Rush Limbaugh has again shown his interest is in the political outcome as opposed to any sort of principles. Speaking recently he encouraged conservatives to get rid of open primaries, which let Democrats choose the Republican presidential candidate (since anybody can vote in either primary).
This is the same person who spent much of last spring encouraging Republicans to register Democratic so they could throw the Democratic primary (oddly enough, by voting for Obama against the stronger Clinton if I remember correctly).
But it's been apparent for a long time that Mr. Limbaugh accepts most any means to the desired outcome.
Tuesday, March 3, 2009
Tuesday, January 20, 2009
Obama presidency predictions
Barack Obama is now the President. A few predictions:
First, expect Alan Keyes and perhaps others to file new lawsuits. Mr. Keyes has filed a suit claiming Mr. Obama wasn't really born in the U.S. and is not eligible to be president. Chief Justice Roberts' s stumble over the oath of office now presents the opportunity for claims that Mr. Obama didn't really take the oath of office and so isn't really president. If the lawsuit goes anywhere expect the left to claim that Justice Roberts intentionally stumbled in order to create the problem.
The Democrats are celebrating that they have control of the government, yet this may be their downfall. For at least the next two years they have nobody else to blame for any missteps. Of course, the Bush presidency can be blamed for several years, and the Supreme Court makes another target until new justices can be appointed. But eventually the excuses might run out. Though they may not, FDR was able to win reelection twice without solving the depression.
First, expect Alan Keyes and perhaps others to file new lawsuits. Mr. Keyes has filed a suit claiming Mr. Obama wasn't really born in the U.S. and is not eligible to be president. Chief Justice Roberts' s stumble over the oath of office now presents the opportunity for claims that Mr. Obama didn't really take the oath of office and so isn't really president. If the lawsuit goes anywhere expect the left to claim that Justice Roberts intentionally stumbled in order to create the problem.
The Democrats are celebrating that they have control of the government, yet this may be their downfall. For at least the next two years they have nobody else to blame for any missteps. Of course, the Bush presidency can be blamed for several years, and the Supreme Court makes another target until new justices can be appointed. But eventually the excuses might run out. Though they may not, FDR was able to win reelection twice without solving the depression.
Tuesday, November 4, 2008
Church of England
For something non-political, a prediction of sorts.
N.T. Wright is a very well known theologian, academic, Anglican priest, and most recently Bishop of Durham. Wright spent 20 years as a university professor before being moved into official Anglican roles -- Dean of Lichfield Cathedral, Canon of Westminster, and most recently as a bishop. It isn't clear whether Bishop Wright initiated the move away from academia or if others have moved him into it. He continues to publish scholarly and popular works, but much slower than in the past.
My own thought is that the Anglican establishment looks on Bishop Wright as a candidate for Archbishop of Canterbury. He is a conservative / traditionalist in his theology and beliefs yet is not strongly dogmatic and open to discussion and the ideas of others. He is well respective by liberals and conservatives, including many who differ from his views.
Look for Bishop Wright as a candidate if a new Archbishop is to be appointed.
N.T. Wright is a very well known theologian, academic, Anglican priest, and most recently Bishop of Durham. Wright spent 20 years as a university professor before being moved into official Anglican roles -- Dean of Lichfield Cathedral, Canon of Westminster, and most recently as a bishop. It isn't clear whether Bishop Wright initiated the move away from academia or if others have moved him into it. He continues to publish scholarly and popular works, but much slower than in the past.
My own thought is that the Anglican establishment looks on Bishop Wright as a candidate for Archbishop of Canterbury. He is a conservative / traditionalist in his theology and beliefs yet is not strongly dogmatic and open to discussion and the ideas of others. He is well respective by liberals and conservatives, including many who differ from his views.
Look for Bishop Wright as a candidate if a new Archbishop is to be appointed.
Deception and today's election in Colorado
Colorado votes on a dozen or so voter initiatives today. This election is the most deceptive I've seen in over 30 years of voting. I'm not talking about political candidates (though there are enough scandals for conspiracy theorists to have a field day). Rather, look at Colorado's proposed amendments. There are 18 ballot measures. The way Colorado law works, the measures can be constitutional amendments, voter initiated laws, or voter repeal of laws. Most are consitutional amendments since these have to stay in force. Some proposals are regular laws, but the legislature could turn around and repeal the laws easily. Voter repeal of laws is rare, my understanding is that the legislature routinely marks laws as "emergency" to make them immune from a vote.
There are four main categories of initiatives today. Social conservative, pro business, anti business, and various tax initiatives. All new or increased taxes must be voted on in Colorado (and tax receipts over a set limit refunded) so there are always tax initiatives.
On the social conservative front, amendment 46 bans affirmative action, but is phrased as banning preferential treatment (e.g. ban discrimination) on the basis of race, sex, etc. Amendment 48 bans abortion by defining a person as being from fertilization. While 48 is clear, 46 is phrased as an anti-discrimination law (though it is against affirmative action, which many feel retores discrimination).
The pro business amendments are really anti-union. There are three, two of which don't even mention unions. Amendment 47 enforce "right to work" by outlawing required union dues. Apparently in response to the Governor issuing an executive order unionizing state workers (opponents view), actually only authorizing unions.
Amendment 49 limits the number of things public employers can withhold from paychecks. Now the deception begins. The primary effect of this law is to prohibit witholding union dues from paychecks. It is written to allow all other types of common withholding (charities, benefits, retirement, savings, etc). Proponents call it "non-controversial". Opponents never say what it does, just that it hurts workes.
Similarly, Amendment 54 is phrased as prohibiting campaign contributions from those who receive government contracts. But as written, it is only "single source" contracts, which as phrased is primarily labor unions (presuming most government contracts are by competetive bid). Here again proponents sahy it's not controversial, saying it doesn't silence unions, they just can't receive sole source contracts (in other words, a labor agreement with government). Opponents again don't say what it is, they just oppose it.
On the anti-business side, we have Amendment 53, which makes corporate executives liable for violating any law. This means violating any civil business law has just become a criminal offense. A late tax return (the accountant forgot to mail it) leaves the business owner criminally liable. Proponents say it's to reign in corporate fraud (popular today with the banking crisis, which will require a corporate scapegoat at some point). One note says it was done in response to Amendment 47 (right to work).
Amendment 55 requires that employees be fired "for cause", and lists the allowed causes. Low business income is not allowed, it says "documented economic circumstances which adversely affect the employer". It applies to businesses employing at least 20, but non-profits must employ at least 1000. Government is also exempt, of course. This one at least isn't so deceptive, other than that it apparently exists in response to amendment 47.
Amendment 56 requires employers provide health coverage, and 57 rqeuires "safe workplaces" and allows workers compensation recipients to sue. Interestingly, these 4 anti-business measure have been withdrawn. While they are still on the ballot, they won't count. Comments say that this was in response to a $3 million payment payment by business.
The tax increases all have their proponents and reasons. The increases generally have earmarks for the money, though in a deceptive manner (as has been done in the past) -- money is directed to a certain use such as education, but there is no guarantee that existing funding will remain. So the earmarked money goes to its purpose and the general state funding is reduced.
There is also the (standard these days) attempt to remove the effect of TABOR. TABOR, in addition to requiring votes for tax increases, requires that excess money be refunded to the people rather than kept by government. Amendment 59 earmarks all excess money to K-12 education (though doesn't protect existing funding, of course). Not mentioned is it appears to repeal a guaranteed increase in education funding which goes for a few more years.
Finally, the state is attempting to clean up the plethora of constitutional amendments. Since the only way to prevent the legislature from repealing a voter initiative is to amend the constitution (which is now a very long, messy document after 130 years of amendments), Referendum O makes it harder to propose consitutional amendments and requires a supermajority of 2/3 in the legislature to modify or repeal voter legislation. This is not too bad, but again the opponents are deceptive (misreading a provision on the number of signatures per congressional district).
So we see great polarization (extreme anti union and anti business proposals) along with the usual deception. The union and business amendments point to a much more polarized environment which seems to be appearing across the country (and even around the world).
There are four main categories of initiatives today. Social conservative, pro business, anti business, and various tax initiatives. All new or increased taxes must be voted on in Colorado (and tax receipts over a set limit refunded) so there are always tax initiatives.
On the social conservative front, amendment 46 bans affirmative action, but is phrased as banning preferential treatment (e.g. ban discrimination) on the basis of race, sex, etc. Amendment 48 bans abortion by defining a person as being from fertilization. While 48 is clear, 46 is phrased as an anti-discrimination law (though it is against affirmative action, which many feel retores discrimination).
The pro business amendments are really anti-union. There are three, two of which don't even mention unions. Amendment 47 enforce "right to work" by outlawing required union dues. Apparently in response to the Governor issuing an executive order unionizing state workers (opponents view), actually only authorizing unions.
Amendment 49 limits the number of things public employers can withhold from paychecks. Now the deception begins. The primary effect of this law is to prohibit witholding union dues from paychecks. It is written to allow all other types of common withholding (charities, benefits, retirement, savings, etc). Proponents call it "non-controversial". Opponents never say what it does, just that it hurts workes.
Similarly, Amendment 54 is phrased as prohibiting campaign contributions from those who receive government contracts. But as written, it is only "single source" contracts, which as phrased is primarily labor unions (presuming most government contracts are by competetive bid). Here again proponents sahy it's not controversial, saying it doesn't silence unions, they just can't receive sole source contracts (in other words, a labor agreement with government). Opponents again don't say what it is, they just oppose it.
On the anti-business side, we have Amendment 53, which makes corporate executives liable for violating any law. This means violating any civil business law has just become a criminal offense. A late tax return (the accountant forgot to mail it) leaves the business owner criminally liable. Proponents say it's to reign in corporate fraud (popular today with the banking crisis, which will require a corporate scapegoat at some point). One note says it was done in response to Amendment 47 (right to work).
Amendment 55 requires that employees be fired "for cause", and lists the allowed causes. Low business income is not allowed, it says "documented economic circumstances which adversely affect the employer". It applies to businesses employing at least 20, but non-profits must employ at least 1000. Government is also exempt, of course. This one at least isn't so deceptive, other than that it apparently exists in response to amendment 47.
Amendment 56 requires employers provide health coverage, and 57 rqeuires "safe workplaces" and allows workers compensation recipients to sue. Interestingly, these 4 anti-business measure have been withdrawn. While they are still on the ballot, they won't count. Comments say that this was in response to a $3 million payment payment by business.
The tax increases all have their proponents and reasons. The increases generally have earmarks for the money, though in a deceptive manner (as has been done in the past) -- money is directed to a certain use such as education, but there is no guarantee that existing funding will remain. So the earmarked money goes to its purpose and the general state funding is reduced.
There is also the (standard these days) attempt to remove the effect of TABOR. TABOR, in addition to requiring votes for tax increases, requires that excess money be refunded to the people rather than kept by government. Amendment 59 earmarks all excess money to K-12 education (though doesn't protect existing funding, of course). Not mentioned is it appears to repeal a guaranteed increase in education funding which goes for a few more years.
Finally, the state is attempting to clean up the plethora of constitutional amendments. Since the only way to prevent the legislature from repealing a voter initiative is to amend the constitution (which is now a very long, messy document after 130 years of amendments), Referendum O makes it harder to propose consitutional amendments and requires a supermajority of 2/3 in the legislature to modify or repeal voter legislation. This is not too bad, but again the opponents are deceptive (misreading a provision on the number of signatures per congressional district).
So we see great polarization (extreme anti union and anti business proposals) along with the usual deception. The union and business amendments point to a much more polarized environment which seems to be appearing across the country (and even around the world).
Sunday, August 26, 2007
Sub-prime mortgages, risk, and causes of financial crises
The sub-prime mortgage market is the current financial "crisis" in the United States. Comparing sub-prime mortgages today with the S&L crisis of 30 years ago provides interesting parallels and shows how the different mortgage market today has resulted in a different problem than 30 years ago.
Those under 45 or so won't remember Savings and Loans. Back in the 1960's and early 1970's there were several types of financial institutions. One which has not survived is the "Savings and Loan." A Savings and Loan could only accept money in savings accounts and only loaned money for house mortgages (perhaps also home improvement loans, I forget the exact rules). Savings and Loans could not provide checking accounts, auto loans, etc. which banks offered. On the other hand, S&Ls could have many branch locations, while banks were limited to a single office.
During this time most home mortgages were provided by S&Ls. The S&L would charge 6% and later 8% for mortgages, while offereing 3% (later 5%) for savings. Maximum interest rates were regulated by the government, limiting the rate charged for mortgages or paid for savings.
The S&L crisis started in the mid 1970's but hit its climax in the early 1980s with scandals about shady deals and bankrupt S&Ls. While many people remember the scandals of the 1980s, fewer remember the original causes in the 1970s.
To explain the S&L crisis, one needs to look at way the system worked and how it reacted to the high inflation and interest rates of the 1970s. Prior to about 1975 interest rates in the U.S. were fairly stable and regulated. As mentioned above, S&Ls loaned money at 6%-8% for home mortgages. Adjustable rate mortgages were illegal, and most mortgages were for 30 years. They were also "assumable", meaning that a buyer of the home could take over the payments (and balance) of the existing mortgage.
Another factor was that the secondary mortgage market did not exist. S&Ls and banks held their mortgages the full term of the loan, getting their monthly payments. Today's practice of bundling mortgages and selling them developed later in the 1980s and 1990s.
In the mid 1970s inflation started rising, peaking at over 13% in 1980. Prior to 1974 the inflation rate rarely exceeded 3-4%. With inflation rising, many people were not satisfied with the 5% paid on savings accounts (limited by law). They started moving money into higher yield investments and out of the traditional banking system. As money moved out of banks and S&Ls, they lobbied for higher interest rates, and the "certificate of deposit" was created. CDs could pay higher interest but had minimum balance and term restrictions. CDs stemmed the loss of money but increased the costs to banks and S&Ls. Remember that banks cannot create money out of thin air. If they loan money they need deposits to back up that money (yes, they sometimes only need deposits for a percentage of their loan balance, but they still need the deposits). The increased costs of higher interest paid on savings could only be made up by increasing loan rates. Banks were in fairly good shape -- most bank loans were for a few years (car loans were typically 3 year) so the bank could get income from increased rates fairly soon. Savings and Loans, however, were in a bind.
Savings and Loans had their money tied up in 30 year mortgages. While the typical American would move every 5-10 years, assumable mortgages meant that the low 6% of many mortgages had years and years to run. Savings and Loans could write new mortgages, but the new income could not make up for the higher interest paid for savings. Thus, by the late 1970s S&Ls were paying higher interest on savings than they received for mortgages. Since S&Ls held their loans until paid off, they were in a financial bind.
At this time S&Ls were given more freedom to do other things. They could offer checking accounts and begin to loan money and invest in other areas. However, this added flexibility couldn't solve the underlying problem and S&Ls proceeded to merge, fail, and in some cases commit fraud. By 1990, very few S&Ls remained, and those which did were called "Savings Banks" and were much closer to standard commercial banks.
Today we won't get an S&L crisis of this type. Since the S&L crisis the secondary mortgage market has evolved, and most mortgages are packaged and sold to investors. This avoids the S&L crisis because the buyers of mortgage backed investments pay up front and receive interest over the life of the mortgages. If mortgages are paid off early (due to falling rates) the mortgage backed investment is paid off early. If interest rates go up, the investor still gets the same amount from a mortgage backed investment (if backed by fixed rate loans). Assumable mortgages are also a thing of the past, so with the mobility of the US populations most mortgages probably exist less than 10 years, with the home owner moving or refinancing within that time.
With the changes in the market, the problem of long term loans financed by short term deposits no longer exists.
However, the new mortgage market has created its own distortions which reveal a new problem in the banking system. Today mortgages are originated by banks or mortgage brokers. These are then sold into the investment market after which the originating bank or broker has no part in rest of the life of the mortgage loan. Thus, mortgage originators are most concerned with getting a loan approved so they can receive their commission, a lump sum when the loan is sold.
This shows the source of the current sub-prime mortgage problem. Lenders have been becoming more and more lax over time. In the case of mortgages, there is intense competition to get a loan. I personally would receive several letters each WEEK offering to refinance my mortgage (I still average about 1 a day for a new credit card). Those who did not qualify for a fixed rate loan could get an adjustable loan at a lower rate. In addition, loan standards are lower. Traditional mortgage loans were for 80% of the home's value. FHA would allow up to 95% or 97% (with mortgage insurance). Today lenders offer up to 125% of a home's value, especially in shorter term home equity loans.
These new markets worked very well so long as home prices were rising and interest rates remained low. However, interest rates are rising. Because rates are rising, home prices are stalling (since part of the rise in home prices the last 15 years has been because a given mortgage payment could pay for more home as rates fell). With stalling prices and rising rates on adjustable mortgages, people who could barely afford their home are in trouble.
We now have a situation with rising default rates. This has severalcauses. One is people not realizing that their mortgage payment would rise and not being able to afford the rising rate.
Another cause is liberal lending practices by lenders who a more concerned with the immediate return of originating a loan than the long term prospects of repayment. A final cause is investors in mortgage backed securities not realizing how risky their investments are.
Tying this rather rambling discussion together, the S&L crisis of the 1980s was caused because S&Ls (by government regulation) had to make and hold onto long term loans based on short term deposits. This could not stand up to a rise in interest rates. Today's secondary mortgage market avoids the S&L type crisis but creates its own crisis -- liberal lending practices resulting in excessive foreclosures. In each case the "rules of the game" have created the environment. In the past, regulated rates that could not respond to high inflation. Today a system which allows excessively liberal lending along with a belief by many homeowners that housing prices would continue to rise indefinitely.
Unfortunately, the banking industry has adopted excessively liberal lending practices as a norm. Banks come close to forcing credit cards and credit card debt on consumers. The constant offers and credit line increases has been a minor problem for years and will become worse as time goes on, especially if interest rates continue to rise.
Those under 45 or so won't remember Savings and Loans. Back in the 1960's and early 1970's there were several types of financial institutions. One which has not survived is the "Savings and Loan." A Savings and Loan could only accept money in savings accounts and only loaned money for house mortgages (perhaps also home improvement loans, I forget the exact rules). Savings and Loans could not provide checking accounts, auto loans, etc. which banks offered. On the other hand, S&Ls could have many branch locations, while banks were limited to a single office.
During this time most home mortgages were provided by S&Ls. The S&L would charge 6% and later 8% for mortgages, while offereing 3% (later 5%) for savings. Maximum interest rates were regulated by the government, limiting the rate charged for mortgages or paid for savings.
The S&L crisis started in the mid 1970's but hit its climax in the early 1980s with scandals about shady deals and bankrupt S&Ls. While many people remember the scandals of the 1980s, fewer remember the original causes in the 1970s.
To explain the S&L crisis, one needs to look at way the system worked and how it reacted to the high inflation and interest rates of the 1970s. Prior to about 1975 interest rates in the U.S. were fairly stable and regulated. As mentioned above, S&Ls loaned money at 6%-8% for home mortgages. Adjustable rate mortgages were illegal, and most mortgages were for 30 years. They were also "assumable", meaning that a buyer of the home could take over the payments (and balance) of the existing mortgage.
Another factor was that the secondary mortgage market did not exist. S&Ls and banks held their mortgages the full term of the loan, getting their monthly payments. Today's practice of bundling mortgages and selling them developed later in the 1980s and 1990s.
In the mid 1970s inflation started rising, peaking at over 13% in 1980. Prior to 1974 the inflation rate rarely exceeded 3-4%. With inflation rising, many people were not satisfied with the 5% paid on savings accounts (limited by law). They started moving money into higher yield investments and out of the traditional banking system. As money moved out of banks and S&Ls, they lobbied for higher interest rates, and the "certificate of deposit" was created. CDs could pay higher interest but had minimum balance and term restrictions. CDs stemmed the loss of money but increased the costs to banks and S&Ls. Remember that banks cannot create money out of thin air. If they loan money they need deposits to back up that money (yes, they sometimes only need deposits for a percentage of their loan balance, but they still need the deposits). The increased costs of higher interest paid on savings could only be made up by increasing loan rates. Banks were in fairly good shape -- most bank loans were for a few years (car loans were typically 3 year) so the bank could get income from increased rates fairly soon. Savings and Loans, however, were in a bind.
Savings and Loans had their money tied up in 30 year mortgages. While the typical American would move every 5-10 years, assumable mortgages meant that the low 6% of many mortgages had years and years to run. Savings and Loans could write new mortgages, but the new income could not make up for the higher interest paid for savings. Thus, by the late 1970s S&Ls were paying higher interest on savings than they received for mortgages. Since S&Ls held their loans until paid off, they were in a financial bind.
At this time S&Ls were given more freedom to do other things. They could offer checking accounts and begin to loan money and invest in other areas. However, this added flexibility couldn't solve the underlying problem and S&Ls proceeded to merge, fail, and in some cases commit fraud. By 1990, very few S&Ls remained, and those which did were called "Savings Banks" and were much closer to standard commercial banks.
Today we won't get an S&L crisis of this type. Since the S&L crisis the secondary mortgage market has evolved, and most mortgages are packaged and sold to investors. This avoids the S&L crisis because the buyers of mortgage backed investments pay up front and receive interest over the life of the mortgages. If mortgages are paid off early (due to falling rates) the mortgage backed investment is paid off early. If interest rates go up, the investor still gets the same amount from a mortgage backed investment (if backed by fixed rate loans). Assumable mortgages are also a thing of the past, so with the mobility of the US populations most mortgages probably exist less than 10 years, with the home owner moving or refinancing within that time.
With the changes in the market, the problem of long term loans financed by short term deposits no longer exists.
However, the new mortgage market has created its own distortions which reveal a new problem in the banking system. Today mortgages are originated by banks or mortgage brokers. These are then sold into the investment market after which the originating bank or broker has no part in rest of the life of the mortgage loan. Thus, mortgage originators are most concerned with getting a loan approved so they can receive their commission, a lump sum when the loan is sold.
This shows the source of the current sub-prime mortgage problem. Lenders have been becoming more and more lax over time. In the case of mortgages, there is intense competition to get a loan. I personally would receive several letters each WEEK offering to refinance my mortgage (I still average about 1 a day for a new credit card). Those who did not qualify for a fixed rate loan could get an adjustable loan at a lower rate. In addition, loan standards are lower. Traditional mortgage loans were for 80% of the home's value. FHA would allow up to 95% or 97% (with mortgage insurance). Today lenders offer up to 125% of a home's value, especially in shorter term home equity loans.
These new markets worked very well so long as home prices were rising and interest rates remained low. However, interest rates are rising. Because rates are rising, home prices are stalling (since part of the rise in home prices the last 15 years has been because a given mortgage payment could pay for more home as rates fell). With stalling prices and rising rates on adjustable mortgages, people who could barely afford their home are in trouble.
We now have a situation with rising default rates. This has severalcauses. One is people not realizing that their mortgage payment would rise and not being able to afford the rising rate.
Another cause is liberal lending practices by lenders who a more concerned with the immediate return of originating a loan than the long term prospects of repayment. A final cause is investors in mortgage backed securities not realizing how risky their investments are.
Tying this rather rambling discussion together, the S&L crisis of the 1980s was caused because S&Ls (by government regulation) had to make and hold onto long term loans based on short term deposits. This could not stand up to a rise in interest rates. Today's secondary mortgage market avoids the S&L type crisis but creates its own crisis -- liberal lending practices resulting in excessive foreclosures. In each case the "rules of the game" have created the environment. In the past, regulated rates that could not respond to high inflation. Today a system which allows excessively liberal lending along with a belief by many homeowners that housing prices would continue to rise indefinitely.
Unfortunately, the banking industry has adopted excessively liberal lending practices as a norm. Banks come close to forcing credit cards and credit card debt on consumers. The constant offers and credit line increases has been a minor problem for years and will become worse as time goes on, especially if interest rates continue to rise.
Wednesday, May 9, 2007
Obama and fuel economy
Barack Obama is criticizing U.S. auto makers for poor fuel economy, and claiming that Japan and China average much higher (about 45mpg rather than the US 29mpg). While this speech makes good politics, and Senator Obama will get praise for giving it in Detroit, it ignores a few unpleasant facts.
Yes, fuel economy is higher in some other countries. That's because the cars are all much smaller than in the U.S. When we look at cars sold in the U.S. by domestic and foreign auto makers, all manufacturers average about 27-33mpg according to the NHTSA web site (http://www.nhtsa.dot.gov/cars/rules/cafe/FuelEconUpdates/2003/index.htm
). The overall average is 29mpg, with the domestic makers around the average. The fact is that there isn't very much variation in the fleet economy (not counting companies like Ferrari at 14mpg).
Japanese cars may average 45mpg in Japan, but the Japanese don't sell those cars in the U.S. Instead, they sell the large cars that US consumers will buy. I was talking to somebody a couple days ago who was driving his "economy" car, a Lexus (Japanese make) which got 30mpg highway (less city) as opposed to his Lexus SUV that averages about 15mpg.
There is nothing stopping Japanese makers from selling small high mileage cars in the U.S. But a simple look at the Honda Civic shows the trend. From 1973 until today, the Civic grew from 140 inches long to 177 inches long. Curb weight went from 1500lbs to about 2900lbs. Fuel economy has dropped, the original getting 40mpg highway, the current one 30mpg. I can't find 1973 overall fuel economy for the Civic, but today's model is in the mid 20's.
Certainly the hybrid Civic, like the Prius, provides much higher mileage. And Detroit has perhaps made a mistake in emphasizing ethanol fuel instead of hybrids, but we're still left with the question of fuel economy in the United Stetes. Small cars don't sell.
Yes, fuel economy is higher in some other countries. That's because the cars are all much smaller than in the U.S. When we look at cars sold in the U.S. by domestic and foreign auto makers, all manufacturers average about 27-33mpg according to the NHTSA web site (http://www.nhtsa.dot.gov/cars/rules/cafe/FuelEconUpdates/2003/index.htm
). The overall average is 29mpg, with the domestic makers around the average. The fact is that there isn't very much variation in the fleet economy (not counting companies like Ferrari at 14mpg).
Japanese cars may average 45mpg in Japan, but the Japanese don't sell those cars in the U.S. Instead, they sell the large cars that US consumers will buy. I was talking to somebody a couple days ago who was driving his "economy" car, a Lexus (Japanese make) which got 30mpg highway (less city) as opposed to his Lexus SUV that averages about 15mpg.
There is nothing stopping Japanese makers from selling small high mileage cars in the U.S. But a simple look at the Honda Civic shows the trend. From 1973 until today, the Civic grew from 140 inches long to 177 inches long. Curb weight went from 1500lbs to about 2900lbs. Fuel economy has dropped, the original getting 40mpg highway, the current one 30mpg. I can't find 1973 overall fuel economy for the Civic, but today's model is in the mid 20's.
Certainly the hybrid Civic, like the Prius, provides much higher mileage. And Detroit has perhaps made a mistake in emphasizing ethanol fuel instead of hybrids, but we're still left with the question of fuel economy in the United Stetes. Small cars don't sell.
Airport security
Looking at airport security, it appears that if there is another major incident, we'll be back to the same complaints as after 9/11. After 9/11 there were complaints about poorly paid, poorly educated contract workers doing the security checks. Passing through an airport checkpoint yesterday, the ID check was not being done by a TSA officer, instead an employee of a private firm was checking security. And looking at the TSA employees, I'm not sure how much better the workers are.
The irony is that according to the 9/11 commission report, several 9/11 hijackers were flagged by airport security. However, the only response at the time was to search their luggage. The system wasn't setup to stop suicide attacks. If it were, the much maligned security company employees would have at minimum reduced the number of hijackers on the planes.
However, given the higher awareness of commercial aircraft security, the next attack will most likely come from some other direction.
The irony is that according to the 9/11 commission report, several 9/11 hijackers were flagged by airport security. However, the only response at the time was to search their luggage. The system wasn't setup to stop suicide attacks. If it were, the much maligned security company employees would have at minimum reduced the number of hijackers on the planes.
However, given the higher awareness of commercial aircraft security, the next attack will most likely come from some other direction.
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