OT-
Time to place yer bets for a stock market crash this week. The Dow is below the low points earlier this year --- the two points when the Fed 'rescued' the the market.
If the Dow drops farther, pressure increases for a big sell-off...and the Fed doesn't a lot of resources left.
GDP has steadily bloated since 1971, as well. Much non-monetized work has become monetized (e.g. child-care), and much non-work created (e.g. most of the insurance/securities industry and gov't).
The effect has been to make GDP look much larger than it is.
Energy costs may actually absorb a fourth of the productive GDP. Unfortunately, there is no published GDP deflator.
Meanwhile government hysterics which wiped out the tomato industry in FloriDUH are now saying we were mistaken. Sorry. Government is the problem not the solution.
Investigators are seeing more signs that the salmonella outbreak blamed on tomatoes might have been caused by tainted jalapeno peppers and have begun collecting samples from restaurants and from the homes of those who have been sickened, according to health officials involved in the probe.
It's a lies, damn lies and statistics kind of thing. All Wyss is really saying is that households are smaller and there are more of them, so the percent of household income spent on energy is the same as 1971. He says nothing about per capita percentage, or the percent of GDP which CR is using.
I think a lot of the reduction in energy usage is caused by manufactures closing their US plants and moving elsewhere. Production requires energy and we import instead of produce. What we have done is export our energy consumption to China, but that doesn't mean it has dissapeared.
Bin Laden didnt have to become king of Saudi Arabia to achieve his goal; in fact, Bushs policies delivered it for him. The Bush administrations catastrophic decision to invade Iraq, sink the nation into debt to pay for that war, and consequently, weaken the dollar have all caused oil prices to soar astronomically.
Testifying before the House Foreign Affairs Committee last May, Anne Korin, the co-director of the Institute for the Analysis of Global Security, reminded Congress about bin Ladens goal
Even people who don't think about efficiency have replaced terrible appliances and cars with better ones. Factories (the ones left) also are much more efficient. The microprocessor has allowed precise control of all sorts of things, resulting in great savings.
While the Bush crew stopped improving conservation, they did not undo the 29 years before them, and some improvements happened in spite of them. Now with $143 oil, you might say they are encouraging conservation better than their predecessors.
An S&P analyst said this? Would that be the same S&P that just a couple of months ago gave a price target of $91 a barrel for oil, with a range of plus or minus $50 (at $144 a barrel, we are currently outside of that giant range S&P set for the price of a barrel of oil just a couple months ago)?
So how are they adjusting for inflation and the value of a dollar in this period, and thus what is the dollar pegged to as a comparative correlation? I guess I need to friggn dig into this, but on the surface, on the whole, this does seem to be cheerleader hype engineered to show a robust economy, and I'm sure retarded people are in awe, possible in shock?
Also, Haloscan has developed this amusing new quirk where it refuses to give me the comments unless I click on a reference, any reference to Krugman, to the article cited, click back and then I can access the comments.
Both Standard & Poors and The Economic Outlook Group call for real GDP in the U.S. to rise 1.3% in 2008. Whats more, S&Ps chief economist David Wyss expects real GDP in 2009 to hold at 1.3%. Wyss says the U.S. economy has moved into recession, but that it should be a mild one due to the fiscal and monetary stimulus.
Well as one who just discovered another payment shock - airfare went up by $200 for a contemplated quick trip since Wednesday.
Yowzer.
Start stocking up on basic foods and booze. Those are going to be hit with some stunning price increases as the next round of cost push inflation hits.
Like any European yummies? I bet next year they will cost 40% more.
All that's necessary is for the Israelis to attack Iran, something the JCOS chairman--who visited Tel Aviv for two days last week--has been trying to persuade them not to do.
The US is no longer in control of its own economic or political destiny.
Re: t least as early as 1976 the Saudis were warning the West that they no longer had sufficient economic incentives to produce oil at the projected rates which the industrialized world would desire in-the future..The Saudi Petroleum Minister, Sheikh Yamani, noted in an interview that Saudi oil production was fast approaching the self-imposed production ceiling of 8.5 MBD and main tained that "we won't go beyond that for the foreseeable future unless there are strong reasons to do so 9 Presumably these "strong reasons" were related to Saudi foreign policy goals in the Middle East, although Yamani typically spoke in an elliptical fashion and left oil importers to draw their own conclusion.
Rob Dawg, I just guessed on GDP assuming a small nominal increase (3% annual rate) for the rest of they year. That would put the real rate at zero. That has to be somewhat close. There are enough other larger errors in my guesses, that even if real GDP declined 2%, that wouldn't make much difference.
This is definitely a rough estimate, but it does show energy consumption is a fairly large percentage of GDP this year.
Can anyone explain how energy is going to hit 14% of GDP when in 2005 it was 8% and oil was in 50$ range, now oil is hitting 140$, unemployment rising, economy slowing, housing downturn, negative equity, lowest consumer confidence.
What happens this winter when folks who are lower middle class are faced with impossible heating bills?
-Lawyerliz
That's what I've been wondering. Have been hearing chainsaws going in the neighborhood more than usual and it is past the peak tree trimming time of late Winter and early Spring. Price of firewood surely is up, but it is tough to find prices. Maybe after this winter we will have futures contracts for firewood delivery.
"The US economy is well on its way to crush depth.
All that's necessary is for the Israelis to attack Iran, something the JCOS chairman--who visited Tel Aviv for two days last week--has been trying to persuade them not to do."
While Dick Cheney whispers "Don't listen to that guy" into Olmert's ear through back channels.
The U.S. has not simply "lost control" of its political destiny; it's been hijacked.
In 2003 their daily oil production was around 37 million barrel and that of gas was 55 billion cubic feet contributing 48 and 22 percent to global production of oil and gas respectively. The sheer size of the hydrocarbon resource base and the production profiles of the NOCs underscore their importance to the world energy landscape, he said.
Another way of understanding the impact is to look at how many hours of work are required to buy a barrel of oil. A good chart was prepared by Paul McCulley of PIMCO:
That graph illustrates how fatuous the claim that energy made up a much smaller share of GDP than in the previous energy crunch: they were comparing cycle peak to cycle trough... doh!
km4, your Bin Laden report is downright scary. While we gave tax subsidies to Hummers, a deranged nut-case presents his own energy policy, and he wins hands down.
$144 oil will have a hundred times the economic effect of 9/11.
Anonymous writes:
Meanwhile government hysterics which wiped out the tomato industry in FloriDUH are now saying we were mistaken. Sorry. Government is the problem not the solution.
In a way this sort of abstract analogy is like trying to compare cost per sq/ft of all real estate in the USA and then average out a statistical relationship into a model that doesn't exist!
The vacancy rate for U.S. rental apartment buildings was unchanged at 5.9 percent in the second quarter as the housing slump and a weakening economy deterred people from buying homes, Reis Inc. reported.
MBIA Inc. and Ambac Financial Group Inc. lost their AAA credit ratings. The biggest hospital in Sarasota, Florida, is paying the price.
David Verinder, chief financial officer of the Sarasota Memorial Health Care System, received daily e-mail messages last month informing him that interest costs on an $83 million bond issue were rising to 1.45 percent, to 1.75 percent, to 3.25 percent, to 5.9 percent, and finally to 9 percent by June 24, a more than fivefold increase.
Bob Dobbs writes:
While Dick Cheney whispers "Don't listen to that guy" into Olmert's ear through back channels.
Bob, I think what you meant to say was:
While the demoKrats and Obamaiacs whisper to Iran "Go for it...sort of reminds one of what FDR did with the S.S. St. Louis.
On 4 June 1939, the St. Louis was also refused permission to unload on orders of President Roosevelt as the ship waited in the Caribbean Sea between Florida and Cuba.
The worst part is oil could fall next week to $100 and we still will face that inflationary cost push price increase.
Now with the wind blowing toward reducing the influx of cheap immigrant labor, the working man is going to stick it to capital big time, once again, it will suck to try and make a profit as a large corporate concern.
Ah well, they didn't notice that their 401ks are tied to the health of said corporate clients.
Of course, given the dismal amount of money that j6p has in their retirement accounts, a tax increase to increase the amount paid to low income social security beneficiaries will be an almost inevitable consequence of this breakdown.
I foresee 10% from worker for SS and 5% for medicare/last resort health care with an employer match by 2013.
I can just imagine Larry Kudlow stroking out when it passes the democratic congress.
The republican failure with foreign policy and energy policy will leave them high and dry for a long time.
Nobody will care about a small tax cut when the b-i-law's family is living on the couch.
As for attacking Iran, I have begun to believe it is all smoke and mirrors. The Israeli war talk is designed to force high oil prices and make the West get off it's duff and deal with Iran. That has manifestly failed.
So now the word is trot out MAD, and prepare for a ground offensive in response to missiles. Unless they can manage to damage the facilities sufficient to set the program back, all they do is delay the inevitable.
After all, building a bomb isn't that hard. Although, if I was in charge in Iran, I would have built some refinery capacity and a few fertilizer plants instead. but hey, making your own people happier pales in comparison with conquering the middle east and blowing up Israel.
They never learned from the Iran/Iraq war, and they won't learn from this one, should it come to pass.
This has always been one of my problems with the middle east, their motives are opaque to rational thinking.
After all, the rational response to Kuwaiti slant drilling should have been to ramp up drilling and pump it out of the disputed area as fast as possible. If Saddam had done that, he would still be butchering his people and allowing his sadistic sons the run of the mill.
Geez, nothing like a smart dictator.
Look at Zimbabwe for another bunch of morons. They are living by the sword, and my guess is that when push comes to shove they will all end up against the wall, and their entire families will also pay the price for their stupidity. Africa is returning to the pre European tribal strongman rule. I expect to see the reintroduction of slavery to countries that have previously removed it, and to see more and more parts falling out of contact with the West. The Chinese probably take more of a social darwin attitude toward local African governments. In other words, as long as we get our oil or resources, we don't care what you do to your people.
We sure won't care when we have to pay the new prices for our lifestyle. I can only imagine when hunger starts making inroads into the American lifestyle of the poor, that foreign aid will be at the bottom of the priority list. Pax Americana is over, and the long list of grievances that will be settled in regions of the world will dictate the course of history for the next twenty years.
It is the end of history, but not in a good way, it is the end of the rise of the West and it's rule over the rest of the World.
Now we shall see how bad it gets before a new world order emerges. We are going to sit on the sidelines for a while and recuperate from our folly.
I too am concerned about the high cost of home heating that are coming though I see electric utilities are raising rates 15-20% already and this will impact summer a/c costs. My guess is that there will be screams soon as utilities cut service to deadbeats unable to cope with the new rate structure.
Gas utilities are trying to get ahead of the game by terminating service in the warm months on deliquent accounts as it is difficult to do so once winter sets in.
As it is I suspect that heating and electrical rate hikes will soon start exacerbating the real estate default rates as people are going to keep the power and heat on before they pay the mortgage and if gas and electric bills are higher than the mortgage payment, as they will be for many, no financial bailout on the mortgage side will matter.
Might also suggest that housing size has increased a lot since 1971 and if heat pumps, a/c units and furnaces are more efficient and new homes better insulated that happy state of affairs only obtains when the house and equipment is new. After a few years you just have a bigger house!
For the average household in 2006, energy costs (including gasoline, motor oil, electricity, natural gas, fuel oil, bottled gas, etc.) were 6.8 percent of average before-tax household income and 8.6 percent of average household expenditures, based on data from the 2006 Consumer Expenditure Survey (the latest household data available).
Average hh income = $60,533
Average hh expenditures = $48,398
Average hh energy exp. = $4,140
I understand this is off topic but I was looking at CD rates and IndyMac and WaMu are offer good rates. If they went under, how do I get my money and do I still get the contracted rate of return from the FDIC or do you just get your original principal returned. Thanks in advance.
Don't worry, this was all predicted by our National Energy Policy...
Oh wait, we don't have a National Energy Policy? Now, I'd like to know why and I was looking at the online Library of Congress archives and couldn't figure out why.
In 1989 there was a Renewable Energy and Energy Efficiency Act passed, and during that debate Congressmen were pointing out that Japan, Netherland, and other countries were over-taking us. There might've been other significant legislation passed in the meantime, but although there was some concern... even some people suggesting we phase in a 50 cent gas tax... it didn't seem like there was a lot.
Maybe I should be looking at the debates over the Energy Bills... but goin back to 1989 there was little concern about energy independence, even as our oil imports rose.
I understand why Bush I and Bush II wouldn't do anything about our dependence on foreign oil, I think the "lets drill in ANWR" argument is not compelling, since we might actually need to use it to fight a war.
I'd have to say Clinton administration was asleep at the wheel on this one... but maybe they were hamstrung by a strong Congress? But Gore was the bloody VP for pete's sake...
there was a piece on NPR about people selling their SUVs. one example was of a guy trying to sell his year old Escalade that he paid $70,000 for new. They offered him $31,000. Mark 2 Market.
He drove off without selling. Probably looking for the Level 3 Parking Lot.
My observation has been that contradictory and incomplete data is a huge problem at many levels of the energy debate. Just ask the goofball Senator (who evidently is unaware of the tremendous gains that have been made with respect aerodynamic efficiency of vehicles during the past 25 years) who wants to lower the spend limit to 55MPH. Energy$/GDP$ is just one more example. Given a few months to research the issues, I'm sure I could make sense of all the condtridictions, but I don't have a spare three months to do that, and I would be suspect of someone that did have that much free time.
The good thing about that dumb Senator is that there will be a lot more resistance than there was in 1974 when Nixon and Congress passed the law if they try to push this through.
Unfortunately I don't expect much from Republicans on energy issues. Currently we are paying for waiting to see the "market work it out"... now its true we don't know how much money we'd have to pay to achieve independence, etc... but at least we'd have some base as a nation of where the best way to go is.
By the way our government acts half of the people think drilling in ANWR and more domestic sources are the answer. Or maybe its that the Republican "energy independence" is to have a powerful army...
1: raise the upper limit on payroll taxes to the ceo limit and give a waiver o the first $15k
2: For those folks who have patents related to thin film solar, make compulsory licences mandatory with a handsome royalty rate based on retail price. Same goes for thermal depolymerization/ diesel algae /whatever. More eyeballs on a problem the quicker the solution and both parties can make a profit off it while driving down costs and increasing efficiency.
3: invest in smart grid energy infrastructure; distributed power is the way to go.
also invest in high speed (point to point) rail. any city with it's neighbor 200 miles away should be part of a network.
THIS IS WAR
The quicker we gain economies of scale in alternative forms of energy we can tell the tinpot tyrants of the world to get bent and not only turn around our current account defecit(by exporting our solar tech) but increase both the amount of disposible income but the multiple as well.
Alec:
...also invest in high speed (point to point) rail. any city with it's neighbor 200 miles away should be part of a network.
Any city? That sounds pretty silly. I agree one of of big problems is there are no regional high-speed rail networks. Here, you either drive or fly. But I think it would be important to pick the places most likely to succeed, or the project would never get anywhere. Start with LA to SF, places like that.
As to your point about patents, what makes those technologies uneconomic without subsidies has little to do with royalties and patents.
CR, the consumer's leverage to oil and natural gas prices is less than the actual commodity price. Crack spreads, for example, were quite high in 2005, and have moderated significantly. Transportation and distribution (fixed costs) account for a significant portion of the home user's natgas bill.
The benchmark light sweet crude contract also accounts for a small portion of total crude consumption in the U.S. Heavier grades have increased in price as well, of course, but not as much as the benchmark contract.
And, of course, industrial demand is more elastic than consumer demand.
So it won't be 14% of GDP. But it will almost certainly be higher than 10%.
The point is that the problems are in areas of effiency or scaling, but due to patent protection no one else is gonna pursue the issue, just try and develop a workaround at best. With compulsory licences other folks who are either smarter,more experienced or better capitalized who feel they can do better can build the better mousetrap now rather than in 15-20 years. Those with the patents still have a head start, yet still can be rewarded or their ingenuity.
Example: My old man got a patent on a mobile bearing knee and licensed it to a company eventually bought by J&J. every other manufacturer said it was rubbish until the patent expired, then they all rushed out their version.
He still made out like a bandit, but wouldn't both him and the hundreds of thousands of knee revision patients been the richer if other device manufacturers had the choice of a copmpulsory licence after FDA approval?
That asshole was off having a blowjob and screwed up the country. Thank God we have a person like Bush in office that isn't getting a blowjob and making this economy hum!! Go McCain!
Troy asserted "The Prius gets its best mpg at 20mph (100mpg) and it's all downill from there."
I don't drive a Prius, but will speak to the Honda Civic Hybrid. Like most cars, it requires speeds well above 20 MPH to amortize out the fixed energy costs and get in optimum gearing, thus finding a peak. From my own experience, that peak is in the 50-55 MPH range. [My best Oakton VA to Alexandria 27-mile morning commute was 63.7 MPG; I know whereof I speak.]
A rental Mercedes 190D I drive in Germany actually had a MPH (ok, liters per km) vs. speed graph in the user's manual. It peaked around 60 MPH.
Finally, such a curve is based on a single car breaking all the wind by itself. I never draft closely, but have noted that in typical, dense checkerboard traffic on a 3 or 4-lane highway, I can make 75-80 MPH trips at 44 MPG going with the flow.
That's good enough for me, and the 55 MPH politico can stuff himself.
In information theory (FRIGGIN OIL) the Shannon entropy or information entropy is a measure of the uncertainty associated with a random variable. It quantifies the information contained in a message, usually in bits or bits/symbol. It is the minimum message length necessary to communicate information.
This also represents an absolute limit on the best possible lossless compression of any communication: treating a message as a series of symbols, the shortest possible representation to transmit the message is the Shannon entropy in bits/symbol multiplied by the number of symbols in the original message.
A fair coin has an entropy of one bit. However, if the coin is not fair, then the uncertainty is lower (if asked to bet on the next outcome, we would bet preferentially on the most frequent result), and thus the Shannon entropy is lower. A long string of repeating characters has an entropy of 0, since every character is predictable. The entropy of English text is between 1.0 and 1.5 bits per letter,[1] or as low as 0.6 to 1.3 bits per letter, according to estimates by Shannon based on human experiments.[2]
200 miles is the zone where it's too far to drive as a commute, yet too close for airlines to fly economically.
LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air, but by HS rail due to stops, distance and topography it would be a massive financial sink hole. Same goes for PHX-LA-LV triangle.
Uncertainty and friggin inefficiency....hello, wake up, this is not about Clinton's blowjob, this is a matter of price inefficiency and manipulation related to price fixing and The Bush Coup is an active part of this collusion!
MP, first car was a used rabbit, but it was regular old gas. I believe i made around $3.50 an hour at my summer job. And a fill up was probably $9 or $10.
Min wage now is $7.50 in some places, right? Probably $40-$45 to fill up the rabbit these days.
At least we don't have to worry about wage inflation.
"If" GDP can be a percentage of GDP, then anything can be, right? Any ratio can be expressed, but what does it represent? As a percentage, I know that in general, people consume on average X amount of chocolate, or X amount of taters, or vodka or whatever, so the question here is, does GDP actually reflect or represent consumption in terms that are comparable?
This is a serious question, and it would be nice to get some feedback.
Energy efficiency increases in housing, transportation and industry have been huge in the last 2 decades in the US. Just not quite as huge as the increase of energy costs.
On the other hand, far more products today are made with direct petroleum content.
Energy (oil) is not a bad from a supply/demand viewpoint; I think speculation has driven prices higher and I think there is a sort of willingness of energy suppliers to not rock the boat - to go along and form a sort of monopoly of consent. This is much like what is happening in the lumber industry in the US - mills are closed and that decreases supply, but since demand is down in balance with that, prices stay relatively stable. The margins for the industry are OK at the reduced supply point, so why not just go along? Assumptions about how free markets work always assume the existence of a free market and, increasingly, we do not have those.
People who think we can have a good economy any time soon are crazy. With 71% of the economy being consumer related, where are they going to get more money? Not from credit, housing or wage increases.
"LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air"
After you factor in travel time to the airport, parking, security, delays, etc, the time differential is much less. I'd rather drive.
I can remember driving down to LA late one night in a rabbit at full throttle. At that speed, cops would rarely catch up with you. I was cruising at 95 mph when I saw lights in the rearview mirror. They were rapidly gaining on me. A cop I thought. Finally I slowed down so I wouldn't get a ticket. The car passed and it was an old El Camino. I quickly returned to cruising speed, but the El Camino drifted out of sight in a few minutes.
I had an old VW Rabbit diesel, I loved it.
When I lived in Ireland I drove an Isuzu diesel pickup. It was a crew cab 1 ton truck with a torquey 4 cylinder engine and it got over 30mpg. I could tow or haul anything in that truck that I could here with an F-350 getting less than half the gas mileage.
Plantagenet writes:
I agree with the swollen GDP and exported manufacturing ideas. But also consider the improvements in efficiency since 1971.
some of the appliances we have are more efficient, but some are not. how about all of those HDTVs and other devices that continue to burn electricity even when turned off as consumers do not want to be inconvienced by the amount of time it would take to warm. think about other appliances or elctronics that were not widespread in 1971 -- home PCs, microwaves, DVDs, etc. also, the square footage of homes have grown dramatically since 1971. hence, households are using more energy than ever.
"Rachel Laing, spokeswoman for Southern California Gas Co., said the natural gas utility has seen a slight increase in the number of disconnected customers.
"With a bad economy, you would expect a larger increase, but it has been pretty stable," Laing said. "
Interesting. Electricity disconnects are up significantly in the LA region, gas disconnects are not. Wonder why? More all-electric homes/apartments down there?
GDP as a percentage of corn production and ethanol derivaties. If the GDP is related to energy consumption, we should be able to see that broken out in a pie chart... what the fuck is CR doing?
..some 41 countries have lost three to ten percent of their GDP from rising food, fuel and commodity prices since January 2007. Over 30 countries have been hit by food riots, as the impact of the crisis reaches the household level, said Mr Zoellick.
All in all, increasing energy prices will likely impart further downward pressure on the growth of real household income and expenditures, and, thus, also business sales, earnings and capital outlays for the remainder of this year. These drags on economic growthfinancial, housing and oilhave increased the risk of a recession this year. Although the recently passed fiscal stimulus package may provide a modest, albeit temporary, boost to growth, forecasters and the FOMC expect real GDP growth this year to be 1 percent or less.
The American economy is in a recession, which is projected to be short and mild, while oil will likely trade at $91 a barrel by the end of the year, though the range of that forecast is plus or minus $50, Standard & Poor's said Thursday.
"I don't think it [the U.S. recession] will have as much downward impact on commodity prices because [a lot of] commodities demand comes from outside the U.S.," said David Wyss
These people are manipulating markets and they are fucking assholes that should shut up and stop hyping bullshit; furthermore, this blog is full of stupidity and very few people are on topic, as usual, maybe we should talk about reality modeling opportunities and pretend we know who will win the next chili cookoff in Peru.
200 miles is the zone where it's too far to drive as a commute, yet too close for airlines to fly economically.
LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air, but by HS rail due to stops, distance and topography it would be a massive financial sink hole. Same goes for PHX-LA-LV triangle.
What? Defacto policy implemented by lobbyists isn't turning out so great? But... I've been assured that the lobbyists are only thinking about what is best for all of us!? Darn you Fox News. Darn you to H. E. double hockeysticks!
LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air, but by HS rail due to stops, distance and topography it would be a massive financial sink hole
I've taken the Tokyo to Osaka shinkansen several times. 345 miles. Only a couple of stops -- they've figured out how to run a timetable and interleave express trains between locals on the same tracks.
We can argue about the sinkhole aspect -- I agree it wouldn't be cheap, but ISTM that we've got a lot of productive overcapacity so it's more of a question of national will than money.
Re: "Geez this blog is stupid, what's eating you?"
Nothing was even close to being resolved here, just off topic after OT and then nothing on track. The percent of GDP as a slice of pie for anything was never discussed. This is an example of a dumb topic for S&P and then misinformation and confusion related to nothing... what is the point?
As to the post about Dana Milbank: According to Wiki he's Skull and Bones.
Comment on GIM regarding Swagel's press conference:
Verdict:
1) Staged. Come on... five or six reporters? Skull and Bones?
I think it went down as simple as this: "Okay you go out and act nervous, use common economic code words all the movers and shakers will recognize as big trouble, and then we will have one of our S&B brothers in the media, maybe Dana, point out again and again how nervous and unconfident you are during his report."
2) It is not meant for the masses...it is meant to be seen by the movers and shakers who also will see this video.
It is meant to create a larger ripple. Yup, they are pro-actively crashing this economy.
Furthermore, over the last decade the US has moved industrial production offshore so energy for that use has declined while energy for residential use has increased to take up the slack. SO looking at energy as a percent of GDP is makes things look better for consumers than they really are -- because today consumers are much bigger energy users than industrial concerns.
...also invest in high speed (point to point) rail. any city with it's neighbor 200 miles away should be part of a network.
-Bob_in_MA
What is going to reduce energy consumption related to commuting the most here in the US isn't HIGH SPEED so much as it is the AVAILABILITY of any alternative service for the most commuters possible that doesn't require sitting in a slowly moving parking lot every morning and evening. Really, the winners here are going to be providing a service that gets you OUT of your car as quickly as possible into a TRAIN that MOVES, not necessarily quickly, but one that MOVES, and gets you to your destination in a predictable manner. It isn't about the transit time between nodes, it is the efficiency of getting TO and FROM the NODES themselves to ride the rail that happens to move and is predictable.
The '69 Electra's equivalent is the Ford Explorer, not uncommon hybrids. The benefits of newer appliances have been overwhelmed by more computers, cell phones and ipods that didn't exist back then; and of course, a greater sum of TVs, air-conditioners and the like in more houses and commercial buildings that are bigger and therefore consume more heating, cooling and lighting on the whole, despite the greater efficiency of their parts.
i think that the elites may plan for amero, but will they succeed? they planned for EU constitition and it failed. and in regard to amero dont forget the canadians are not so hot to become a part of us, besides they already sold their oil sands to the chinesse.
ou well, the chinese, good that i mention them. somehow everybody forgot about the asians in general you know, these guys who own something like 3 tril usd in reserves?
what would they say about amero as a way to escape the debt burden of us? or how long do you think would the rulers of arab world stay in power should us default and try to put amero in place.
and yes, the chinnese and japannese. well the western elites may have outplanned themself into bringing the asian elites into power, and i doubt highly that there are s&b members in japans and chinas elites.
This group has often posted on the subject of the impact of energy prices on the over all economy. There will be demand destruction for gasoline, but not that much because transportation for work and movement of food is darn near a fixed cost. The reduced consumption will come in clothing, sporting goods, furniture and other discretionary items. Watch the strip malls close up and unemployment jump. Interesting times and thanks for the great chart.
Per capita U.S. energy consumption - virtually constant since 1971. 35 years
-wally
Interesting table. Compare the virtually constant Per capita U.S. energy consumption in Btu against the column "Energy Consumption per Real Dollar of GDP". That one has consistently been falling over the years. Both columns taken together tell me that the energy actually consumed by individual people has increased greatly while energy consumed in the workplace has went down considerably.
It would be very enlightening to tease apart the second case. How much of the energy decrease in the workplace is attributable to:
a) Fewer energy intensive industries no longer being as prominent here any longer (steel, i.e., more service economy)
b) Energy Efficiency improvements over time in the same workplace(s).
c) How much of this is due to there being more "Real Dollars of GDP" being created due to non-energy productivity improvements.
This species of ours does best as a generalist species. But because we are so clever we always forget and specialize. A hundred years ago we staked almost everything on petroleum. We are learning what happens to specialists.
Bob, I think what you meant to say was:
While the demoKrats and Obamaiacs whisper to Iran "Go for it...sort of reminds one of what FDR did with the S.S. St. Louis.
This kind of math error in the cited article is actually all too common. I also noticed this one immediately, but like CR I think in terms of numbers and always extrapolate, so its easy for me to see. Most national publications should have an expert math person on staff to review for these commonplace errors by competent writers who are incompetent in basic math stuff.
FLASHBACK: Ten Years Ago, Bin Laden Demanded Barrel Of Oil Should Cost $144 Think Progress
Bin Laden didnt have to become king of Saudi Arabia to achieve his goal; in fact, Bushs policies delivered it for him.
While there is a certain amount of luck for bin Laden in having Bush as president, we also should recognize bin Laden is a fairly smart fellow, and outsmarting Bush was necesary for him, and he's done well in several ways in that regard.
More important than the level of energy/gdp is the relative change, which is huge. According to your calculations, the share will increase from 10% to 14% of GDP in 1-year. And a big chunk will go abroad (to the Middle East). So that the US economy (households, companies and the govt) are suffering a huge shock on their income statements... Look, not just households, but also the rest of the economy... it seems that after the effect of the fiscal stimulus vanishes, we will see some hard times for the US economy... the ones who think that the job market will improve rapidly will be very disapointed... and the FED is surely worried about that.
The BEA produces data on nominal energy CONSUMPTION which may be compared with nominal total conumption or nominal disposable income. These data may be updated to the second quarter fairly easily, easing retail energy price change. We are surely not back to the 1971 level. Indeed, the rise recently exceeds the hit from the 1973 shock, the 1979 shock or the two taken collectively.
SO.......energy as a % of GDP has remained steady since 1970, and GDP has
increased 4x in that same span? sounds
like we are being pretty efficient over
time.
OT-
Time to place yer bets for a stock market crash this week. The Dow is below the low points earlier this year --- the two points when the Fed 'rescued' the the market.
If the Dow drops farther, pressure increases for a big sell-off...and the Fed doesn't a lot of resources left.
Assumption that could raise estimate; What are you using for GDP estimates 2H 08?
Assumption that will likely lower your estimate; Average price paid for energy. Lots of long term contracts pouring $85 oil into the tanks.
Excellent work, thanks for initiating the discussion.
GDP has steadily bloated since 1971, as well. Much non-monetized work has become monetized (e.g. child-care), and much non-work created (e.g. most of the insurance/securities industry and gov't).
The effect has been to make GDP look much larger than it is.
Energy costs may actually absorb a fourth of the productive GDP. Unfortunately, there is no published GDP deflator.
The guy is a dumb ass. End of story.
Meanwhile government hysterics which wiped out the tomato industry in FloriDUH are now saying we were mistaken. Sorry. Government is the problem not the solution.
Investigators are seeing more signs that the salmonella outbreak blamed on tomatoes might have been caused by tainted jalapeno peppers and have begun collecting samples from restaurants and from the homes of those who have been sickened, according to health officials involved in the probe.
http://www.baltimoresun.com/news/health/bal-te.salmonella04jul04,0,1339689.story
Maybe Market Watch forgot to mention S&Ps consumption range which i would imagine looks something like +/-100%.
It's a lies, damn lies and statistics kind of thing. All Wyss is really saying is that households are smaller and there are more of them, so the percent of household income spent on energy is the same as 1971. He says nothing about per capita percentage, or the percent of GDP which CR is using.
I think a lot of the reduction in energy usage is caused by manufactures closing their US plants and moving elsewhere. Production requires energy and we import instead of produce. What we have done is export our energy consumption to China, but that doesn't mean it has dissapeared.
suecris,
Actually, the report does say per capita use has increased since 1971:
Despite low per-household energy use, energy use per person has gone up, the report said.
The amount of energy use per capita had risen 2% by 2005 from 1971, . . . .
but I agree with the general premise that the number of households in the U.S. now, compared to 1971, is what makes his statistics even plausible.
1971 was before the boomers started household formation.
Very nice post CR
FLASHBACK: Ten Years Ago, Bin Laden Demanded Barrel Of Oil Should Cost $144
Think Progress » FLASHBACK: Ten Years Ago, Bin Laden Demanded Barrel Of Oil Should Cost $144
Bin Laden didnt have to become king of Saudi Arabia to achieve his goal; in fact, Bushs policies delivered it for him. The Bush administrations catastrophic decision to invade Iraq, sink the nation into debt to pay for that war, and consequently, weaken the dollar have all caused oil prices to soar astronomically.
Testifying before the House Foreign Affairs Committee last May, Anne Korin, the co-director of the Institute for the Analysis of Global Security, reminded Congress about bin Ladens goal
I agree with the swollen GDP and exported manufacturing ideas. But also consider the improvements in efficiency since 1971.
For me:
Then, 1969 Buick Electra 225 (12 MPG)
Now, 2004 Honda Civic Hybrid (44 MPG)
Then, crappy old electric appliances
Now, high efficiency gas appliances
Then, 100% incandescent
Now, 50% compact fluorescent
Even people who don't think about efficiency have replaced terrible appliances and cars with better ones. Factories (the ones left) also are much more efficient. The microprocessor has allowed precise control of all sorts of things, resulting in great savings.
While the Bush crew stopped improving conservation, they did not undo the 29 years before them, and some improvements happened in spite of them. Now with $143 oil, you might say they are encouraging conservation better than their predecessors.
CIBC has oil alone hitting 10% of US GDP in 2010.
http://research.cibcwm.com/economic_public/download/feature2.pdf
An S&P analyst said this? Would that be the same S&P that just a couple of months ago gave a price target of $91 a barrel for oil, with a range of plus or minus $50 (at $144 a barrel, we are currently outside of that giant range S&P set for the price of a barrel of oil just a couple months ago)?
S&P research is beyond worthless.
So how are they adjusting for inflation and the value of a dollar in this period, and thus what is the dollar pegged to as a comparative correlation? I guess I need to friggn dig into this, but on the surface, on the whole, this does seem to be cheerleader hype engineered to show a robust economy, and I'm sure retarded people are in awe, possible in shock?
What happens this winter when folks who are lower middle class are faced with impossible heating bills?
Hey, northerners, there are a lot of towers with waterfront views we (sharkish) Floridians are willing to sell you.
Don't worry about the assn fees. . .
Also, my boomer household was formed in 1966, and I had my first kid in 69.
Great comments, all!
Keep 'em coming.
Also, Haloscan has developed this amusing new quirk where it refuses to give me the comments unless I click on a reference, any reference to Krugman, to the article cited, click back and then I can access the comments.
Weird.
Oil only goes UP!!!
Here is the old boy a few months ago (I think), giving a dull, lifeless upbeat outlook. Mild recession.
YouTube -
Recession will be shallow, like his brain.
Gas @ $3.50 (no comment)
Weak GDP Forecast Puts Strain on U.S. Hotel Market
Weak GDP Forecast Puts Strain on U.S. Hotel Market
Both Standard & Poors and The Economic Outlook Group call for real GDP in the U.S. to rise 1.3% in 2008. Whats more, S&Ps chief economist David Wyss expects real GDP in 2009 to hold at 1.3%. Wyss says the U.S. economy has moved into recession, but that it should be a mild one due to the fiscal and monetary stimulus.
Well as one who just discovered another payment shock - airfare went up by $200 for a contemplated quick trip since Wednesday.
Yowzer.
Start stocking up on basic foods and booze. Those are going to be hit with some stunning price increases as the next round of cost push inflation hits.
Like any European yummies? I bet next year they will cost 40% more.
Ugh. This just depressing.
Someday this war's gonna end...
The US economy is well on its way to crush depth.
All that's necessary is for the Israelis to attack Iran, something the JCOS chairman--who visited Tel Aviv for two days last week--has been trying to persuade them not to do.
The US is no longer in control of its own economic or political destiny.
Like any European yummies? I bet next year they will cost 40% more.
As I mentioned earlier, the spanish-made guitar I bought last year is now 40% higher.
and yes, I intentionally bought it when I did to lock in the exchange rate.
I was joking with my co-workers a year ago about buying FXE to hedge for my future 335i purchase.
Wish I had!
DOW will tank to a level below 11k next week. My prediction after reading the entrails.
S&P:
YouTube
- SPTVbroadcast's Channel
S&P: Fed rate move in 1976 exception???
Re: t least as early as 1976 the Saudis were warning the West that they no longer had sufficient economic incentives to produce oil at the projected rates which the industrialized world would desire in-the future..The Saudi Petroleum Minister, Sheikh Yamani, noted in an interview that Saudi oil production was fast approaching the self-imposed production ceiling of 8.5 MBD and main tained that "we won't go beyond that for the foreseeable future unless there are strong reasons to do so 9 Presumably these "strong reasons" were related to Saudi foreign policy goals in the Middle East, although Yamani typically spoke in an elliptical fashion and left oil importers to draw their own conclusion.
Rob Dawg, I just guessed on GDP assuming a small nominal increase (3% annual rate) for the rest of they year. That would put the real rate at zero. That has to be somewhat close. There are enough other larger errors in my guesses, that even if real GDP declined 2%, that wouldn't make much difference.
This is definitely a rough estimate, but it does show energy consumption is a fairly large percentage of GDP this year.
Best to all.
Can anyone explain how energy is going to hit 14% of GDP when in 2005 it was 8% and oil was in 50$ range, now oil is hitting 140$, unemployment rising, economy slowing, housing downturn, negative equity, lowest consumer confidence.
This should lead to less consumption..
What happens this winter when folks who are lower middle class are faced with impossible heating bills?
-Lawyerliz
That's what I've been wondering. Have been hearing chainsaws going in the neighborhood more than usual and it is past the peak tree trimming time of late Winter and early Spring. Price of firewood surely is up, but it is tough to find prices. Maybe after this winter we will have futures contracts for firewood delivery.
"The US economy is well on its way to crush depth.
All that's necessary is for the Israelis to attack Iran, something the JCOS chairman--who visited Tel Aviv for two days last week--has been trying to persuade them not to do."
While Dick Cheney whispers "Don't listen to that guy" into Olmert's ear through back channels.
The U.S. has not simply "lost control" of its political destiny; it's been hijacked.
Bob- "While Dick Cheney whispers "Don't listen to that guy" into Olmert's ear through back channels."
That would not surprise me in the slightest.
In 2003 their daily oil production was around 37 million barrel and that of gas was 55 billion cubic feet contributing 48 and 22 percent to global production of oil and gas respectively. The sheer size of the hydrocarbon resource base and the production profiles of the NOCs underscore their importance to the world energy landscape, he said.
OIIP Oil Initially in Place
URR Ultimate Recoverable Oil Reserves
RF Recovery Factor (URR/OIIP)
7% of a juiced up financial company faux earnings GDP.
Forward estimates must be north 0f 10%
Another way of understanding the impact is to look at how many hours of work are required to buy a barrel of oil. A good chart was prepared by Paul McCulley of PIMCO:
PIMCO - Global Central Bank Focus McCulley A Kind Word for Inflation
Great post CR, another slam-dunk.
That graph illustrates how fatuous the claim that energy made up a much smaller share of GDP than in the previous energy crunch: they were comparing cycle peak to cycle trough... doh!
km4, your Bin Laden report is downright scary. While we gave tax subsidies to Hummers, a deranged nut-case presents his own energy policy, and he wins hands down.
$144 oil will have a hundred times the economic effect of 9/11.
Anonymous writes:
Meanwhile government hysterics which wiped out the tomato industry in FloriDUH are now saying we were mistaken. Sorry. Government is the problem not the solution.
Baltimore Sun breaking news, sports, weather and traffic in Baltimore - baltimoresun.com news...0,1339689.story
Bingo Anonmous! Of course if a company put out bogus info they could be sued...the government...nope. Sorry we wiped you out financially.
In a way this sort of abstract analogy is like trying to compare cost per sq/ft of all real estate in the USA and then average out a statistical relationship into a model that doesn't exist!
The vacancy rate for U.S. rental apartment buildings was unchanged at 5.9 percent in the second quarter as the housing slump and a weakening economy deterred people from buying homes, Reis Inc. reported.
The average monthly U.S. asking rent rose 1 percent to $1,047, the 25th consecutive quarter that rents increased or stayed the same, according to Reis, a New York-based research firm.
U.S. Apartment Vacancies Rise on Concern Over Wages (Update1) - Bloomberg.com
OT: Municipal Market `Fire in the Disco' Burns Borrowers (Update1)
Municipal Market `Fire in the Disco' Burns Borrowers (Update1) - Bloomberg.com
MBIA Inc. and Ambac Financial Group Inc. lost their AAA credit ratings. The biggest hospital in Sarasota, Florida, is paying the price.
David Verinder, chief financial officer of the Sarasota Memorial Health Care System, received daily e-mail messages last month informing him that interest costs on an $83 million bond issue were rising to 1.45 percent, to 1.75 percent, to 3.25 percent, to 5.9 percent, and finally to 9 percent by June 24, a more than fivefold increase.
Bob Dobbs writes:
While Dick Cheney whispers "Don't listen to that guy" into Olmert's ear through back channels.
Bob, I think what you meant to say was:
While the demoKrats and Obamaiacs whisper to Iran "Go for it...sort of reminds one of what FDR did with the S.S. St. Louis.
On 4 June 1939, the St. Louis was also refused permission to unload on orders of President Roosevelt as the ship waited in the Caribbean Sea between Florida and Cuba.
The worst part is oil could fall next week to $100 and we still will face that inflationary cost push price increase.
Now with the wind blowing toward reducing the influx of cheap immigrant labor, the working man is going to stick it to capital big time, once again, it will suck to try and make a profit as a large corporate concern.
Ah well, they didn't notice that their 401ks are tied to the health of said corporate clients.
Of course, given the dismal amount of money that j6p has in their retirement accounts, a tax increase to increase the amount paid to low income social security beneficiaries will be an almost inevitable consequence of this breakdown.
I foresee 10% from worker for SS and 5% for medicare/last resort health care with an employer match by 2013.
I can just imagine Larry Kudlow stroking out when it passes the democratic congress.
The republican failure with foreign policy and energy policy will leave them high and dry for a long time.
Nobody will care about a small tax cut when the b-i-law's family is living on the couch.
As for attacking Iran, I have begun to believe it is all smoke and mirrors. The Israeli war talk is designed to force high oil prices and make the West get off it's duff and deal with Iran. That has manifestly failed.
So now the word is trot out MAD, and prepare for a ground offensive in response to missiles. Unless they can manage to damage the facilities sufficient to set the program back, all they do is delay the inevitable.
After all, building a bomb isn't that hard. Although, if I was in charge in Iran, I would have built some refinery capacity and a few fertilizer plants instead. but hey, making your own people happier pales in comparison with conquering the middle east and blowing up Israel.
They never learned from the Iran/Iraq war, and they won't learn from this one, should it come to pass.
This has always been one of my problems with the middle east, their motives are opaque to rational thinking.
After all, the rational response to Kuwaiti slant drilling should have been to ramp up drilling and pump it out of the disputed area as fast as possible. If Saddam had done that, he would still be butchering his people and allowing his sadistic sons the run of the mill.
Geez, nothing like a smart dictator.
Look at Zimbabwe for another bunch of morons. They are living by the sword, and my guess is that when push comes to shove they will all end up against the wall, and their entire families will also pay the price for their stupidity. Africa is returning to the pre European tribal strongman rule. I expect to see the reintroduction of slavery to countries that have previously removed it, and to see more and more parts falling out of contact with the West. The Chinese probably take more of a social darwin attitude toward local African governments. In other words, as long as we get our oil or resources, we don't care what you do to your people.
We sure won't care when we have to pay the new prices for our lifestyle. I can only imagine when hunger starts making inroads into the American lifestyle of the poor, that foreign aid will be at the bottom of the priority list. Pax Americana is over, and the long list of grievances that will be settled in regions of the world will dictate the course of history for the next twenty years.
It is the end of history, but not in a good way, it is the end of the rise of the West and it's rule over the rest of the World.
Now we shall see how bad it gets before a new world order emerges. We are going to sit on the sidelines for a while and recuperate from our folly.
Then the war will be over.
I too am concerned about the high cost of home heating that are coming though I see electric utilities are raising rates 15-20% already and this will impact summer a/c costs. My guess is that there will be screams soon as utilities cut service to deadbeats unable to cope with the new rate structure.
Gas utilities are trying to get ahead of the game by terminating service in the warm months on deliquent accounts as it is difficult to do so once winter sets in.
As it is I suspect that heating and electrical rate hikes will soon start exacerbating the real estate default rates as people are going to keep the power and heat on before they pay the mortgage and if gas and electric bills are higher than the mortgage payment, as they will be for many, no financial bailout on the mortgage side will matter.
Might also suggest that housing size has increased a lot since 1971 and if heat pumps, a/c units and furnaces are more efficient and new homes better insulated that happy state of affairs only obtains when the house and equipment is new. After a few years you just have a bigger house!
CR, maybe you forgot to adjust for all the new features of modern energy? Brawndoil has electrolytes. It's what cars crave.
For the average household in 2006, energy costs (including gasoline, motor oil, electricity, natural gas, fuel oil, bottled gas, etc.) were 6.8 percent of average before-tax household income and 8.6 percent of average household expenditures, based on data from the 2006 Consumer Expenditure Survey (the latest household data available).
Average hh income = $60,533
Average hh expenditures = $48,398
Average hh energy exp. = $4,140
I understand this is off topic but I was looking at CD rates and IndyMac and WaMu are offer good rates. If they went under, how do I get my money and do I still get the contracted rate of return from the FDIC or do you just get your original principal returned. Thanks in advance.
Don't worry, this was all predicted by our National Energy Policy...
Oh wait, we don't have a National Energy Policy? Now, I'd like to know why and I was looking at the online Library of Congress archives and couldn't figure out why.
In 1989 there was a Renewable Energy and Energy Efficiency Act passed, and during that debate Congressmen were pointing out that Japan, Netherland, and other countries were over-taking us. There might've been other significant legislation passed in the meantime, but although there was some concern... even some people suggesting we phase in a 50 cent gas tax... it didn't seem like there was a lot.
Maybe I should be looking at the debates over the Energy Bills... but goin back to 1989 there was little concern about energy independence, even as our oil imports rose.
I understand why Bush I and Bush II wouldn't do anything about our dependence on foreign oil, I think the "lets drill in ANWR" argument is not compelling, since we might actually need to use it to fight a war.
I'd have to say Clinton administration was asleep at the wheel on this one... but maybe they were hamstrung by a strong Congress? But Gore was the bloody VP for pete's sake...
Goldilocks Economics - The Polyanna approach to the interpretive science.
"danf writes:
I think a lot of the reduction in energy usage is caused by manufactures closing their US plants and moving elsewhere"
Uh huh. I go along with that reasonably crisp explanation.
there was a piece on NPR about people selling their SUVs. one example was of a guy trying to sell his year old Escalade that he paid $70,000 for new. They offered him $31,000. Mark 2 Market.
He drove off without selling. Probably looking for the Level 3 Parking Lot.
My observation has been that contradictory and incomplete data is a huge problem at many levels of the energy debate. Just ask the goofball Senator (who evidently is unaware of the tremendous gains that have been made with respect aerodynamic efficiency of vehicles during the past 25 years) who wants to lower the spend limit to 55MPH. Energy$/GDP$ is just one more example. Given a few months to research the issues, I'm sure I could make sense of all the condtridictions, but I don't have a spare three months to do that, and I would be suspect of someone that did have that much free time.
The good thing about that dumb Senator is that there will be a lot more resistance than there was in 1974 when Nixon and Congress passed the law if they try to push this through.
It looks like this guy has the same kind of problem the people rating the CDOs had.
JD said: "... lower the spend limit to 55MPH."
I don't get my best fuel economy at 55 - it's a little closer to 65. That's in an SUV with a V-8.
I don't get my best fuel economy at 55 - it's a little closer to 65
no no no when it goes gallons-per-mile, large numbers are less efficient than small numbers
(who evidently is unaware of the tremendous gains that have been made with respect aerodynamic efficiency of vehicles during the past 25 years)
aerodynamic drag as a square of relative windspeed hasn't changed in the past 25 years.
The Prius gets its best mpg at 20mph (100mpg) and it's all downill from there
I'd have to say Clinton administration was asleep at the wheel on this one...
I agree, though having an anti-science Congress for the last 6 years of his administration didn't help
Unfortunately I don't expect much from Republicans on energy issues. Currently we are paying for waiting to see the "market work it out"... now its true we don't know how much money we'd have to pay to achieve independence, etc... but at least we'd have some base as a nation of where the best way to go is.
By the way our government acts half of the people think drilling in ANWR and more domestic sources are the answer. Or maybe its that the Republican "energy independence" is to have a powerful army...
How to fix things?
1: raise the upper limit on payroll taxes to the ceo limit and give a waiver o the first $15k
2: For those folks who have patents related to thin film solar, make compulsory licences mandatory with a handsome royalty rate based on retail price. Same goes for thermal depolymerization/ diesel algae /whatever. More eyeballs on a problem the quicker the solution and both parties can make a profit off it while driving down costs and increasing efficiency.
3: invest in smart grid energy infrastructure; distributed power is the way to go.
also invest in high speed (point to point) rail. any city with it's neighbor 200 miles away should be part of a network.
THIS IS WAR
The quicker we gain economies of scale in alternative forms of energy we can tell the tinpot tyrants of the world to get bent and not only turn around our current account defecit(by exporting our solar tech) but increase both the amount of disposible income but the multiple as well.
I wonder if anyone has looked into the rise in energy consumption due to computers, data centers, etc.
If significant, CR and Tanta should make their posts only mildly interesting since the processors get really hot when the very good posts hit.
Alec:
...also invest in high speed (point to point) rail. any city with it's neighbor 200 miles away should be part of a network.
Any city? That sounds pretty silly. I agree one of of big problems is there are no regional high-speed rail networks. Here, you either drive or fly. But I think it would be important to pick the places most likely to succeed, or the project would never get anywhere. Start with LA to SF, places like that.
As to your point about patents, what makes those technologies uneconomic without subsidies has little to do with royalties and patents.
There are no easy ways out of this.
CR, the consumer's leverage to oil and natural gas prices is less than the actual commodity price. Crack spreads, for example, were quite high in 2005, and have moderated significantly. Transportation and distribution (fixed costs) account for a significant portion of the home user's natgas bill.
The benchmark light sweet crude contract also accounts for a small portion of total crude consumption in the U.S. Heavier grades have increased in price as well, of course, but not as much as the benchmark contract.
And, of course, industrial demand is more elastic than consumer demand.
So it won't be 14% of GDP. But it will almost certainly be higher than 10%.
i think nukes are around 20%, otherwise your piece makes a lot of sense. keep up the good work! clipb
Bob,
The point is that the problems are in areas of effiency or scaling, but due to patent protection no one else is gonna pursue the issue, just try and develop a workaround at best. With compulsory licences other folks who are either smarter,more experienced or better capitalized who feel they can do better can build the better mousetrap now rather than in 15-20 years. Those with the patents still have a head start, yet still can be rewarded or their ingenuity.
Example: My old man got a patent on a mobile bearing knee and licensed it to a company eventually bought by J&J. every other manufacturer said it was rubbish until the patent expired, then they all rushed out their version.
He still made out like a bandit, but wouldn't both him and the hundreds of thousands of knee revision patients been the richer if other device manufacturers had the choice of a copmpulsory licence after FDA approval?
Clinton administration was asleep at the wheel
That asshole was off having a blowjob and screwed up the country. Thank God we have a person like Bush in office that isn't getting a blowjob and making this economy hum!! Go McCain!
Troy asserted "The Prius gets its best mpg at 20mph (100mpg) and it's all downill from there."
I don't drive a Prius, but will speak to the Honda Civic Hybrid. Like most cars, it requires speeds well above 20 MPH to amortize out the fixed energy costs and get in optimum gearing, thus finding a peak. From my own experience, that peak is in the 50-55 MPH range. [My best Oakton VA to Alexandria 27-mile morning commute was 63.7 MPG; I know whereof I speak.]
A rental Mercedes 190D I drive in Germany actually had a MPH (ok, liters per km) vs. speed graph in the user's manual. It peaked around 60 MPH.
Finally, such a curve is based on a single car breaking all the wind by itself. I never draft closely, but have noted that in typical, dense checkerboard traffic on a 3 or 4-lane highway, I can make 75-80 MPH trips at 44 MPG going with the flow.
That's good enough for me, and the 55 MPH politico can stuff himself.
Information entropy
Entropy (information theory) - Wikipedia, the free encyclopedia
In information theory (FRIGGIN OIL) the Shannon entropy or information entropy is a measure of the uncertainty associated with a random variable. It quantifies the information contained in a message, usually in bits or bits/symbol. It is the minimum message length necessary to communicate information.
This also represents an absolute limit on the best possible lossless compression of any communication: treating a message as a series of symbols, the shortest possible representation to transmit the message is the Shannon entropy in bits/symbol multiplied by the number of symbols in the original message.
A fair coin has an entropy of one bit. However, if the coin is not fair, then the uncertainty is lower (if asked to bet on the next outcome, we would bet preferentially on the most frequent result), and thus the Shannon entropy is lower. A long string of repeating characters has an entropy of 0, since every character is predictable. The entropy of English text is between 1.0 and 1.5 bits per letter,[1] or as low as 0.6 to 1.3 bits per letter, according to estimates by Shannon based on human experiments.[2]
Bob,
regarding high speed rail:
200 miles is the zone where it's too far to drive as a commute, yet too close for airlines to fly economically.
LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air, but by HS rail due to stops, distance and topography it would be a massive financial sink hole. Same goes for PHX-LA-LV triangle.
Uncertainty and friggin inefficiency....hello, wake up, this is not about Clinton's blowjob, this is a matter of price inefficiency and manipulation related to price fixing and The Bush Coup is an active part of this collusion!
Is there anyone here, other than me, who owned a 1.6 ltr Rabbit diesel?
47 mpg highway.
BB whose entrails were you reading?
The best energy policy is by T. Boone Pickens. His is:
Who cares about fuel economy ? We can have free health care and ever increasing stimulus checks forever so the price of fuel is inconsequential.
The NEW NEW DEAL! The GREAT entitlement society.
Best energy tip: Wool and chocolate:
1: Icebreaker
2: Order Gourmet Imported Chocolates, Chocolate Bars & Hot Chocolate from World Wide Chocolate
MP, first car was a used rabbit, but it was regular old gas. I believe i made around $3.50 an hour at my summer job. And a fill up was probably $9 or $10.
Min wage now is $7.50 in some places, right? Probably $40-$45 to fill up the rabbit these days.
At least we don't have to worry about wage inflation.
mp...our jitney, a beat-up old Honda Civic, gets 50/mpg. Scoots around pretty good.
Down and out in Las Vegas -
Americas, World - The Independent
me thinks that our booyaa butthead would think this a good thing.
peugot turbo diesel... not quite that good..
Ok, Ya'll,
"If" GDP can be a percentage of GDP, then anything can be, right? Any ratio can be expressed, but what does it represent? As a percentage, I know that in general, people consume on average X amount of chocolate, or X amount of taters, or vodka or whatever, so the question here is, does GDP actually reflect or represent consumption in terms that are comparable?
This is a serious question, and it would be nice to get some feedback.
Ooops, delete, delete,
That should read: If" >>oil
Energy efficiency increases in housing, transportation and industry have been huge in the last 2 decades in the US. Just not quite as huge as the increase of energy costs.
On the other hand, far more products today are made with direct petroleum content.
Energy (oil) is not a bad from a supply/demand viewpoint; I think speculation has driven prices higher and I think there is a sort of willingness of energy suppliers to not rock the boat - to go along and form a sort of monopoly of consent. This is much like what is happening in the lumber industry in the US - mills are closed and that decreases supply, but since demand is down in balance with that, prices stay relatively stable. The margins for the industry are OK at the reduced supply point, so why not just go along? Assumptions about how free markets work always assume the existence of a free market and, increasingly, we do not have those.
People who think we can have a good economy any time soon are crazy. With 71% of the economy being consumer related, where are they going to get more money? Not from credit, housing or wage increases.
"LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air"
After you factor in travel time to the airport, parking, security, delays, etc, the time differential is much less. I'd rather drive.
I can remember driving down to LA late one night in a rabbit at full throttle. At that speed, cops would rarely catch up with you. I was cruising at 95 mph when I saw lights in the rearview mirror. They were rapidly gaining on me. A cop I thought. Finally I slowed down so I wouldn't get a ticket. The car passed and it was an old El Camino. I quickly returned to cruising speed, but the El Camino drifted out of sight in a few minutes.
I had an old VW Rabbit diesel, I loved it.
When I lived in Ireland I drove an Isuzu diesel pickup. It was a crew cab 1 ton truck with a torquey 4 cylinder engine and it got over 30mpg. I could tow or haul anything in that truck that I could here with an F-350 getting less than half the gas mileage.
My record las vegas to san diego(pb) was 4hours five minutes...rio to pb
My guess is that there will be screams soon as utilities cut service to deadbeats unable to cope with the new rate structure.
Already happening. SCE here in LA is reporting record shutoffs due to non-payment.
i can't wait: in twenty years the post carbon nostalgia should be peaking
tj- "Already happening. SCE here in LA is reporting record shutoffs due to non-payment."
tj, have you a link to that?
Plantagenet writes:
I agree with the swollen GDP and exported manufacturing ideas. But also consider the improvements in efficiency since 1971.
some of the appliances we have are more efficient, but some are not. how about all of those HDTVs and other devices that continue to burn electricity even when turned off as consumers do not want to be inconvienced by the amount of time it would take to warm. think about other appliances or elctronics that were not widespread in 1971 -- home PCs, microwaves, DVDs, etc. also, the square footage of homes have grown dramatically since 1971. hence, households are using more energy than ever.
High demand for low energy electronics
- NY Times
Got it. Residence electricity shutoffs rise 14%
Residence electricity shut-offs rise 14% - Whittier Daily News
From the Whittier Daily News article:
"Rachel Laing, spokeswoman for Southern California Gas Co., said the natural gas utility has seen a slight increase in the number of disconnected customers.
"With a bad economy, you would expect a larger increase, but it has been pretty stable," Laing said. "
Interesting. Electricity disconnects are up significantly in the LA region, gas disconnects are not. Wonder why? More all-electric homes/apartments down there?
GDP as a percentage of corn production and ethanol derivaties. If the GDP is related to energy consumption, we should be able to see that broken out in a pie chart... what the fuck is CR doing?
You want "core energy" consumption numbers?
Since no one has anything to say related to the topic here (hangovers?) let's go back 3 years or so:
Household Assets as a Percentage of GDP
The Big Picture
Re: Posted by: BC | Dec 3, 2005 5:04:33 PM
Real estate recessions come about every 20 years; something like 1952, 1973, 1990 and 2010.
The OneCAT is the car of the future.
See here and here.
..some 41 countries have lost three to ten percent of their GDP from rising food, fuel and commodity prices since January 2007. Over 30 countries have been hit by food riots, as the impact of the crisis reaches the household level, said Mr Zoellick.
For those folks who have patents related to thin film solar, make compulsory licences mandatory with a handsome royalty rate based on retail price.
eBay v. MercExchange is pretty damn close to compulsory licensing.
Electricity disconnects are up significantly in the LA region, gas disconnects are not. Wonder why? More all-electric homes/apartments down there?
It's SoCal. Gas disconnects will rise once heating is required. Electricity powers the A/C among other things.
Triple Whammy Fuels Economic Doubts
St. Louis Fed | Page Not Found
All in all, increasing energy prices will likely impart further downward pressure on the growth of real household income and expenditures, and, thus, also business sales, earnings and capital outlays for the remainder of this year. These drags on economic growthfinancial, housing and oilhave increased the risk of a recession this year. Although the recently passed fiscal stimulus package may provide a modest, albeit temporary, boost to growth, forecasters and the FOMC expect real GDP growth this year to be 1 percent or less.
The American economy is in a recession, which is projected to be short and mild, while oil will likely trade at $91 a barrel by the end of the year, though the range of that forecast is plus or minus $50, Standard & Poor's said Thursday.
"I don't think it [the U.S. recession] will have as much downward impact on commodity prices because [a lot of] commodities demand comes from outside the U.S.," said David Wyss
Calculated Risk: S&P: Oil at $91 Year End, +/- $50
These people are manipulating markets and they are fucking assholes that should shut up and stop hyping bullshit; furthermore, this blog is full of stupidity and very few people are on topic, as usual, maybe we should talk about reality modeling opportunities and pretend we know who will win the next chili cookoff in Peru.
Was that witty enough?
Geez this blog is stupid, what's eating you?
If you think it is so stupid, why not
direct your eyeballs someplace else?
what ll sez
Bob,
regarding high speed rail:
200 miles is the zone where it's too far to drive as a commute, yet too close for airlines to fly economically.
LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air, but by HS rail due to stops, distance and topography it would be a massive financial sink hole. Same goes for PHX-LA-LV triangle.
Re: If you think it is so stupid, why not
direct your eyeballs someplace else?
I am, I'm on to the next blog
Oh wait, we don't have a National Energy Policy?
What? Defacto policy implemented by lobbyists isn't turning out so great? But... I've been assured that the lobbyists are only thinking about what is best for all of us!? Darn you Fox News. Darn you to H. E. double hockeysticks!
LA-SF is 350-400 miles; too far to drive except for special occasions, barely an hour by air, but by HS rail due to stops, distance and topography it would be a massive financial sink hole
I've taken the Tokyo to Osaka shinkansen several times. 345 miles. Only a couple of stops -- they've figured out how to run a timetable and interleave express trains between locals on the same tracks.
We can argue about the sinkhole aspect -- I agree it wouldn't be cheap, but ISTM that we've got a lot of productive overcapacity so it's more of a question of national will than money.
Law,
Re: "Geez this blog is stupid, what's eating you?"
Nothing was even close to being resolved here, just off topic after OT and then nothing on track. The percent of GDP as a slice of pie for anything was never discussed. This is an example of a dumb topic for S&P and then misinformation and confusion related to nothing... what is the point?
Sorry for the lenght but feel this is neccesary.
As to the post about Dana Milbank: According to Wiki he's Skull and Bones.
Comment on GIM regarding Swagel's press conference:
Verdict:
1) Staged. Come on... five or six reporters? Skull and Bones?
I think it went down as simple as this: "Okay you go out and act nervous, use common economic code words all the movers and shakers will recognize as big trouble, and then we will have one of our S&B brothers in the media, maybe Dana, point out again and again how nervous and unconfident you are during his report."
2) It is not meant for the masses...it is meant to be seen by the movers and shakers who also will see this video.
It is meant to create a larger ripple. Yup, they are pro-actively crashing this economy.
Furthermore, over the last decade the US has moved industrial production offshore so energy for that use has declined while energy for residential use has increased to take up the slack. SO looking at energy as a percent of GDP is makes things look better for consumers than they really are -- because today consumers are much bigger energy users than industrial concerns.
uuu--why?
Prepping for the Amero? Signaling to other Illuminati? Because they can and "wtf can you do about it anyway" taunting?
"What artificial lending standard are you talking about?"
Lawyerliz ,
It's just another drive-by troller.
...also invest in high speed (point to point) rail. any city with it's neighbor 200 miles away should be part of a network.
-Bob_in_MA
What is going to reduce energy consumption related to commuting the most here in the US isn't HIGH SPEED so much as it is the AVAILABILITY of any alternative service for the most commuters possible that doesn't require sitting in a slowly moving parking lot every morning and evening. Really, the winners here are going to be providing a service that gets you OUT of your car as quickly as possible into a TRAIN that MOVES, not necessarily quickly, but one that MOVES, and gets you to your destination in a predictable manner. It isn't about the transit time between nodes, it is the efficiency of getting TO and FROM the NODES themselves to ride the rail that happens to move and is predictable.
Oh.
Or possibly satire. Maybe my satire detector was temporarily turned off.
Plantagenet:
The '69 Electra's equivalent is the Ford Explorer, not uncommon hybrids. The benefits of newer appliances have been overwhelmed by more computers, cell phones and ipods that didn't exist back then; and of course, a greater sum of TVs, air-conditioners and the like in more houses and commercial buildings that are bigger and therefore consume more heating, cooling and lighting on the whole, despite the greater efficiency of their parts.
What part of "oink" don't you understand?
uuu, theres a saying "people plan, god changes".
i think that the elites may plan for amero, but will they succeed? they planned for EU constitition and it failed. and in regard to amero dont forget the canadians are not so hot to become a part of us, besides they already sold their oil sands to the chinesse.
ou well, the chinese, good that i mention them. somehow everybody forgot about the asians in general you know, these guys who own something like 3 tril usd in reserves?
what would they say about amero as a way to escape the debt burden of us? or how long do you think would the rulers of arab world stay in power should us default and try to put amero in place.
and yes, the chinnese and japannese. well the western elites may have outplanned themself into bringing the asian elites into power, and i doubt highly that there are s&b members in japans and chinas elites.
"people plan, god changes"
Per capita U.S. energy consumption - virtually constant since 1971. 35 years:
http://www.eia.doe.gov/emeu/aer/pdf/pages/sec1_13.pdf
This group has often posted on the subject of the impact of energy prices on the over all economy. There will be demand destruction for gasoline, but not that much because transportation for work and movement of food is darn near a fixed cost. The reduced consumption will come in clothing, sporting goods, furniture and other discretionary items. Watch the strip malls close up and unemployment jump. Interesting times and thanks for the great chart.
Per capita U.S. energy consumption - virtually constant since 1971. 35 years
-wally
Interesting table. Compare the virtually constant Per capita U.S. energy consumption in Btu against the column "Energy Consumption per Real Dollar of GDP". That one has consistently been falling over the years. Both columns taken together tell me that the energy actually consumed by individual people has increased greatly while energy consumed in the workplace has went down considerably.
It would be very enlightening to tease apart the second case. How much of the energy decrease in the workplace is attributable to:
a) Fewer energy intensive industries no longer being as prominent here any longer (steel, i.e., more service economy)
b) Energy Efficiency improvements over time in the same workplace(s).
c) How much of this is due to there being more "Real Dollars of GDP" being created due to non-energy productivity improvements.
This species of ours does best as a generalist species. But because we are so clever we always forget and specialize. A hundred years ago we staked almost everything on petroleum. We are learning what happens to specialists.
they took off their red shirts writes:
Bob, I think what you meant to say was:
While the demoKrats and Obamaiacs whisper to Iran "Go for it...sort of reminds one of what FDR did with the S.S. St. Louis.
Red Shirts: don't feed the trolls.
At $140/ barrel, oil imports are costing $517 Billion per year in trade deficit.
In 2007, our trade deficit was $712 Billion ($815 BOP).
Will oil account for more than 50% of our trade deficit in 2008? Looks that way.
What about the energy used to produce and ship all the crap that Americans consume?
True American energy consumption is underestimated, especially when you compare 1970 (when stuff was made in the US) to today!
This kind of math error in the cited article is actually all too common. I also noticed this one immediately, but like CR I think in terms of numbers and always extrapolate, so its easy for me to see. Most national publications should have an expert math person on staff to review for these commonplace errors by competent writers who are incompetent in basic math stuff.
FLASHBACK: Ten Years Ago, Bin Laden Demanded Barrel Of Oil Should Cost $144
Think Progress
Bin Laden didnt have to become king of Saudi Arabia to achieve his goal; in fact, Bushs policies delivered it for him.
While there is a certain amount of luck for bin Laden in having Bush as president, we also should recognize bin Laden is a fairly smart fellow, and outsmarting Bush was necesary for him, and he's done well in several ways in that regard.
More important than the level of energy/gdp is the relative change, which is huge. According to your calculations, the share will increase from 10% to 14% of GDP in 1-year. And a big chunk will go abroad (to the Middle East). So that the US economy (households, companies and the govt) are suffering a huge shock on their income statements... Look, not just households, but also the rest of the economy... it seems that after the effect of the fiscal stimulus vanishes, we will see some hard times for the US economy... the ones who think that the job market will improve rapidly will be very disapointed... and the FED is surely worried about that.
The BEA produces data on nominal energy CONSUMPTION which may be compared with nominal total conumption or nominal disposable income. These data may be updated to the second quarter fairly easily, easing retail energy price change. We are surely not back to the 1971 level. Indeed, the rise recently exceeds the hit from the 1973 shock, the 1979 shock or the two taken collectively.
SO.......energy as a % of GDP has remained steady since 1970, and GDP has
increased 4x in that same span? sounds
like we are being pretty efficient over
time.