Unilateral Disarmament ( Steve Forbes )

forbes.com ^ | 06.16.08 | Steve Forbes

[kellynla]

Has the Federal Reserve run out of bullets? that implication could be drawn from the recently released minutes of the Fed's last Open Market Committee meeting, during which the federal funds rate was cut from 2.25% to 2%. The Fed hinted that no more rate cuts are in store and that the economic horizon is becoming cloudier. (The reason our central bank can't reduce interest rates further is that the inflation picture is getting uglier.) Stocks tanked on this news. However, the Fed has yet to use its most effective artillery: strengthening the value of the U.S. dollar.

[Red Boots]

One favorite energy alternative loved by greenies is windmills. The problem is that these things kill birds by the thousands. One notorious example is a wind farm in Altamont Pass, Calif. In their 27-year lifetime these wind turbines have dealt a grizzly end to upward of 130,000 birds. And these aren't just plain, everyday birds. For example, between 75 and 116 golden eagles are sliced to death each year. H. Sterling Burnett, a senior fellow at the National Center for Policy Analysis, points out a basic conflict: Wind farms have to be places the winds blow steadily, which often also happen to be areas favored by raptors and migratory birds.

If you as a person killed a migratory bird, you are in serious trouble. The fines are steep.

But the real problem with windmills is that their power costs way more than other sources, and is so erratic that it causes more coal and natural gas to be burned than if not used.

[stockpirate]

If oil killed that many birds in the same time frame oil would be BANNED.

[Travis McGee]

[TigerLikesRooster]

So Steve wants to see financial sector slaughtered? Somehow I doubt that anybody would bite that bullet right now.

[Piquaboy]

Who was standing around counting all those killings?

[Mr. K]

Anyone remember STAGFLATION?

It is where you have a stagnant economy yet high inflation.

Last time it happened we had gas lines, high gas prices and mortgage interest rates at 18%

[Red Boots]

If oil killed that many birds in the same time frame oil would be BANNED.

Yeah- remember all the money and effort to clean off a few thousand sea birds after the Valdez incident ? The law suits continued for years.

[RSmithOpt]

Time to start inching rates up IMHO. The financial sector and Congress screwed up with so many types of unregulated derivatives that the same money was essentially being loaned out over and over again.

A catastrophe for the economic health of this country.

Ben-Ben printing more money hasn't helped neither as well as continued Congressional deficit spending, lack of tax cuts to the average American, and the reduction of the sizer of the federal government.

We need more nukes to come on line...roughly double the amount scheduled by 2020.

[MinnesotaLibertarian]

Excellent article. Forbes hits the nail on the head. My vote for Forbes in the 2000 primary is one of the few I don’t regret.

[Tolik]

hear! hear!

[The Great RJ]

The demise of the Phillip curve was during the stagflation of the Carter administration when unemployment and inflation were going up simultaneously ...something Keynesian economists said couldn't happen. It took Reagan's painful decision to ride out the Carter recession without pumping more money into the economy to end stagflation. It was bitter medicine, but it worked. Congressional Democrats and the Fed are setting the country up for another round of stagflation and it will take someone with Reagan's vision and leadership to get us out of this mess.

[ex-Texan]

Former Federal Reserve Chairman Paul Volcker, who headed our central bank from 1979--87, warned months ago that what is happening reminds him of the early 1970s, when serious inflation first hit the U.S. and global economies . . .

I remember the 1970's. Nixon was forced to move on inflation and froze the salaries of Americans by Executive Order. He got away with doing so because, at that time, he was very popular. The only way to move up economically was to move on to a new job. Thousands did so willingly. Others changed careers or went back to college. Those that did nothing at all were stuck marching in place.

Click on my FR handle if you are so inclined. I posted a report on housing prices over the weekend.

[quant5]

You are correct, depression can be avoided if the nation launches an energy independence program now. Do you see the three Presidential contenders making this a core issue? I don’t. Our real issue is that we are a service economy. There is no room for wage inflation to keep up with commodities inflation. The nation must innovate and give the global consumer what it wants and that is cheaper energy and agriculture.

Rates must go higher to strengthen the dollar and I expect the FED will act in August, raising rates to 3.25% and steeper moves in the fall back to the 5% range in early 2009.

[RSmithOpt]

I hope you are correct on the rate moves. A lot of people are staying home this summer because of fuel and food prices.

[PapaBear3625]

But the real problem with windmills is that their power costs way more than other sources, and is so erratic that it causes more coal and natural gas to be burned than if not used.

Same deal with solar.

Visualize a town that has every house equipped with solar panels on the roof, supplying 50% of the houses' daytime electricity.

Now visualize being the electric company that sees their load jump 80% every time dark clouds pass over the town. No power company would want to see such potential sudden load variations

[SJSAMPLE]

I made the decision three years ago that I could live with a paid-off, ten-year-old Chevy instead of something new.

When you have no car payments, the price of gas becomes less of an issue.

I’m driving to Florida on Wednesday morning.
I figure I’ll spend about $400 on gas for the trip.

[RSmithOpt]

I hear ya!!1 My last truck payment (A 2003 Ranger) is this month...just in time to pay Big Oil and the speculators all they want. Have a safe trip!!

[SJSAMPLE]

Thx.

Enjoy your new-found “wealth”.

I don’t know where the money’s going, but it isn’t to GM ;)

[quant5]

Hard times in the land of plenty.