Sunday, September 28, 2008

Fiscal conservatism died a long time ago

Add "bank bailout" to the long list of things the Federal Government can't afford, but supposedly can't afford NOT to do either.

Add this on top of hurricane relief, veteran's benefits, military and security needs and interest on the debt. The list goes on and on.

Government is essential, I guess.

Hope there's still money for affordable housing, medical care, rebuilding America's infrastructure, dealing with climate change, clean energy, Social Security for post war baby boom generation and beyond plus other unforeseen crisis's the future will toss our way.

Private enterprise can do a lot of these things, but it seems like the private sector's track record isn't as good as it should be. Government is where people turn for solutions regardless of whether it's Republicans or Democrats in control.

Bush is often accused of "spending like a drunken sailor," but does he have any other choice?

Hope they don't cut something I might need in the future, like affordable housing or health care.

At the Federal level, they do have the printing presses for creating money. Our Federal Reserve can print up money, I guess. This leads to inflation, but inflation may be the least painful outcome. Budget slashing can be scary.

Of course the right wing does not have a monopoly on budget cutting ideas. The left can propose budget cuts also.

How about an end to enforcement of drug laws? Save money on incarceration and enforcement.

I'm not necessarily advocating these "radical" solutions, myself, though they might be good ideas. This is just for the discussion.

Political left has some budget cutting proposals that would make other folks nervous, for sure.

Slash the military, pull out of Iraq right away, layoff border guards, dismantle homeland security, end the war on drugs. These are examples of potentially scary budget cutting thoughts on the left. Also most libertarians, on the right or left, will think this way.

State Governments

At the state level, here in Washington State, budget making has a somewhat different dynamic. The state must balance it's budget, I guess because it doesn't own money printing presses; unlike the Feds. Our state constitution requires a balanced budget.

Luckier than most states, we still have a fiscal surplus, here in Washington State, but that enviable situation is ending quickly. If all continues statuesque, there is a projected 3 billion dollar deficit for Washington State government in the near future.

Budget balancing strategies are entering our governor's race.

Republican Dino Rossi is running for governor. Rossi has an ad out on the radio saying he will go through the budget line by line and find the fat. Then he promises not to touch education funding. Well, education is nearly 60% of state budget. I'm sure there is as much fat in education as there is in other parts of state budget.

You can't really cut a budget very effectively by taking most of the budget off the table.

Both with state and federal governments, people want and need the spending.

I guess it's hard to find stuff that isn't "high priority" for large segments of the population. Your retirement and money in the bank, for instance.

Tuesday, September 23, 2008

Two factors that led to the housing bubble now bursting

Factor 1. Low interest rates, irresponsible lending practices that made it look like more money was available for home purchasing than the regular economy of jobs, products and services could support.

Factor 2. Basic population growth versus supply of land. Growth versus protecting the environment. Supply and demand of build able lots is an aspect of this issue.

Both factors caused home values and prices to go beyond what our economy can sustain.

When people have to use more than 1/3rd of their income just to pay the rent, or mortgage, watch out. We've got economic problems.

Factor 1, the banking issue is a morass. Many are writing about it so my thoughts are just more for the pile. Here's my two bits.

If the bailout happens, I think the Federal Reserve will eventually be forced into printing lots of money to avoid default on the Federal debt. This will likely lead to strong inflation in which the economy of wages, goods and services will inflate and eventually catch up with high housing costs. Eventually a balance of sorts might be restored to the economy. Yes, inflation could bring us back into balance. Higher wages for workers, but also higher prices for lots of things outside the housing sector.

One of the problems of the past few years has been inflation in certain sectors of the economy, such as health care and housing, which have outpaced wages and other sectors of the economy. Remember, there are some sectors of the economy where prices have even been dropping. Think digital cameras.

Now think journalism. Professions such as journalism are now being largely turned over to things like "crowd sourcing."

Think "outsourcing" also.

As for factor 2, demand and supply of build able lots versus population growth, there are many solutions here which I have written about in past blog entries.

Reducing Population growth for instance. Also we need to increase the density of zoning, allowing more mixed income neighborhoods and other things to improve planning. We need to better accommodate the population that's here now and the projected population growth that's already in the pipeline.

Basically, we need planning and lifestyles for a more sustainable society.

Monday, September 22, 2008

I just got back from the future

Something like the future we could have if we had the political will. Vancouver public transit Skytrain gliding over the traffic of surface streets. Kind of reminds me of 1960s images from "city of the future" with monorails snaking past mushroom shaped buildings.

I'm now back from my bicycle tour around to interesting things in this greater Northwest Washington, lower BC region. Parked my bike in a motel and took the Skytrain a few times.

I've thought of getting a shirt to wear when I'm bicycling that says, "my other vehicle is the Skytrain." Then folks might think I'm Canadian. I just live close to our peaceful border. Really, here in USA, we could do it also.

If you really want a great video showing how it works with some behind the scenes stuff, check out This great video I just discovered from MetroVancouver.

I also rode some regular buses and saw GPS at work. A sign at the front of the bus tells what street the bus is crossing and which stop is coming next. This info can likely be sent to cellphones so folks waiting at bus stops can learn where the bus they are waiting for is.

Global positioning technology. Amazing.

Gruesome economic cartoon idea

As the elderly post war baby boomer is hobbling off to the nursing home, Chinese debt masters close nursing home demanding repayment of national debt.

Sort of like future USA crippled and old will not be in any position to pay back all this debt. Young folks might rebel and just refuse to.

During the Reagan years, people said the debt was so bad then that kids would be saddled with huge debt. Now those kids are adults and they aren't having to pay off the debt. Maybe it can just keep being pushed into the future till it melts away in some kind of magical paradigm shift.

Friday, September 19, 2008

Hoard your health instead of food. Before we starve medical care may run out first

Quite a few people are saying, "hoard food now, the financial meltdown is coming."

Well, I don't think it's quite that dire. Food is still pretty affordable and available for most people here in USA. Hoarding one's health, if you've still got it, is more to the point.

Health care is really expensive. Will we be able to pay for health care in the future? Will we be able to pay, especially with these mounting federal deficits?

The prospect for ever paying down the debt gets lower as we head into the future and postwar baby boom generation ages. Governments will just have to keep spending more and more for health care, social security and so forth. Wonder if it can be done?

Hang onto your health, you may need it. Ride your bike. It's likely to be more imperative than hoarding cans of food.

If your health is already gone, I hope for the best. Maybe they'll (or we'll) figure a way out of this "over consuming, financial instability, global warming, economic obesity" morass eventually.

What happens when the whole economy does debt consolidation?

These bad private debts are now being consolidated into one place; the federal debt. It's like paying off a bunch of credit cards with one super loan from some credit card counseling agency. Debt consolidation.

When the federal government bails out all these banks, insurance companies, bad home loans and so forth, people say the taxpayers are picking up the tab. Actually the tab is being added to the federal deficit, rather than being picked up by taxpayers. Unless taxes increase, or increased economic activity leads to growing revenue collection, new spending and risk just gets added to the federal debt. Taxpayers are not likely to see it in next year's taxes, for instance.

What happens when this is all added to the debt? Will that debt ever need to be paid back?

Good questions.

Except for some brief periods when there was a slight federal surplus, we never even start paying off that debt.

We had federal budget surpluses one year under the Johnson administration during the 1960s, if I remember correctly, and a few years under the Clinton administration.

Both Johnson and Clinton were Democrats in the White house.

Most years, including some years that Democrats and all years that Republicans were in the White House, during my lifetime, the debt keeps piling higher.

When Clinton ran a surplus and paid down a tiny fraction of the accumulated debt, I thought, "this is a rare and fragile situation." It didn't last long.

Now, consolidating so much of this private debt under the "one roof" of federal debt is uncharted territory. The deficit is likely to balloon even faster.

What happens when people realize that it may never be paid back?

Who knows.

Now might be a good time to try and not think about money and material wealth too much. There are other aspects to life than our culture's obsession with material wealth.

About now, right before it looks like we're falling over the precipice, Garrison Keillor from A Prairie Home Companion might transition us to "it's time for some Beebop Areebop A Rhubarb Pie." Or maybe it's catsup. Yes, catsup comes to the rescue with it's mellowing agents.

Thursday, September 18, 2008

One thing politicians are not likely to say about the housing bubble

We've heard a lot about irresponsible bankers making fortunes running their companies into the ground.

It's true, but there's also a lot of ordinary people who have made out well from rising real estate prices in recent years. School teachers, police officers, factory workers. If you bought your house when the buying was good and sold after hefty appreciation, you made out like bandits.

Politicians wouldn't implicate ordinary folks since they want their votes and there are a lot more ordinary folks than Wall Street brokers.

Selling a house at the right time has met a lot of early retirements, trips abroad, SUVs, furnishings, fine wines and meals, you name it. Life has been pretty lucrative for a large chunk of middle income Americans.

I don't have the figures, but I wouldn't be surprised if it was a good 25 percent of the population living high on the hog. On my bike tours, I notice the big homes, the nice yards, the businesses that cater to luxuries from salons for your pouch to fine coffees.

Even seemingly ordinary people need to consider how sustainable the lifestyles that folks take for granted are.

While many on the good side of the real estate boom have done well, sold at the right time, retired early and so forth. Others have not done so well.

As the escalator of living went up for many, another huge chunk of our general population found things increasingly difficult. Trying to find a job that paid enough to get into that first home, having health insurance, making ends meet. Possibly this group of have-nots is another 25 percent of the population.

Now it looks like enough people are at the bottom, having trouble getting onto the escalator that the whole thing is jamming up. Some banks tried to make it look easier for these marginal people with no money down offers and so forth. These banks are now finding a lot of folks defaulting.

I still hear radio ads for mortgage stuff. Often the ads start with the phrase "homeowners." Being a renter, I tune out. Figure it doesn't apply to me.

Then there's those "lucky" homeowners who took too much cash out of their perceived fortunes. Home equity loans for joys, but also the things life throws at you. Medical expenses and our nation's lack of a good safety net. Divorce comes up, just when you think you've had it made and the house is paid off. Life has it's twists and turns.

More folks get stuck at the bottom of the escalator and eventually the whole thing grinds to a halt.

Tuesday, September 16, 2008

Summer 2008 only comes once

Taking Blackball Ferry from Port Angeles, WA. to Victoria, BC.

Decided to head back toward central city of Vancouver for one more sightseeing day.

Picture taken at downtown public library.

My ride in from Abbotsford was good along shoulder of Fraser Highway. Better than going east on north side of Fraser River where there was construction and so forth. North side gets better farther east past Mission, as I remember from an earlier trip.

South side of river is OK as much of the traffic "rat race" can use Trans Canada Highway rather than Fraser Highway.

More highway choices on south side of river.

I was thinking of coming back to Bellingham a day early, but missed my turn south to the border at Aldergrove. Also thought one more day in Canada would be fun. Motel in Surrey and Skytrain back to downtown Vancouver.

I had another dream that encouraged me to continue my trip. Dream was about stopping into my place of work and discovering I was needed back at work earlier than expected. Our vacation fill-in help must have miss read the calendar in my dream. They left earlier than planned.

While my boss was trying to explain this to me, several other people were talking to him all at once. He was also trying to serve whole wheat bread from a vendor's cart in the lobby. Doing this while running all over the building troubleshooting maintenance things. People were lining up at the cart waiting for their bread while he was needed upstairs to fix pluming problems. His skin looked mighty wrinkled.

I'm glad that was just a dream and when I do go back to work, it shouldn't be that hectic; hopefully.

Photos from 2008 trips.

Is the ownership society sustainable?

As more financial institutions falter, here is a factor to keep in mind.

I keep hearing that the median wage is not enough to qualify for a mortgage to buy the median priced house. That's true in so many regions.

When people can't afford home ownership and at the same time home ownership is being held up as a holy grail of life, "ownership society," there is a disconnect.

In trying to afford homes via fancy financing from unregulated banks, rather than wages and house values in better balance, we get the default situation being faced today.

We need less emphasis on home ownership as the holy grail of living, or we will need to inflate the rest of the economy to catch everything from wages to candy bars up with home values.

$10 candy bars?

Either people stretch too far and buy, or have to give up that dream.

What we need is a more sustainable dream than buying over our means.

Less expensive housing, like mobile home courts for instance, Smaller houses and more apartment living may be in the future.

Is it a sacrifice, or maybe just making things more convenient? Maybe it's better.

My bike touring version of "American Dream" is now visiting Canada. Might not be that sustainable either. Exploring around Vancouver has meant some motel stays for me. More expensive than camping.

Now I am out east of Vancouver in the sprawl around Abbotsford. Yes, Canada has sprawl too, but maybe not as much as Washington State.

Single family homes all spread out. Narrow rural roads crammed with traffic. I'm confined to bigger highways that have shoulder, but "gritty" along side all those noisy dusty trucks. Not a lot to see except mountains and farms in the distance.

Time to head back. The camping is still too far out and the riding is a bit boring. Heading back into beautiful central city Vancouver would be better scenery, but more motel stays. I have to think about what's sustainable for my bank account also.

The city is pretty, but more of the outskirts need to be like the city. The city is rare, making it more expensive. People pay a high price for convenience, yet most of the sprawl around large cities doesn't build for convenience. Convenience needs to be more common and affordable. They should build the outlying areas with more density and smaller homes. A more sustainable version of of both the American and Canadian dreams.

Out here in the sprawl, it's still too urban for camping, but still too rural for convenience. Motels near attractions like Midas Muffler shop. Wow. The worst of both city and country?

Wednesday, September 10, 2008

Back from the beach

Where others have come back from the beach and gutted fish, I've used Internet WIFI and dreamed about the Hadron Collider. More and more resorts are getting WIFI now.

This Asus PC has worked well and has been small enough for my bike pannier.

I'm using Linux.

Click on image to enlarge and see Google front page celebration of Hadron. Also see signs about proper etiquette for cleaning fish in the campground.

This bicycle trip has taken me to Pacific Ocean at Rialto Beach. Today is the much looked forward to start up Hadron collider in Europe. Exploring deeper into the nature of matter and the universe.

In 1999, I was passing through Wenatchee, WA. when the Chandra X-Ray satellite was launched.

2003 saw Spitzer Infrared Observatory launch while I was biking through Marin County, CA.


Last night, around the time of Hadron start up, I dreamed the collider was, for some reason, in Hope, BC. Now there is a big collider at UBC Campus in Vancouver, BC, but the Hadron isn't in the mountains around Hope. It's in Europe under parts of France and Switzerland.

In the dream, I met up with a bunch of other cyclists on the road. I kept talking about the Hadron so the cyclists I just met said, "we're close, let's all go there."

We went down the road and turned off to Hadron, near Hope, BC.

Remember, this is a dream.

Entering a building, there was a big reception lobby filled with tourists. Someone came out from a back office and started explaining things. Then he began berating us for ruining his busy day. He said he felt obligated to show us around.

We wondered what that was about as lobby was full of tourists who just dropped by. Remember, this is only a dream.

So we went outside and the nice day turned to a heavy rain. So heavy that we could see cars hydroplaning on the road and throwing up muddy water on the shoulder. Our stuff was drenched so we had to take refuge inside the lobby again to wait out the rain squall.

About then I woke up. Glad it was just a somewhat unpleasant dream.

Weather has been great on this trip. Sunny except for some overcast on the beach.

I am excitedly awaiting news of new discoveries at Hadron over the next years and no it's not in Hope, BC. where my dream took place. I'm not there either. Nothing wrong with Hope. I do plan to go back to Bellingham via Victoria and Vancouver, BC.

In 1989, I biked to Vancouver and went to an open house at the TRIUMF Particle Physics Lab. It was very interesting and the people were great. Not like my dream.

Monday, September 08, 2008

Along Olympic Discovery Trail

Old railroad bridges around Sequim, WA. Having a great time riding out toward Crescent Lake and possibly the Pacific. Then headed back to Bellingham later in the week via Victoria, BC and the Blackball Ferry from Port Angeles. Great sunny weather so far. Nice bicycling on these trails and roads.

Wednesday, September 03, 2008

Electric Transit

Windmill painted on side of Max Train as I passed by in another Max Train.

One of the goals of this summers travels was riding Portland's Max Train. Staying in a motel room in Portland, OR. I just took the Max out to Beaverton and back.

A driver ask, "where's your umbrella?" Portland was experiencing a shower. I said, "The train is my umbrella."

Sitting a short while in Beaverton waiting to pick up a new load of passengers. I just stayed on the train and headed back downtown.

The means of transit was the destination.

Stay tuned for more about this summer's travels via bicycle, train and so forth.