Wednesday, December 31, 2008

LIBOR-ing through the Bailout: The trend watch continues

So, here's the latest LIBOR trend graph from I ran it back to 2005, and shaded in the current recession. As a performance measure, it confirms what we hear in the MSM nearly daily - banks are not lending to each other because LIBOR (which appears to rise in times of increasing economic activity) is remaining low. Infact, LIBOR is still lower in all 4 categories then it was 3 years ago. SOme bailout, huh?

Tuesday, December 30, 2008

It's the End of Year as we know it - and liberals feel fine?

As you know if you read the teaser below, you know that I'm closing out the year in a bit of a stew. Seems that, while I am supposed to be all atwitter about Mr. Obama's election (especially with Democratic majorities in the House and Senate), I am still uneasy. You see, Mr. Obama, for all his change, is still a centerist politician. he's not a traditional liberal Democrat. Which begs the question - does America really need a liberal antidote to ultra right (or even moderate) Conservatives? And if we do, how to we make it a reality?

The "common wisdom" in DC is that we don't. After all, these supposedly learned persons will say, the Nation began to move Right with Nixon. We swung farther that way with Reagan and Bush I. Clinton was no real liberal, and Bush II just took the pendulum too far. Mr. Obama, they will close, is just setting things back. He'll regulate business (but only just so much); he'll keep the bank bailout in place (and with few requirements of those banks); he'll get the economy going again with big infrastructure spending which will also be good for business.

But will it be good for workers? Will you and I - getting up each day, going to work, paying taxes, playing with our kids - will we really benefit from Mr. Obama's Change We Can Believe In?

Cynical? Perhaps. But as a liberal who has wandered about in the political wasteland, I think I am entitled to a little cynacism. And, as a true liberal, I am skeptical that Mr. Obama, even with a Democratic majority, will infact get us back to a more liberal country. You see, he has a lot to do - restoring the rights eliminated by the Patriot Act; closing Guantanimo Bay; repealing all the last minute Bush II evnironmental and health roll-backs; and then there is the minor issue of keeping the economy from collapsing further. its a tall order.

I look forward to seeing what he accomplishes.

Monday, December 29, 2008


Over at Mike's place, I ask a burning question for liberals these days. It's a teaser, so stay tuned.

Tuesday, December 16, 2008

More Grumbine Science: Science and consensus

Over at his Blog, colleague Bob Grumbine has an excellent treatise on what consensus is and isn't in science. I suggest you all read it. Makes framing easier, at least for climate issues.

More Grumbine Science: Science and consensus

Monday, December 15, 2008

What the Auto Bailout Really means, and why it may be a BAD deal!

If you've been following the news lately, you know that the CEO's of Ford, GM and Chrysler have been to Capitol Hill (twice) to ask for a financial baiout from Congress. The numbers have varied, but add to between $15 Billion and $25 Billion. This on top of the $700 Billion set aside for banks and financial institutions by Congress with the creation of TARP.

So, do the auto makers really need this money? Well, one philosophical argument says that they do, because it preserves American manufacturing in the face of foreign car companies. Never mind that The "Big Three" were too slow to adjust to a changing world, and continued to produce SUVs and pickups after the others had gone smaller again. While no one can claim Toyota or Honda or BMW are perfect tea leave readers, they aopear to be more nimble in terms of changing their manufacturing plan and sales pitches. It turns out that the American three were trying to force consumers to buy into the continued upswinging bubble, even though consumers had already figured out they needed smaller, more efficient transportation.

All that aside, I have to wonder how much a complete shut down of the auto makers will really hurt the American economy. As a scientist, I answer the questions by going to the numbers. Googling on auto industry employment, I find that both the auto industry and the Bureau of Labor Statistics are in agreement. It seems that about 190,000 Americans are actually employed making the cars in questions. Another 777,000 work in suppliers and ancillary support industries. There are 1,235,000 or so who actually sell the cars and trucks once produced (though many of these are part time gigs).

So adding it up, we get about 2.2 million people working in the auto industry. Seems like a lot of people. Yet the current unemployment rate (November 2008) is 6.7% or approximately 10.3 million people. That is up, by 1.7% or 2.7 Million people from December 2007.

If I've done the math right, the auto workers would add another 1.4% to that unemployment rate, driving it to 8.1%. TO put it in context, we went over 8% unemployment between 1977 and 1978; and then again between 1982 and 1985. That, by the way, is a far cry from the 25% and higher unemployment experienced by America in the Great Depression.

So we have a situation wher ethe impacts to the economy aren't going to be as bad as we keep being led to believe. Why is that? Partly its idealogy, partly its the MSM's need to have a controversy to report on. I also suspect, like so many other things, it has to do with American's increasing disconnect from the things, like farming and manufacturing, that underlie our economy.

Should we bail them out? Not if the lax controls that were put in place for TARP are applied here. Giving anyone else my tax dollars wihtout ensuring they do what is right for America is not something I can support. We as a antaion have done it twice in my life time - once with Chrysler in 1979 (!) and once following the S&L crisis. The opinions of the Social Darwinists in the Bush Administration not withstanding, we can do it again.