Steve Goulet » Economics

Boomerang by Michael Lewis

Steve — Thu, 03 Nov 2011 01:19:53 +0000

Boomerang: Travels in the New Third World by Michael Lewis

I appreciated Mr. Lewis’ even handed analysis of this financial nightmare. If you are looking for someone to blame politically for this crisis, you won’t find that partisanship here. Many of the personal stories and cultural observations were unique and entertaining, but the math is terrifying.

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Subsidizing both the Treatment and Cause of Type II Diabetes

Steve — Wed, 16 Sep 2009 00:32:46 +0000

From Michael Pollan’s Op Ed in the NY Times:

And so the government is poised to go on encouraging America’s fast-food diet with its farm policies even as it takes on added responsibilities for covering the medical costs of that diet. To put it more bluntly, the government is putting itself in the uncomfortable position of subsidizing both the costs of treating Type 2 diabetes and the consumption of high-fructose corn syrup.

Holly and I had this discussion last week. The high cost of health care in this country is linked to obesity, and our federal government is encouraging obesity with farm policy.

We’re spending $147 billion to treat obesity, $116 billion to treat diabetes, and hundreds of billions more to treat cardiovascular disease and the many types of cancer that have been linked to the so-called Western diet.

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An Innovation Bailout for Detroit

Steve — Thu, 20 Nov 2008 18:17:51 +0000

Eric Schmidt of Google recently gave a speech at the New America Foundation (a post-partisan think tank) in which he outlined the need for an innovation bailout for the US. Instead of simply bailing out failing institutions, we need to take this opportunity to revolutionize our economy, particularly our energy and transportation infrastructures.

Detroit needs an innovation bailout in the worst kind of way. But innovation doesn’t happen when entrenched interests (such as the UAW and GM executives) are fighting to keep the status quo. As a resident of Michigan I have witnessed the gradual decline of our automotive leadership and we are now at a crossroads. Should we continue to prop up a dying business model, or start fresh with a new one?

With $25 billion in automotive bailout money at stake, we need to think about the future. A quick and well planned bankruptcy would be the best way to initiate the complete overhaul our auto industry requires. We need all aspects of government (federal, local and state), along with private and other public entities, to help with this transition.

The scope of this endeavor is mind boggling. But the importance of hope, that a new direction could bring, cannot be under estimated. It is time for us to regain the upper hand by making a coordinated, well planned, drastic change.

What might this drastic change look like? The Chevy Volt is a good start. It’s all about efficiency — getting from point A to point B safely with the least amount of energy and emissions, saving the most money and reducing impacts on our surroundings. We need to cut total cost of ownership in half and in the process reduce carbon emissions. Build plug ins with smart technology so that drivers can easily discern the most efficient route to travel by providing real time feedback on traffic conditions. Enhance our electrical infrastructure to handle the requirements of charging vehicles away from home. Feed our energy grid with clean sources of efficient, low cost power such as safe nuclear, wind farm, geothermal and solar technology. Make energy efficiency and sustainable manufacturing technology the cornerstone of our automotive infrastructure.

Update (12/10/2008): Tom Friedman seems to agree. He mentions “Better Place”, a new car company startup based in Silicon Valley. Apparently they’ve already inked deals with Japan, Australia, Isreal and Denmark. With the bailout now in place, Detroit has chosen a slow, painful death. Time to go to a better place: http://www.betterplace.com

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Simplify, with Google’s Energy Plan

Steve — Mon, 13 Oct 2008 01:15:52 +0000

Can we all agree that the culture of waste, excess, and inefficiency in America needs to die quickly? Becoming more efficient with our use of energy is critical to breaking the cycle of debt. Energy is at the root of our wealth creation system.

I like where Google is going with this:

In particular, I believe we need to centralize our energy infrastructure on the electrical grid as soon as possible, including automotive transportation. Efficiency is gained when systems share a common infrastructure.

An automotive electrical grid will allow us to enable wind, solar, geothermal, natural gas and (responsible) nuclear to be used for transportation energy. Our existing electrical grid will need to be revamped to handle new inputs, and vehicular connectivity. The technology implications are huge and there may be some pleasant surprises in this area. We need them.

Our gasoline infrastructure will enjoy a slow and painless death, as gas stations are gradually replaced by charging stations connected to the same grid that is already accessible to most vehicles where they park while not in use. Simple, clean and less expensive.

Google’s Proposal for reducing U.S. dependence on fossil fuels: Clean Energy 2030

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Big and Bad – Malcolm Gladwell on the SUV Craze

Steve — Tue, 12 Jun 2007 16:44:35 +0000

Malcolm Gladwell, author of “The Tipping Point”, and “Blink”, wrote this article for the New Yorker back in 2004:

http://www.gladwell.com/2004/2004_01_12_a_suv.html

As is usually the case with Malcolm’s writing, his perspective on the SUV phenomenon is unique, informative, and entertaining.

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RED

Steve — Tue, 16 May 2006 19:16:53 +0000

This article is from the (RED) edition of The Independent, guest-edited for 16 May 2006 by Bono. Half the revenue from the edition will be donated to the Global Fund to Fight Aids.

Bono, Guest Editor: I am a witness. What can I do?

Published: 16 May 2006

May I say without guile, I am as sick of messianic rock stars as the next man, woman and child. I am also tired of average work being given extra weight because it’s attached to something with real gravitas, like the Aids emergency. So I truly try to tread carefully as I walk over the dreams of dignity under my feet in our work for the terrible beauty that is the continent of Africa. I’m used to the custard pies. I’ve even learnt to like the taste of them. But before you are tempted to let fly with your understandable invective, allow me to contextualise. Not for the sake of my vanity, but for the sake of people who are depending on you – the reader – to respond to the precariousness of their lives.

Picture this: a village where the disappearance of a whole generation has left children to bring up children (the Lord of the Flies syndrome).

I’m a witness to this. What can I do?

Or this: my new friend Prudence, who even if she had access to anti-retroviral therapies would not have shared them with her now dead sister or best friend Janny, because her fellow activists were more important to keep alive.

Why? Because picture this: most activists and trained nurses cannot afford the drugs available to us in any corner chemist.

I am a witness to this. I have watched these brave and beautiful souls who are fighting a forest fire of a pandemic with watering cans, knowing they will not see the light of a day when their work will be honoured. I have been a witness to their conversations around canteen tables, deciding who will live or die, because they do not have enough pills to go round. I’ve seen Zackie Achmat refuse his medications until he won his action against the South African government, forcing their hand on universal access. What a witness he was. And so I testify.

These firefighters deserve fire engines with sirens and low-flying aircraft with bellies full of of rain. At the very least, they deserve their situation to merit the classification of an emergency. Code Red, like Hurricane Katrina or the tsunami in south Asia, which swept away a hundred and fifty thousand lives. These were natural catastrophes. Africa loses a hundred and fifty thousand men, women, and children every month to Aids, a wholly avoidable disaster, a preventable, treatable disease.

(click here to read the rest)

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Persons of the Year

Steve — Sun, 18 Dec 2005 17:36:37 +0000

Bill Gates has given more to charity than any human being in history. Bono leveraged his celebrity status to entice the leaders of our richest nations to forgive $50 Billion in debt to poor countries. I wonder how many lives they have saved through their actions?

“For being shrewd about doing good, for rewiring politics and re-engineering justice, for making mercy smarter and hope strategic and then daring the rest of us to follow…”

“These are not the people you expect to come to the rescue. Rock stars are designed to be shiny, shallow creatures, furloughed from reality for all time. Billionaires are even more removed, nestled atop fantastic wealth where they never again have to place their own calls or defrost dinner or fly commercial”

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I Am Better Off Than 99.4% of All The People Who Have Ever Lived!

Steve — Fri, 08 Jul 2005 21:09:12 +0000

If you are a middle class (or higher) American you live better than 99.4% of all the people who have ever lived, including those that are alive right now. This is according to Greg Easterbrook in his book “The Progress Paradox”. Apparently there have been approximately 80 billion people who have lived on earth until now. Most of them lived without refrigerators, air conditioning, computers, great big television sets, high tech health care, and cell phones.

In fact, half of the worlds current population lives on less than two dollars a day (in US dollars). That’s 3 billion people living on a little over $700 a year, if they are lucky. 1.3 billion of them make only half of that. And things have really improved over the last 100 years.

So the next time I am feeling sorry for myself because I don’t have a tablet PC, or I can’t afford a new windsurfer, I will try to remember that I am a spoiled, fat, happy, healthy American with very little to complain about.

But I wonder, why are we so wealthy compared to the other 99%? Answer: Western society exploited fossil fuels early and often. Once we gained power through fossil fuel energy we used that power to gain more energy. Because of this early advantage we now have the equivalent of 80 slaves doing work for each and every one of us every day.

In other words, it would take the strength and energy of 80 people to provide the resources that each of us Westerners consume and use every day. Our “slave equivalents” can be found in our electronics, cars, washing machines, dish washers, vacuums, factories, and most importantly in the food we consume (and waste).

If you look at the societies that live on $1 a day or less, you’ll see that they consume very little (if any) slave equivalents. They aren’t exploiting fossil fuel energy like us. Their societies somehow missed out on the fossil fuel bonanza.

And it’s too late now, I’m afraid. The US production of domestic oil peaked in 1970, and world discovery of new oil peaked soon after that. Those of us who are used to living with our 80 slave equivalents are going to fight like hell to keep them, like the southern plantation owners who wouldn’t give up their slaves during the civil war. In fact, our entire economy of debt is based on the premise that we will have more and more slave equivalents as time goes by.

I won’t be surprised to see many of us joining the other 99.4% over the coming decades. There just isn’t enough cheap oil and natural gas to keep this party going for much longer. I wish there was another cheap energy alternative, but sadly there is not.

So it’s time for all Americans to stop and think about the future. Do you want our children to grow up without the comfort and safety that cheap fossil fuel provides? We need leadership and strength to prepare for an uncertain future. This could be the biggest disaster that mankind will ever face, and right now we are ill prepared.

For starters we’ve got to conserve oil and reduce energy use. When America gets serious about solving a problem, we are nearly unstoppable. It’s now or later, and later will be much harder when the cost of technology innovation skyrockets with the cost of energy.

We need to build walkable communities, not sprawling faceless suburbs connected by highways. We need to reorganize our production and distribution systems to work locally. And we all need to think about how we can get along with fewer slave equivalents every day. We have an incredible amount of work to do in preparation for some huge changes, now is the time to act.

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Walmart Loves China

Steve — Wed, 15 Jun 2005 15:36:07 +0000

We had a chance to watch the PBS/Frontline documentary on Walmart last night. Wow, was that eye opening! I had no idea that Walmart is bigger than Microsoft, IBM, HP, Dell, and Cisco put together.

And I also had no idea that Walmart is responsible for exporting thousands (or possibly millions) of our jobs to China. Their constant demands for lower prices have driven US companies out of business because they can’t compete with the low prices from China. Walmart admits that they buy over $15 Billion dollars worth of Chinese imports every year. Most analysts think the number is much higher.

According to Frontline “For several years, Wal-Mart has been the single largest U.S. importer of Chinese consumer goods, surpassing the trade volume of entire countries, such as Germany and Russia. Global sourcing is now fully integrated into the company’s operations — giving Wal-Mart enormous leverage worldwide. Foreign products account for nearly all of Wal-Mart’s trumpeted low opening price point goods.”

And when American companies try to defend themselves against unfair Chinese trade practices, does Walmart help out? Well, not quite. Walmart recently sided with China, and testified on behalf of them, in a federal anti dumping case that argued that China was breaching its trade agreements.

Together, Walmart and China are dominating the US economy. As our trade imbalance reaches epic proportions ($150 Billion with China this year), and our higher paying skilled labor jobs are exported, China continues to artificially limit the value of its currency. By keeping the Yuan at a fixed price against the dollar, China and Walmart will continue to drive down prices, feed the trade imbalance, export jobs, and disrupt our economy.

In principle, free trade is great, as long as it’s fair. But when a communist country fixes their currency prices in order to prevent an even playing field for global commerce, we need to take action to preserve our jobs and communities.

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