State Workers to Feel the Economic Pain

Downsizing is all across the news reports, and all over America is talk about all of the fifty states having a hard time meeting their budget obligations. Governors are cutting corners where they can and still more cuts are needed. It’s the same scenario in privately run businesses as well. If the customer is cutting back and not visiting your business with paid orders then the only thing to do is cut back where you can save the most money the quickest way possible. Survival of the business aka state government service is the end objective.

That means layoffs and if the private sector is suffering that inevitable choice then the public works, government service, and government agencies must do the same. If taxes are not being paid into the state governments to keep up with the payroll of that state then they can’t pay out for services expected by its citizens. But is layoffs the only choice Governors have? I personally do not think so. Over at MSNBC courtesy of the Associated Press they have this thought on it…

Governors seek sacrifices from public workers
Money-saving measures include pay and benefit cuts, truncated workweeks

COLUMBUS, Ohio - Governors across the nation are seeking significant concessions from public employee unions in hopes of helping to balance their teetering budgets during the economic downturn.

From Maryland to California, Ohio to Hawaii, governors have asked or ordered state workers to accept furloughs, salary reductions, truncated workweeks or benefit cuts. They say the concessions are a better alternative to further job losses in the face of record-breaking unemployment.

Unions argue their members shouldn't be singled out and are even more vital in hard times — securing neighborhoods and prisons, educating children and providing social services to growing numbers of citizens. - MSNBC-AP

I’m personally a huge union workers supporter but I am also a realist that sees that the states can not be paying benefits and providing services when the money is just not their to do so. With the credit markets tightened to the point of a stranglehold on businesses, it isn’t like each state can go to the credit markets and float bonds till things pick up in the economy. Wall Street and the markets just do not work that way. States can also not rely on the federal government to support all of them with a total bailout till the point of if and when the economy starts to recover. That thought process is the way to total economic destruction far beyond the Great Depression of the early 1930’s.

Governors in all states need to look to the budgets they currently have and cut wherever is required. They must also negotiate with not just the unions that are the employees of the state but the suppliers of all items including benefits to the state first and foremost. If they have to combine bargaining power with adjacent states to gain far better rates, then so be it. It’s called demanding better terms from your suppliers. Be it health insurance, paper products, light bulbs, paper clips, or even new equipment for law enforcement. If you have ever known someone that has worked in the private sector in purchasing, its called getting the best terms and rates for your company and it is called competition. If one supplier isn’t willing to negotiate, you move on to another, and another till you get the price you need to maintain your business. Some people call it beating up your vendor but I like to call it the art of negotiation. Each participant knows the value of the deal and each person is looking to find the perfect price where both parties are happy. The purchaser is happy and the seller is happy. AKA, its business 101!

Each state in the union pays millions if not billions for gasoline and diesel per year for the fleets of vehicles they own, millions if not billions to heat or cool state run offices all across each state. It doesn’t take a rocket scientist to figure out that the energy suppliers need your base business to survive. Demand competitition from your current suppliers and then seek out alternative sources for the same products. Wind power, solar power, bio-fuels, and the list goes on.

There are still many investors in the market looking for state bonds that make sense. If a bond was floated from Massachusetts or any state just for the sake of paying salaries and maintaining a payroll the state itself could not maintain it would have little interest in the markets on Wall Street. If the same state came out with a bond based on putting 100,000 or 250,000 solar panels on state run offices that would save the state millions of dollars per month once installed that would never have to be paid to an energy utility for the next thirty plus years it would draw huge attention, and not just here in America on Wall Street, but around the world. The beauty of the “Purchasing Negotiation” is that you could demand that each unit purchased will not be paid for till it is installed and generating power. That should work out to a thirty to sixty day payment deal for the manufacturer if they take the initiative to hire qualified people and install each and every single unit on the state buildings. Something that they could and should take the initiative to outsource to mulitple companies across every single state. More jobs, more state tax income.

Those savings even with repayment of the bond could equal thousands of state jobs and services that are needed elsewhere. It is the initial investment that is needed and we have several Solar Power Panel manufacturers right here in the United States of America that could and would benefit with increasing the workforce to meet the demand of high tech jobs at good wages. Schott Solar of California has a manufacturing facility in Billerica, Ma and Evergreen Solar of Marlborough, MA has a facility in the former Fort Devens military base to name just two.

President Obama is on the right track with his renewable energy initiatives in the current bailout package and the states need to look at the thought processes behind renewable energy and apply the thought process in public buildings all over the nation. If solar panels on the roof are paying 10% to 30% of the energy needs then how many jobs does that save in the public sector? Same thought process goes to private businesses as well. Back in the mid 1980’s I worked in a wire and cable manufacturing facility, the building was about 300,000 square feet full of equipment that was all powered by the local electric utility. The monthly bill at the time for the power was over $30,000 dollars. Then you had to figure the cost to heat such a large facility by gas per month and the bill was even larger than the electric in the winter months.

Even with the current drop of the cost of oil, the largest bill for any business other than raw materials is the energy cost. Cut that cost down by going with multiple renewable energy systems and the probability that you never pay an electric bill or gas bill ever again is within reach! How many jobs is that bill paid to the electric or gas, oil, propane company worth every month to any business or a greater point, how much does that allow you to pass those savings onto your customer and get the business you could never touch before? Our economy is built on competition and innovation, we need to look at the innovations not just in the private sector but in each of our state governments.

Each of our states need to be creative budgetary wise and think long term when it comes to their energy needs. Payroll is not the biggest cost they have but it is the easiest to cut. Demand more long term economic thought process from your state Governor and Legislators!

Papamoka

Saudi Arabia and Oil’s Future

Saudi Arabia does not fear the current drop in oil prices, matter of fact it tells them that the business needs to be reevaluated with intense scrutiny. 60 Minutes with Lesley Stahl did a great piece on what the Kingdom of Saudi Arabia is doing to hedge their bets for the future of oil. According to the report, Saudi Arabia would like the price per barrel to be at $55 in order to support all of its production costs and government obligations.

They are bringing online two oil fields that will be able to supply close to three million barrels a day alone in 2009 with new technology that can find every last drop of oil in a field that would supply oil for the next fifty years. According to the piece, that is more oil per day than most Middle East countries can supply per day today. Lesley was able to get the gentleman in charge of the oil fields to admit that the cost to produce one barrel of oil all across the kingdom is less than $2 per barrel and yet the two fields they are opening up in 2009 they paid cash for at the richly sum of $60 Billion dollars.

Trust me, I am having no pity for the Saudi Oil Kingdom that sat back at the pool while the cost of a barrel of oil hit $147 per barrel. $147 dollars per barrel minus $2 production cost, then subtract say another $10 bucks per barrel for overhead and paying the kingdom heirs off for sucking the go go juice out leaves $135 per barrel pure profit! Multiply that profit by the number of barrels of oil they supply a day to the world and you have a disgusting amount of expendable cash. Or dare I say a savings account to pay for any new technology that serves their purpose and nations future.

I don’t begrudge them the mega gross profit they have received; I frankly admire them for repeating the P.T. Barnum business plan. If there was an American business that could earn that type of profit margin on any product and legally, I say legally for a reason, then all the power to them. What really scares me is the fact that Saudi Arabia is not being stupid with its profits and just spending away like drunken sailors on their first shore leave in six months. No offense to sailors, it was just an expression. Saudi Arabia is looking at wind power and solar power for its future offset when oil declines in use across the world. Saudi Arabia is looking at engineering the greenest fossil fuel engine the world has ever seen. Saudi Arabia is doing now what America should have done immediately after the oil embargo of the 1970’s and I have to applaud them for seeing the future need where most American industries do not.

Oil and gas prices are going to tank for the next few years and that cheap oil will pave the way for the decline in American and world research on expanding solar power technology, wind power technology, and every other alternative source to oil but the Saudi government is still going to toss hundreds of billions of dollars at these technologies every single year. From the spoils of this past energy crisis will go the investment and ability to continue the research that in a couple of decades will pay off enormously for the kingdom. Saudi Arabia in thirty years will be the largest exporter of green energy in the world simply because they invested in the technology today. That is the business plan that they are following and it is a damn good one! Maybe we in America should look at their plan and try to beat them to the moon so to speak.

When the cost of a gallon of gas is just $1.00 then where is the market for an alternative fuel that cost $3 for the same vehicle? When oil fed electric plants can produce a megawatt of power at two thirds the cost of a wind turbine then where is the market for wind power? Same goes for solar power and the list goes on for all the alternative energy initiatives when it comes right down to the cost of energy for the average consumer. It is a little disheartening but it is reality. Or am I wrong?

Papamoka

Energy Breakthroughs

Many people will look at this post and the attached video and call it voodoo science or just pure bunk. I’m beginning to think the time for the new Henry Ford’s, Thomas Edison‘s, and Albert Einstein’s has arrived and it is just in time. Thinking outside of conventional wisdom and even academic pretense is what it takes to be a true inventor and I’m finding that my research into new energy breakthroughs is simply amazing.

If the average homeowner wanted to take their home off of the electric grid the price can be a bit intimidating. Then there is the problem of location if the peak wind or sun just does not jive with the area you live in.

With the cost for a barrel of oil hovering at $140 per barrel today then I’m sure that backyard and garage inventors that are pissed off are very busy. Nothing spurs invention more than someone telling you that you will pay what they tell you the price is, you have no choice in the matter! New energy breakthroughs are coming fast and furious and many of them will in fact bust the oil market down to a whimpering whipped dog. No bull, no bear, just a whining, cowering oil market speculator dog.



John Christie and Lou Brits started this little project on their own some years back and it looks like they have a winner but as in all new inventions the road to marketing and production is not paved with gold. If you have any questions about the device, its availability you can check out the link at RexResearch.com or check out the Lutec company website that has a ton of info on the machine.

Amazing… Freaking me out because this machine they invented could take every single home in America or the world off of the energy dependence grid with further research. What the reality of it will end up being is that it will be bought up by some oil rich nation or company and mandated to the scrap bin forever for a very fat check!

Supply and demand my foot! I’ll let President Bush put his own foot where the solar panels aren’t working.

My thoughts are that Bill Gates and Warren Buffet should be placing a call to these guys and offer the cash investment to get the scales of justice in the oil markets balanced once more. While Obama and McCain are whacking one another upside the head on who has a better energy plan to reign in the out of control oil markets there is a machine sitting in Australia that actually is the answer to all of the worlds energy independence.

Papamoka

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The Short-Sightedness Of Al Gore's Crusade

BY MICHAEL LINN JONES

I'm very happy for former Vice President Al Gore. Being awarded the Nobel Peace Prize is an honor no matter the circumstances. Beyond that, however, I have a hard time jumping on Gore's bandwagon to "save the world."

From THE NATION I read this speech by Al Gore, A Precious and Painful Vision of the Future . I'm not saying that Gore's climate change crusade is all bad; quite the contrary. But, in his zeal to address the issue his approach and solution bank leave me rather skeptical.

So today, we dumped another 70 million tons of global-warming pollution into the thin shell of atmosphere surrounding our planet, as if it were an open sewer. And tomorrow, we will dump a slightly larger amount, with the cumulative concentrations now trapping more and more heat from the sun.

As a result, the earth has a fever. And the fever is rising. The experts have told us it is not a passing affliction that will heal by itself. We asked for a second opinion. And a third. And a fourth. And the consistent conclusion, restated with increasing alarm, is that something basic is wrong.

Indeed, without realizing it, we have begun to wage war on the earth itself. Now, we and the earth's climate are locked in a relationship familiar to war planners: "Mutually assured destruction."

SNIP,

More than two decades ago,scientists calculated that nuclear war could throw so much debris and smoke into the air that it would block life-giving sunlight from our atmosphere, causing a "nuclear winter." Their eloquent warnings here in Oslo helped galvanize the world's resolve to halt the nuclear arms race.

Now science is warning us that if we do not quickly reduce the global warming pollution that is trapping so much of the heat our planet normally radiates back out of the atmosphere, we are in danger of creating a permanent "carbon summer."

As the American poet Robert Frost wrote, "Some say the world will end in fire; some say in ice." Either, he notes, "would suffice."

But neither need be our fate. It is time to make peace with the planet.

SNIP,

We also need a moratorium on the construction of any new generating facility that burns coal without the capacity to safely trap and store carbon dioxide.

And most important of all, we need to put a price on carbon--with a CO2 tax that is then rebated back to the people, progressively, according to the laws of each nation, in ways that shift the burden of taxation from employment to pollution. This is by far the most effective and simplest way to accelerate solutions to this crisis.

The world needs an alliance--especially of those nations that weigh heaviest in the scales where earth is in the balance. I salute Europe and Japan for the steps they've taken in recent years to meet the challenge, and the new government in Australia, which has made solving the climate crisis its first priority.

Matthew O'Keefe of Papamoka Straight Talk recently wrote a piece, CLOCK TICKING ON BIG OIL. The title itself addresses the main fear put forth by Mr. Gore. Environmentally the party is over. Yet economically it is also. When it reaches the point that a temper tantrum by some Mid-East tyrant, or South American tyrant drives the price of oil up overnight, then it's time to take serious stock of where we are and where we're going.

Where we are is stretched over an oil barrel. I have not heard it yet put forth by anyone that there might be a cheaper, more abundant, and cleaner form of energy for daily use. There MIGHT be, but that political will mentioned by Mr. Gore is missing. While it is believed by many (including me) that the current administration is more than happy to let the chips fall where they may....this sacred "free market solution" fantasy....it is also fair to ask why Mr. Gore did not use his influence to have then-President Clinton get the ball rolling while oil was stable and relatively cheap.

Re-reading Gore's entire speech, I get this weird feeling like I'm listening to Noah demand that someone build an Ark; that the world is on the edge of total life-ending disaster. But Noah in this case is shouting from his private yacht.

To say that we are at war with our planet and must make peace with it goes beyond a rational warning to an incitement of irrational fear. Pushing for "carbon credits" is to me a nice hypothetical high school solution, but not much else.

And despite Mr. Gore's strong belief in the collective action of treaties and laws, there is NOTHING in economic terms that does the trick like individuality. Americans drive millions of cars dumping millions of tons of pollutants every year. Yet those vehicles give people individual freedom that is not going to be forsaken in favor of trolleys and light rail.

The push should be in the direction of what form of energy is used in the future. Let me pose this question: how far do most people drive their cars to and from work each day? Mat O'Keefe and I discussed this, and it is plainly clear that battery-powered vehicles would suit the needs of the vast majority of commuters.

New battery technology would have to be developed. In two areas..nuclear power and computer technology....private enterprise has done well AFTER the government gave things a shove.

Taxes of any kind affect economic affairs; that is easily understood. Carbon taxes as proposed are one-dimensional...they would make some people feel good (like tossing money into the Salvation Army bucket at Christmas) but would impact those at the lower end of the scale the most. Anyone who says that taxes can be imposed on businesses and not be passed on to consumers is either a fool or a liar.

Tax incentives on the other hand can always lure someone to take a chance. We desperately need leadership on this, no doubt. But scaring the hell out of people without offering hope through a clear and concise policy change is not helping matters.

I know; I know...Al Gore offers some but most of his message is that dire warning harangue. What opponents of Mr. Gore's climate change warnings must not lose sight of is that the debate about whether there IS global warming or not is quickly becoming irrelevant.

What counts most is that ticking clock on oil. Those with the power and influence are betraying national security by not giving us that clear and concise lead.

Towards a stable tomorrow, free of oil speculators and oil tyrants.
***********************
Cross-posted at Michaellinnjones.com

*****The Gore Hub has linked to this post...

Bite Me Big Oil!

For the first time in 32 years the Congress is actually doing something about the real energy crisis here at home in America. I’m not talking about supply and demand. I’m talking about the reality that our nation is ruled by OIL. All hail his Majesty the King paid for by a generous donation by Exxon Mobil, Texaco, Chevron and Shell etc, etc.
America has a demand problem and as the largest market user of all oil based products in the world there is a market to manipulate when the ones producing the product are netting mega billions a quarter. I’m funny that way, billions of dollars in profit’s a quarter, hmm do you think they are using that profit for the greater good? I don’t think so either. Trillions are to be made on the open market and when you have billions of dollars piling up quarter after quarter it posses a ledger problem that becomes an accountants nightmare. If it isn’t spent on “Research and Development” or other purposes investing in the corporation then those profits are taxable. Then again, maybe not given all the subsidies to the oil companies under W.

In a recent post here titled Saudi Arabia… Screw you Wall Street I talked about this very issue. Saudi Arabia has the ability to supply the market and the facts were revealed in the linked story that they can produce a barrel of oil for just $2! Supply is not the problem! Saudi Arabia is pissed that Wall Street is pointing the finger at them. Then again it’s a far stretch from $2 to the current market price of oil isn’t it? Who want’s to be the bad guy in this latest news buster, the guy in the white robes or the guy in the nice dark blue or black business suit? Frankly, it’s a toss up there but two guys in whatever form of dress mugging you is still a mugging.

American vengeance is a funny thing and when you as a President threaten our pockets with a veto on legislation that will only hurt the billions of profits of your base big oil supporters then we have a problem with King George once again. Two hundred and some odd years forward of the original American Revolution.

House Brushes Aside Veto Threat, Passes Energy Bill

By Jonathan Weisman and Steven Mufson
Washington Post Staff Writers
Thursday, December 6, 2007; 5:24 PM

The House today brushed aside a fresh White House veto threat and handily approved a sweeping energy bill that would raise automobile fuel efficiency standards for the first time in 32 years while mandating the generation of electricity from more renewable energy sources.

The 235-181 vote sends the measure to the Senate, where Republicans hope to strip it of tax hikes on the oil industry and renewable electricity mandates before a final version goes to President Bush. The White House objected strongly to the bill on multiple fronts, saying Bush's advisers have recommended a veto.

But with energy prices soaring, lawmakers from both parties expressed strong support for dramatic action, especially on auto efficiency standards that have not changed since the 1970s. House Majority Leader Steny Hoyer (D-Md.) called the package"nothing less than our nation's declaration of independence from foreign sources of energy."

Snippet and flick it…

The bill also includes appliance and light bulb standards that would effectively phase out the incandescent light bulbs invented by Thomas Edison by the middle of next decade.

To finance tax incentives for hybrid cars, ethanol production and renewable energy development, the bill includes $21 billion in revenue increases , including a rollback of $13.5 billion in tax breaks for the five largest oil companies. - Washington Post

King George and his cronies are looking at the death of big oil just decades down the road and they are having to change their shorts. Even though King George Bush has said over and over again that we need to raise the CAFÉ standards he must have done so with his fingers crossed behind his back. It is official with this up and coming veto that this President was never an American President. He has been nothing but a puppet of his friends and screwed his own people for the sake of a dollar. Not his personal dollars but he got to have a neat office that his Daddy had once, nice car, and all the benefits of being the Deciderer in Chief. Vacation benefits are huge too. Take the first seven years off and work the last one. He only has to work the last year because he by accident found the United States on a freaking map finally! He circled it with a crayola burnt umber if you were wondering.

I laugh at people that say that the price of oil is market driven. While two people at the gas pumps each spit on the pumps, one a Democrat, the other a Republican, one of them is right and the other is just pissed at the market. Both are making the same wage and both are spending more than they can afford just to put gas in the car to get to work. One voted for a Democrat that wanted change eight years ago and the other voted for a self proclaimed American King in disguise. Both have a son in uniform in Iraq. Both are on the edge of losing their homes. It does not matter what either one thinks anymore because we have all been sold out by the King.

Market forces in any field without control will rape all of the people without political recognition no matter what party you vote for in the middle and lower classes. There was a reason why the Democrats held control of both houses for so long. They never sold the middle and lower classes out as well as President Bush has done in two terms. They never trashed the Constitution and used it to wrap the days catch down at the lake because it was yesterdays news.

If maybe really but not for real elected twice President Bush, veto’s this energy bill and his veto is not overturned, then we will all know whom is voting for your future families energy needs. Look to the political Right side of the aisle to find the millionaires club that could care less about you as an individual person coming up with excuses why we still do not need a realistic energy policy. Then check out the largest contributors to their past campaigns and as always follow the damn money.

It all points back to the fact that the Republican servants in our American Congress will protect the money flow from big oil. It’s a huge amount of cash to swallow your pride. George Bush has proven the fact that his time in the White House is a precursor to a President in the steps of Franklin Delano Roosevelt. With so many lost under the footsteps of the Bush millionaires now running our nation it is inevitable that this will scenario must change come the next Presidency. It has too! That is why we all must vote.


Just keep repeating $2 to produce a barrel of oil! Voting Republican next election?

Papamoka

Cross posted at MichaelLinnJones.com and Bring IT ON!

Feel free to link to this post... or steal it! I won't tell anyone if you won't.

*****Washington Post has linked back to this post in Who's Blogging

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How is Coal to Diesel Fuel Bad?

Picture courtesy of the DOE

Somebody slap me upside the head as I pump the $3.00 dollar a gallon gas courtesy of our so called good friends in the Middle East and so called market driven supply and demand into the tank of my car. Is it a bad thing that we might think of looking at another source of fuel for the American Go Go machines we call cars?

When the price of gasoline is over the price of bread then there is a serious problem with the market and Wall Street and the CEO’s will reap the benefits of market based thievery. Start the egg timer because the first Billion dollar CEO benefit is just over the horizon and that is not a joke to laugh about.

Where some folks see the market as pure capitalism others see the market taking the bread off of our families tables to fuel the car that would have bought the bread.

Senate Democrats Propose Loans for Coal-Based Fuel Plants

By EDMUND L. ANDREWS
Published: June 13, 2007

WASHINGTON, June 12 — As the Senate began debate Tuesday on a sprawling bill to reduce oil consumption, top Democrats were circulating a proposal to provide $10 billion in loans for plants that make diesel fuel from coal.

The proposal highlights the horse-trading involving powerful industry groups as Democratic leaders push for legislation that would require higher mileage in cars and a huge increase in the production of renewable fuels made from plants like switch grass.
But many environmental groups are flatly opposed. “We don’t think the federal government should be subsidizing liquid coal,” said Erich Pica of Friends of the Earth. “From a global warming and an environmental position, liquid coal is an unacceptable source of energy.”

The bill is being circulated by Senator Jeff Bingaman, Democrat of New Mexico, chairman of the Senate Energy Committee and the energy bill’s lead author. Until this week, Mr. Bingaman had opposed big subsidies for coal-based fuels, saying that each new production plant would cost billions of dollars and that the economic uncertainties posed risks for taxpayers.

But in what could be an effort to fend off demands from coal-state lawmakers for bigger subsidies, Mr. Bingaman’s draft proposal would offer up to $10 billion in direct government loans for coal-to-liquid plants. - New York Times

I’m going to set the record straight here and now. As long as there is a Presidency that is hi-jacked by big oil in this nation then the rape of the people at the pump will continue. At this point in time the record breaking profits by all of the oil companies is not letting the so called leader of the free world walk away from the table that they have bought and paid for.

What I find truly and think that is ironic is that any Republican wanting to be considered for re-election thinks that this idea of Coal to Diesel is wrong. If the President claimed that we are addicted to oil then what is the problem with converting one of our nations largest resources to get away from oil dependence?

America will only be free when we find the sources for our energy needs from multiple sources that never have a knife at our throats. That requirement calls for alternative sources and research to make it happen.

Our nation is making progress on our energy needs despite the negligence of a President in the good old boys club. Wind energy is exploding, solar energy is exploding and the newest and latest moves away from oil dependence are happening regardless of the good old boy club.

Papamoka

Cross posted at Bring It On!

*****This post linked to on the Wall Street Journal