hybrid models, to similar cars by the same manufacturer that are not hybrids.

For example, the Honda Insight comes only in a hybrid version, so it was compared with the nonhybrid Honda Fit; gasoline would have to rise to $10.08 to even out the extra expense, Consumer Reports said. The Insight sells for $22,010 and the Fit for $16,260.

The researchers use a five-year payback period because that is a typical duration for car ownership. It assumed that the driver would log 12,000 miles a year and pay $2.80 a gallon, a price that now looks a bit on the low side.

The Toyota Prius, the most popular hybrid, did far better in the magazine’s comparison. Consumer Reports paired it with the Toyota Corolla LE, comparing the hybrid’s 44 miles per gallon and purchase price of $22,950 with the Corolla’s $17,950 list price and 32 miles per gallon. The Prius will cost less over a five-year period as long as the price of gasoline averages only 80 cents a gallon, the magazine calculated.

For some models, the choice is close to neutral from a financial point of view. The Ford Escape hybrid would cost $500 more over five years, but would break even if gasoline prices averaged $3.60. The Toyota Camry hybrid would save $500 over five years by comparison with the Camry LE 4-cylinder and remains a better deal if the price of gasoline averages just $1.92.

The magazine also compared diesel and gasoline versions of some models. The Mercedes-Benz GL350 BlueTec diesel, at $66,925 and 19 miles per gallon, will save $8,000 over five years compared with the gasoline GL450 version, which sells for $69,035 and gets 15 miles per gallon. It is cheaper than gasoline at any price, the magazine said.

Some people who bought last year will see different economics because of tax breaks that were still in place then. And some states offer access to HOV lanes, special parking or other perks for hybrids.

But of course, money might not be the major motivator when it comes to hybrids, said Jonathan D. Linkov, the managing editor of the magazine’s auto section. There’s also “that green feeling,” he said.