Sunday, July 27, 2008
Pickens Plan
I'm sure by now most of you have seen T. Boone Pickens on TV with his commercials or on news shows. He offers a very no nonsense approach to using the resources in the USA and reducing our dependence on foreign oil - which is currently $700 billion a year on the way to $1 trillion a year. I've spent several hours watching his testimony in front of two Senate committees. If you haven't spent any time researching his plan, I'd recommend spending a few minutes on his website - it's very educational at the least. I found a 10 minute video that describes the plan very well.
Tuesday, July 15, 2008
Recession or No Recession?
I know that by the technical definition the US economy is not in recession. Yes, I know that there are parts of the country that are hurting - for instance Michigan. From my perspective there are only pockets of the country that are hurting and in general things are in pretty good shape. Now before everyone thinks I'm crazy, let me share some of my observations.
Most of you know from previous posts I travel extensively for my job. I have never seen airports more crowded than I have this year. I am rarely on an airplane that has more than 1 or 2 seats unfilled. In New York City this week one can hardly walk on the sidewalks because there are so many tourists. By the way you can hardly get a hotel room near Times Square and if you do they are going for a mere $500 to $700 per night. If the economy was in dire straights would people really be spending lavishly on discretionary items?
Let me go back to May of this year. I spent a week in Las Vegas for a conference. Again an off-peak time in Vegas and it was packed. I could hardly get in and out of the airport due to the lines, the gaming tables were very busy even on week nights, show prices are astronomical, and food prices reminded me of the Miller High Life commercial where their privileges are revoked due to ludicrous prices. If the economy was in dire straights would people really be throwing money away in Vegas?
I admit I feel the pain at the pump just like everyone else, however I've adjusted spending in other places to compensate for that increased expense.
Is it possible Phil Gramm is right that we have become a nation of whiners?
Most of you know from previous posts I travel extensively for my job. I have never seen airports more crowded than I have this year. I am rarely on an airplane that has more than 1 or 2 seats unfilled. In New York City this week one can hardly walk on the sidewalks because there are so many tourists. By the way you can hardly get a hotel room near Times Square and if you do they are going for a mere $500 to $700 per night. If the economy was in dire straights would people really be spending lavishly on discretionary items?
Let me go back to May of this year. I spent a week in Las Vegas for a conference. Again an off-peak time in Vegas and it was packed. I could hardly get in and out of the airport due to the lines, the gaming tables were very busy even on week nights, show prices are astronomical, and food prices reminded me of the Miller High Life commercial where their privileges are revoked due to ludicrous prices. If the economy was in dire straights would people really be throwing money away in Vegas?
I admit I feel the pain at the pump just like everyone else, however I've adjusted spending in other places to compensate for that increased expense.
Is it possible Phil Gramm is right that we have become a nation of whiners?
Friday, July 11, 2008
The Looming Crisis the Media is Ignoring
The world is currently consuming about 85 billion barrels of oil a day. Approximately 40% of the world's oil supply is transported through the Strait of Hormuz. As we all observed this week the tyrannical country of Iran is flexing it's muscle to discourage Israel and the US from attacking it's nuclear facilities. It is becoming clearer and clearer that Iran can disrupt if not shut down the Strait of Hormuz. The devastation to the US and world economies would be unimaginable.
The US is currently spending about $700 billion per year on imported oil. Some have said that a disruption in the Strait of Hormuz would double if not triple the cost of oil overnight. If the prices do not decline, the US would now spend $1.4 to $2.1 trillion dollars a year for imported oil Clearly this is not affordable and would cripple the US economy. To put the $700 billion of annual oil spend in perspective, that is 4 times the annual cost of the Iraq war.
What happens if the US can not reduce its dependence on imported oil? For starters the US military presence in the Middle East would have to be massive to keep the Strait of Hormuz open and to protect the oil fields in Saudi Arabia, Iraq, and Kuwait. The price at the pump could easily reach $8 to $12 per gallon.
The US needs a comprehensive plan to solve this problem. Domestic sources of energy need to be put into production as soon as possible. Diplomatically and militarily the Middle East must remain "stable" to minimize the disruption of the oil supply while domestic sources are brought online.
If Iran attacks the US or Israel, we may see economic conditions not seen since the Great Depression. Isn't it about time the media starts asking our elected leaders and want to be elected leaders some tough questions that affect all of us? If not we'll continue to get 24 hour coverage of mental recessions and Jesse Jackson wanting to castrate Obama.
The US is currently spending about $700 billion per year on imported oil. Some have said that a disruption in the Strait of Hormuz would double if not triple the cost of oil overnight. If the prices do not decline, the US would now spend $1.4 to $2.1 trillion dollars a year for imported oil Clearly this is not affordable and would cripple the US economy. To put the $700 billion of annual oil spend in perspective, that is 4 times the annual cost of the Iraq war.
What happens if the US can not reduce its dependence on imported oil? For starters the US military presence in the Middle East would have to be massive to keep the Strait of Hormuz open and to protect the oil fields in Saudi Arabia, Iraq, and Kuwait. The price at the pump could easily reach $8 to $12 per gallon.
The US needs a comprehensive plan to solve this problem. Domestic sources of energy need to be put into production as soon as possible. Diplomatically and militarily the Middle East must remain "stable" to minimize the disruption of the oil supply while domestic sources are brought online.
If Iran attacks the US or Israel, we may see economic conditions not seen since the Great Depression. Isn't it about time the media starts asking our elected leaders and want to be elected leaders some tough questions that affect all of us? If not we'll continue to get 24 hour coverage of mental recessions and Jesse Jackson wanting to castrate Obama.
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