Can the market alone fix the economy?

[rcgldr]

Isn't that the point of a free economy, the non-competive business are free to fail?

Do you mean companies with labor agreements that are so expensive they need a bailout to fund operations for the next 3 months?

A lot of republicans in congress feel that way. Considering that the labor related costs represent 7% to 8% of the price of USA cars, I doubt that extra 2% or so on the price of USA cars versus "foreign" cars explains why the USA car companies got into so much trouble. Ford seems to be doing ok compared to the other 2, mostly because they targeted a wider market segment than GM and Chrysler. If you want to blame someone, blame the oil companies for raising gas prices a great amount in a short period of time; which they did back in the 1970's with a similar effect on the USA auto makers. ... or blame who ever thought it was a good idea to let corporate America police themselves and deregulate, such as legalizing gambling in the stock market via derivatives and letting the money lender brokers decide the parameters required to qualify for home loans.

 

[WhoWee]

I am responding to your comment that non-competitive businesses should be allowed to fail...and I agree.

Anyone that agrees to compensate production employees at $70 per hour is not being competitive. If you want employees to share in the profits...pay minimum wage to start, cap at $12 per hour and ISSUE THEM STOCK.

http://www.heritage.org/research/economy/wm2162.cfm

http://www.knowyourpension.org/pensions/UAWpensions/UAW_pension_updates.aspx

http://briansullivan.blogs.foxbusiness.com/2008/12/21/uaw-pensions-retirement-the-black-swan-reveals-the-sacred-cow/

http://www.uaw.org/barg/07fact/fact02.php

http://www.uaw.org/barg/03/barg05.cfm

http://www.uaw.org/about/itpays/pays05.html

When a company backs itself into a corner the way GM has...it can only mean that they were hoping for some big and special event to happen in the future (maybe a bailout?) to solve their problems...or maybe they were watching government and decided to just keep rolling the big debt ball forward. It really doesn't matter WHY they've shot themselves in the foot.

If a small business selects a location because it is the very best location...everyone says OHHH location, location, location...what a smart operator...but if the small business is under-capitalized (can't pay the rent or mortgage) or sells an unwanted or unacceptable product, or pays the manager and employees too much...the business fails and everyone says...too bad...next?

I think the UAW membership (including retirees) along with the dealers and suppliers and parts companies and trucking companies and everyone else with a vested interest should BUY INTO GM, acquire Chrysler...hire new management and restructure their own agreements...don't expect Barney Franks, Chris Dodd, Nancy Pelosi, Harry Reid or even President Obama to solve your problems.

 

[rcgldr]

Anyone that agrees to compensate production employees at $70 per hour is not being competitive. If you want employees to share in the profits...pay minimum wage to start, cap at $12 per hour and ISSUE THEM STOCK.

Why not pay the CEO's in the same manner then? Is a CEO really worth more to a company than 100 or more employees that actually do the labor? I would assume the $70 per hour would attract the best possible workers. Also again note that labor related costs represent 7% to 8% of the price of a USA made car.

 

[WhoWee]

Somehow I don't think the the CEO would be guaranteed $millions if the vested parties owned the company...I agree that executive pay should be tied to profitability (and I don't mean smoke and mirrors profitability).

Only government and health care live in the world where cost doesn't matter.

 

[mheslep]

Why not pay the CEO's in the same manner then? Is a CEO really worth more to a company than 100 or more employees that actually do the labor? I would assume the $70 per hour would attract the best possible workers. Also again note that labor related costs represent 7% to 8% of the price of a USA made car.

Given the recent highly visible evidence that the decisions of a single executive can create or destroy billions of dollars, create or destroy thousands and thousands of jobs, then such a person that can correctly analyze a complex business and its market, and then lead an organization is worth more than any 100 other line employees, at least at moments.

 

[rcgldr]

Given the recent highly visible evidence that the decisions of a single executive can create or destroy billions of dollars, create or destroy thousands and thousands of jobs, then such a person that can correctly analyze a complex business and its market, and then lead an organization is worth more than any 100 other line employees, at least at moments.

Except those people seem to be the exception when it comes to the quality of CEO's. The track record for startups in the USA is about 1 in 10 succeeds, and a significant part of the sucesses are dumb luck in cases of having the right product at the right time. I've seen a significant number of high level managers move from job to job, and their success or failure has little to do with the decisions they've made. Most of the time, they've simply inherited a situation, and/or it's a few key employees or staff that have more impact on how a company does.

update - The other issue with CEO's is that there's little personal risk. They get paid the same regardless if their decisions are good or bad, and sometimes get rewarded with huge severances if their bad decisions result in them getting fired. One issue with corporations is that the interests of the individuals often conflict with the interests of the company itself, its stock holders, its employees, or its customers.

Getting back to the earlier point, wouldn't the big 3 be attracting better line workers because of the better pay and benefits, noting that it has a small overall affect to the price of the cars they sell? If relatively high pay is good for the CEO's, then why not the line workers?

 

[WhoWee]

I've always thought we should make some changes to the terms and pay of our elected officials.

First, limit House terms to 10 or 12 years total...then they would be eligible for the Senate...where they could stay as long as re-elected. If the President only had 1 term...say 6 to 8 years...he/she wouldn't need any time off to campaign for re-election and might be less distracted.

Then, because we're hiring the best possible candidates, pay the President about $150 Million for their term (then they wouldn't need to do "side work" when they leave office), Senators $5 to 10Million per year and House Reps at least $1Million per year. They would of course need to be docked the appropriate amount of pay for the days they didn't show up to (work) vote.

I think 2 things would happen as a result...1.) people MIGHT take elections more seriously, and 2.) we MIGHT hold the politicians more accountable.

 

[WhoWee]

As for CEO's and other "HIRED" managers...they don't share the risk.

When was the last time a CEO bought his way into a company...invested his own money to buy the company or lead a group of investors?

I'm not suggesting we need Robber Barrons or anything, but look at our most successful people...Bill Gates and Warren Buffet for instance. I doubt they could have relied on other people to outperform their accomplishments.

 

[mheslep]

Except those people seem to be the exception when it comes to the quality of CEO's. The track record for startups in the USA is about 1 in 10 succeeds, and a significant part of the sucesses are dumb luck in cases of having the right product at the right time. I've seen a significant number of high level managers move from job to job, and their success or failure has little to do with the decisions they've made. Most of the time, they've simply inherited a situation, and/or it's a few key employees or staff that have more impact on how a company does.

Well we are bouncing around a bit here. We were discussing highly paid CEOs, who make something like 100x more than a line employee? That rules out the vast majority of startups, and rather makes the point, that part of the reason for success in business is professional management. In most cases, the founders of a startup that lives long enough and grow enough to warrant more investors in most cases face demands that the founders step aside for professional management to take the reins.

update - The other issue with CEO's is that there's little personal risk. They get paid the same regardless if their decisions are good or bad, and sometimes get rewarded with huge severances if their bad decisions result in them getting fired.

As a matter of degree that might be arguable, but as an absolute statement that is certainly not true, as many CEOs have stock in a company or performance related bonuses, which in the case they tank the company they lose money too. Also, I am not aware that many high level CEOs of failed companies enjoy great job prospects. And though they won't starve or even sell the yacht, I think most often it is off to the consulting circuit for that crowd. As a general statement, I'd agree that more CEOs should be forced to take more of an equity stake in their firms. (Edit: but forced by their boards, not the government) For instance, I believe the Detroit CEO's have stated they are 'all in' on company stock now?

One issue with corporations is that the interests of the individuals often conflict with the interests of the company itself, its stock holders, its employees, or its customers.

? What individuals?

Getting back to the earlier point, wouldn't the big 3 be attracting better line workers because of the better pay and benefits, noting that it has a small overall affect to the price of the cars they sell? If relatively high pay is good for the CEO's, then why not the line workers?

Well it might, but clearly the problem is not that Detroit needs better line workers, AFAIK they're no better or worse than the line people working in Tennessee Toyota plants. What Detroit needs is better management.

 

[Proton Soup]

i get the impression that to get your payscale up as a CEO, the goal is not to be more profitable. the goal is to make the company bigger. so you merge and acquire. and every time you knock out another CEO, your pay jumps a few million.

 

[WhoWee]

The key for the CEO is the share price. Most acquisition attempts are structured with an exchange of stock. Growth, whether through market share (sales) increases or acquisitions, along with (often times projected future) profitability help determine share price.

It's all relative.

 

[Skyhunter]

The era of unfettered capitalism is over. It is obvious now that the corporate world can not police themselves. We are now seeing the true social cost of what happens when you let capitalism run wild with no restrictions.

That is what Alan Greenspan admitted to Congress October 23, 2008. He was no longer the Federal Reserve Chairman at the time.

In the words of Henry David Thoreau; "I ask for, not at once no government, but at once a better government"

This latest disaster of unregulated capitalism will likely be a death blow.

People are looking for and expecting big changes. Mitch McConnell was sounding almost bi-partisan yesterday. Even though he claimed the Republican Senate represents 50% of America, he knows better and is worried about that number shrinking in 2010. I think Obama will get bi-partisan support. He won 53% of the vote and has a very good approval rate. It is even difficult for Sean Hannity to spin that into "not a mandate".

Immediately what needs to happen is to keep people in their homes to stabilize housing prices. Put some teeth in the oversight board and get tough with the banks. Use the other $350 of the $700 billion to find a 3-way solution to as many of these foreclosures and distressed mortgages as you can. $700 billion is enough money to give 15 million homeowners, which is ~4 times the foreclosure rate, about $50,000 each. Not suggesting we do that just making the point that solving the mortgage problem from the bottom would be at least as effective a solution as giving it to bankers has been. A three way solution includes interest rate and principal reduction.

Put people to work immediately by fixing existing roads and bridges, not by building new ones unless it is replacement infrastructure.

For the longer term a strategy of rebuilding our cities for efficiency by increasing public transit and dedicated bicycle thruways. Install a new smart underground electric grid in the cities and encourage renewable home energy as well as other local generation sources nearby. Increase density and neighborhood planning so that services are blocks away not miles away. And make the streets safe by lowering the speed limits to 15mph in most neighborhoods. And most importantly, plant living roofs. Cover our rooftops with plants. It is fantastic insulation and membrane protection. I helped work on an assessment of a neighborhood's rooftops. The study concluded that 1/3 to 1/2 of the neighborhoods food could be grown on the roofs of existing buildings, although with some major retrofitting due to the seismic codes. Producing food locally reduces transportation costs. Reducing transportation costs is key to sustainability. And in the short term is essential.

Someday when Tesla's dream of free power from the air to power our personal transporters then transportation will not be such an issue. Until then I would like to encourage people not to drag around an 8000lb SUV everywhere they go.

With solar panels just now reaching $1.00 a watt retail, a big investment in manufacturing facilities to produce these panels will pay off in the long run. http://www.nanosolar.com/" is producing 1 gigawatt a year of solar panels. If we built 1000 of these factories it would still take 1000 years to meet the worlds energy demand. So there is plenty of opportunity for mining companies to shift from oil and coal to finding and extracting the raw materials these factories will need.

Aggressive recycling. Everything has value. This concept has been lost to a generation. Those old enough to remember the "Great Depression" have not forgotten. Instead of demolishing we deconstruct, recycle, or abate. Less and biodegradable packaging. Bring your own bag and cup etc. Zero waste is the goal and it is possible.

The scope and scale of rebuilding the worlds infrastructure to be sustainable will provide a better economic stimulus than a world war ever could. We can rebuild the cities without blowing them up first.

 

[rcgldr]

Except those people seem to be the exception when it comes to the quality of CEO's. The track record for startups in the USA is about 1 in 10 succeeds, and a significant part of the sucesses are dumb luck in cases of having the right product at the right time. I've seen a significant number of high level managers move from job to job, and their success or failure has little to do with the decisions they've made. Most of the time, they've simply inherited a situation, and/or it's a few key employees or staff that have more impact on how a company does.

Well we are bouncing around a bit here. We were discussing highly paid CEOs, who make something like 100x more than a line employee? That rules out the vast majority of startups, and rather makes the point, that part of the reason for success in business is professional management. In most cases, the founders of a startup that lives long enough and grow enough to warrant more investors in most cases face demands that the founders step aside for professional management to take the reins.

Professional managers for day to day activities, such as accounting, genereally do good jobs. The track records of CEO's in many cases seem be inconsistent, but perhaps I have a squewed view being in a tech industry (firmware programmer, mostly computer peripherals), where success or failure seems to be independent of the decisions made by the CEO's. Quite often, a fey key employees are responsible for the success or failure of a company.

The other issue with CEO's is that there's little personal risk. They get paid the same regardless if their decisions are good or bad, and sometimes get rewarded with huge severances if their bad decisions result in them getting fired.

As a matter of degree that might be arguable, but as an absolute statement that is certainly not true, as many CEOs have stock in a company or performance related bonuses, which in the case they tank the company they lose money too. Also, I'm not aware that many high level CEOs of failed companies enjoy great job prospects. And though they won't starve or even sell the yacht, I think most often it is off to the consulting circuit for that crowd. As a general statement, I'd agree that more CEOs should be forced to take more of an equity stake in their firms. For instance, I believe the Detroit CEO's have stated they are 'all in' on company stock now?

For the big 3, that's unsual. Most CEO's stand to make a lot of money regardless of how the stock does. If the stock does well, it's a big bonus, but when you're making an 8 figure salary, does it really matter? I haven't seen a lot of CEO's in action, but I've personally witnessed a high rate of turnover of of both good and bad upper management at many tech companies, their success or failure often based on circumstances they inherited or were beyond their control or simply wrongly perceived. Even the truly bad ones usually find jobs, and continue to work until their poor decision making ends up having a perceived negative impact on a company and then they move on.

One issue with corporations is that the interests of the individuals often conflict with the interests of the company itself, its stock holders, its employees, or its customers.

What individuals

At all levels. Call it hidden agendas. For example, individuals often have a stake in a particular product or process of a company and often defend that product, and attack competing products, even when it's clear that the continuing development of the current product or process as opposed to the new product or process is an overall detriment to the company, and only a benefit to the group involved with the particular product or process.

Another example are the lies and coverups that occur between layers of managment (common in many tech companies). New product or process programs are often "sold" to upper management with unrealistically short schedules and man power requirements, counting on the fact that once committed, the process will be allowed to continue. It seems that only a few upper management types are able to see through these lies, it's rare that upper managment will covertly interview the actual workers on a project to get a true picture of the "cost" of implementation of a product or process.

Another issue is that short term profits are often sought at the expense of long term profits in a coportation, because the incomes of individuals are more closely tied to the short term profits, even when these decisions represent a long term detriment to the company. There have been cases where personal gain came at the expense or the demise of a company.

Individual interests often conflict with corporate interests, but it's the individual interests influencing the decision making process.

Getting back to the earlier point, wouldn't the big 3 be attracting better line workers because of the better pay and benefits, noting that it has a small overall affect to the price of the cars they sell? If relatively high pay is good for the CEO's, then why not the line workers?

Well it might, but clearly the problem is not that Detroit needs better line workers, AFAIK they're no better or worse than the line people working in Tennessee Toyota plants. What Detroit needs is better management.

In fact, it would appear that the higher paid CEO's of the big 3 are doing a worse job than the lower paid CEO's of "foreign" coporations. Part of this has to do with consumer behavior beyond the control of the corporations (the general economy and gas price spiked changed consumer behavior). Sales of "foreign" autos in the USA are also way down, but those corporations aren't as dependent on the USA market. Somehow, Ford seems to be doing the best of the big 3. As a small example, the Mustang has been very successful compared to competing products.

 

[mheslep]

That is what Alan Greenspan admitted to Congress October 23, 2008. He was no longer the Federal Reserve Chairman at the time.

That is misinformation. I saw the testimony, and he said nothing even approximately describing the current situation as 'unfettered capitalism' or 'run wild with no restrictions'.

 

[mheslep]

...In fact, it would appear that the higher paid CEO's of the big 3 are doing a worse job than the lower paid CEO's of "foreign" coporations.

Agreed.

Part of this has to do with consumer behavior beyond the control of the corporations (the general economy and gas price spiked changed consumer behavior). Sales of "foreign" autos in the USA are also way down, but those corporations aren't as dependent on the USA market. ...

The US market is not the main issue; auto sales are down world wide. The problem is that, in the US, the domestic companies spend more to make comparable cars than their foreign owned domestic competitors. Also, the foreign owned seem to have a more flexible production process and have very nimbly turned to making, say, fewer SUVs and more small cars in a short time.

 

[mheslep]

...
With solar panels just now reaching $1.00 a watt retail, ...

Can you please provide a source? Just one?

 

[rcgldr]

The era of unfettered capitalism is over. It is obvious now that the corporate world can not police themselves. We are now seeing the true social cost of what happens when you let capitalism run wild with no restrictions.

That is what Alan Greenspan admitted to Congress October 23, 2008. He was no longer the Federal Reserve Chairman at the time.

That is misinformation. I saw the testimony, and he said nothing even approximately describing the current situation as 'unfettered capitalism' or 'run wild with no restrictions'.

I think this subject, but not that exact wording, was brought up in an interview with Greenspan on a show like 60 minutes. I also seem to recall it was the interviewer making a similar statement (about deregulation, specifically derivatives) and Greenspan simply agreeing.

Regardless of who made the statement, in hindsight, it's apparent that self policing of the corporate world doesn't work. I still wonder who thought that allowing derivatives, essentially legalized gambling without any true investment, was a good idea. It was clear to the legislature that created the derivative laws, since it specifically excluded states from being able to treat derivatives as an illegal gambling activity.

 

[WhoWee]

Skyhunter,

NanoSolar has made a breakthrough with their new technology. They have achieved 1 GW production at the test speeds of 100 ft/min. However, the equipment is rated at 2,000 ft/min and they claim the process works better at the higher rate...very exciting!

I borrowed this from their web site: Nanosolar Achieves 1GW CIGS Deposition Throughput
June 18, 2008
By Martin Roscheisen, CEO

As we are busy ramping our operation, we want to recognize achieving a major milestone in solar technology: The solar industry’s first 1 gigawatt (GW) production tool. Here it is:

[Also: Higher-resolution download of video (6.5MBytes)]

Most production tools in the solar industry tend to have a 10-30 megawatt (MW) annual production capacity. How is it possible to have a single tool with gigawatt throughput?

This feat is fundamentally enabled through the proprietary nanoparticle ink we have spent so many years developing. It allows us to deliver efficient solar cells (presently up to more than 14%) that are simply printed.

Printing is a simple, fast, and robust coating process that eliminates the need for expensive high-vacuum chambers and the kinds of high-vacuum based deposition techniques sometimes used in industries where there are a lot more $/sqm available for competitive manufacturing cost.

Our 1GW CIGS coater cost $1.65 million. At the 100 feet-per-minute speed shown in the video, that’s an astonishing two orders of magnitude more capital efficient than a high-vacuum process: a twenty times slower high-vacuum tool would have cost about ten times as much.

Plus if we cared to run it even faster, we could. (The same coating technique works in principle for speeds up to 2000 feet-per-minute too. In fact, it turns out the faster we run, the better the coating!)

 

[mheslep]

I think this subject, but not that exact wording, was brought up in an interview with Greenspan on a show like 60 minutes. I also seem to recall it was the interviewer making a similar statement (about deregulation, specifically derivatives) and Greenspan simply agreeing.

No. It is wrong to attribute the '...unfettered' statement to Greenspan, or to call it 'similar'. Argue that view yourself if you like but do not attribute it to people who said nothing of the kind. Greenspan has made statements that 'mistakes' were made, and that the current regulation framework was flawed. That in no way is the equivalent of saying capitalism has been running around 'unfettered' or 'unregulated'.
http://oversight.house.gov/documents/20081023100438.pdf

Regardless of who made the statement, in hindsight, it's apparent that self policing of the corporate world doesn't work. ...

There are http://www.heritage.org/research/regulation/bg2116.cfm#_ftn14" page of federal regulations, and that is just federal. How does this qualify as unfettered or self-policing?

 

[WhoWee]

Good news for Big 3?

http://news.yahoo.com/s/ap/20090105/ap_on_bi_ge/auto_sales

 

[mheslep]

Skyhunter,

NanoSolar has made a breakthrough with their new technology. They have achieved 1 GW production at the test speeds of 100 ft/min.

That's misleading. It is made on the throughput basis of the printer, if it could be run 24/7 for a year, and then that the film be attached continuously to mechanical supports and electric power cabling. They can do this in bursts; there's no evidence that they can do this continuously for a year.

 

[rcgldr]

I think this subject, but not that exact wording, was brought up in an interview with Greenspan on a show like 60 minutes. I also seem to recall it was the interviewer making a similar statement (about deregulation, specifically derivatives) and Greenspan simply agreeing.

No. It is wrong to attribute the '...unfettered' statement to Greenspan, or to call it 'similar'.

I was only trying to point out that it was the interviewer making a similar statement, not Greenspan. The only thing I do recall is what you mentioned, that Greenspan stated mistakes were made.

self policing of the corporate world doesn't work. ... derivatives

There are 72,000 pages of federal regulations, and that is just federal. How does this qualify as unfettered or self-policing?

It doesn't. I was pointing out that legalizing derivatives was an example of self-policing gone bad. So was the relaxation for home loan qualifications. In both cases, individuals personally benefitted from these activities without assuming any of the risks. This is why we have 72,00 pages of regulations, and it's still not enough.

 

[WhoWee]

That's misleading. It is made on the throughput basis of the printer, if it could be run 24/7 for a year, and then that the film be attached continuously to mechanical supports and electric power cabling. They can do this in bursts; there's no evidence that they can do this continuously for a year.

I see your point, but I'm not sure the manufacturing process is continuous. I thought they spooled the printed material and completed the process on another line(?)...really not sure. Otherwise, they're going to need quite a few lines to meet demand...good thing they have the funding in place.

Also, as you stated they can run in bursts and the printer is rated at a much higher speed...again, who knows what they can ACTUALLY achieve?

I just wanted to make a positive statement regarding advances that are being achieved.

 

[mheslep]

I was only trying to point out that it was the interviewer making a similar statement, not Greenspan. The only thing I do recall is what you mentioned, that Greenspan stated mistakes were made.

It doesn't. I was pointing out that legalizing derivatives was an example of self-policing gone bad.

Ok, I am closer to your view in this narrow case, though saying 'derivatives' is still too broad. As Greenspan said on Oct 23, derivatives in general are doing just fine - the majority of them are used in currency trading. The specific problem seems to be credit default swaps; they need some rules.

So was the relaxation for home loan qualifications. In both cases, individuals personally benefitted from these activities without assuming any of the risks. This is why we have 72,00 pages of regulations, and it's still not enough.

A common view, but I think a fools errand to simply add more pages, as the same thing will just happen again after doubling the regs (I submit) and exploding the costs. The question to ask here is how did some of these loan resellers assume they could get away with making a reckless loan and then resell it, again and again, as if they had a game of musical chairs where the music never stops? Normally self preservation and not regulations would prevent them, you, me or anyone else from doing so. In this case I assert that Fannie Mae and Freddie Mac, on behalf of the government, were acting as the both the last chair in the game and the never ending music player.

 

[rcgldr]

The US market is not the main issue; auto sales are down world wide. The problem is that, in the US, the domestic companies spend more to make comparable cars than their foreign owned domestic competitors.

I'm not so sure about this, GM has been able to make cheap cars under the Saturn name. As I mentioned before, labor related costs only account for about 8% of the price of a car. I don't know about the level of technology used in manufacturing, because the USA companies have a mix of older and newer plants.

The foreign owned seem to have a more flexible production process and have very nimbly turned to making, say, fewer SUVs and more small cars in a short time.

I'm not so sure about this. I'm going a bit off topic here with a sub-segment of the auto market.

The Japanese car makers floundered in the higher end sports car market. For example, the Toyota Supra and Nissan NSX stagnanted somewhat compared to the USA Corvette and the European cars like the "low end" Porsche 911's. The Supra eventually got overpriced, and the price dropped from about $55,000 to $46,000 in a single year, the largest percentage decrease in price for any car. In the meantime, GM kept evolving the Corvette, and by 1997 with the C5 version, it was cheaper, more powerful (345 hp versus 320 hp for the turbo Supra) and lighter (3250 lbs versus 3480 lbs for the turbo Supra) and had a better perceived image in the USA market. 1998 was the last year Supras were sold in the USA, and 2002 was the last year of production, because of issues meeting ever tightening emmisions requirements (I'm not sure why Toyota didn't try a newer technology engine in the Supra).

The NSX was stuck at 290hp apparently because of a Japanese gentlemans agreement not to exceed 300hp during its years. Few other improvments were made, while the rest of the car makers continued to improve their sports cars. The NSX was expensive, about $80,000, (USA), a price hard to justify for what was considered antiquated technology. Then again Harley Davidson manages to extract high prices on motorcycles based on antiquated technology with it's "mystique", an example of perceived value.

The new Nissan GTR is the first new sports car to come out of Japan in a long time. I'm not sure why sports car are so difficult for the Japanese automakers. Perhaps Japan's automakers feel that the sports car market is too volatile.

Getting back to your post, I'm not sure how long it takes USA or foreign companies to retool a line to make a different type of car, or what issues are involved in retooling.

Getting back on topic, in the current situation, it's a drastic reduction in overall sales because fear factor has dramatically changed the behavior of consumers world wide. I'm not sure if the mind set of current generations is ever going change back to what it was 2 years ago. I think that conservatism of consumers is going to be around for quite a while, with an associated impact on any consumer based economy. I don't know if there's any real fix for this.

 

[rcgldr]

derivatives.

Ok, I am closer to your view in this narrow case, though saying 'derivatives' is still too broad. As Greenspan said on Oct 23, derivatives in general are doing just fine - the majority of them are used in currency trading. The specific problem seems to be credit default swaps; they need some rules.

Maybe I'm not understanding how derivatives interact with currency exchanges, but what is the point in derivatives for currency trading? The exchange banks seem to be doing a good job with currency trading, so why allow people to place the equivalent of side bets on currrency instead of dealing directly or indirectly (via investment funds) with the exchange banks?

relaxing home loan regulations was bad

A common view, but I think a fools errand to simply add more pages, as the same thing will just happen again after doubling the regs (I submit) and exploding the costs. The question to ask here is how did some of these loan resellers assume they could get away with making a reckless loan and then resell it, again and again, as if they had a game of musical chairs where the music never stops? Normally self preservation and not regulations would prevent them, you, me or anyone else from doing so. In this case I assert that Fannie Mae and Freddie Mac, on behalf of the government, were acting as the both the last chair in the game and the never ending music player.

I think this gets back to my point about personal gain for individuals at the expense or risks of others. Consider the fact that the ideal behind corporations is to shield the founders from corporate debt. I don't know of a good way to fix this. It seems that policing of the economy will just continue to grow, to stop the corporate equivalent of looters in a disaster when the police are absent.

 

[Skyhunter]

Can you please provide a source? Just one?

I did provide the Nanosolar link.

Their production cost is about 30 cents a watt. and the panel is 14% efficient.

Nanosolar sold out the entire 2008 production before they even produced a single panel. This is the only company currently manufacturing panels for sale but http://www.sunrgi.com/index.html" also looks very promising and they are claiming 5 cents per kWh.

 

[mheslep]

I did provide the Nanosolar link.

Their production cost is about 30 cents a watt. and the panel is 14% efficient.

Nanosolar sold out the entire 2008 production before they even produced a single panel. This is the only company currently manufacturing panels for sale but http://www.sunrgi.com/index.html" also looks very promising and they are claiming 5 cents per kWh.

Your previous post said $1.00/W retail. I'm familiar with Nanosolar and other thin film vendors. Please, where does Nanosolar say they are NOW producing $1/W panels, much less $0.30? The industry site Solarbuzz says as of December the lowest price on the market is over $3/W (peak).

 

[Skyhunter]

That is misinformation. I saw the testimony, and he said nothing even approximately describing the current situation as 'unfettered capitalism' or 'run wild with no restrictions'.

I would not characterize it in those terms either. I was quoting someone else and making the point that Greenspan's tacit admission is a testament to failed Reaganomics.

He admitted he made a mistake in believing that that that the market could regulate itself. That those in charge of the financial institutions understood their business. Like most Ayn Rand protege's he believed that capitalists, motivated by greed, would somehow regulate themselves and their greed so as not to kill the host economy.

Why they believe this is beyond me since it has never been demonstrated. In fact the opposite seems to be the norm.

 

[Skyhunter]

Your previous post said $1.00/W retail. I'm familiar with Nanosolar and other thin film vendors. Please, where does Nanosolar say they are NOW producing $1/W panels, much less $0.30? The industry site Solarbuzz says as of December the lowest price on the market is over $3/W (peak).

Sorry mheslep,

If you want to play childish gotcha games I don't have time.

 

[mheslep]

Sorry mheslep,

If you want to play childish gotcha games I don't have time.

This forum has standards against blatant misinformation, observing them is not a gotcha game.

 

[Skyhunter]

This forum has standards against blatant misinformation, observing them is not a gotcha game.

Look first you accuse me of not providing a link. I provided it, you missed it. Your mistake not mine.

Nanosolar's production cost is $0.30 a watt and they are currently producing and selling panels to utility companies for ~$1.00 a watt. Someone as familiar with Nanosolar as you claim to be would know that.

My point is that the technology for solar power competitive with coal is available today. Granted the product is only being sold to strategic partners and utility companies, but it is here now, it is proven, and it works. Scaling up production is the next logical step. This is an area of investment that will put people to work and help green the economy.

 

[mheslep]

Electricity, mainly coal based, for industrial customers costs ~$0.05/kWh now. Large industrial sized solar photovoltaic power costs four times that, $0.21/kWh, in the sun belt, and more than double that cost again outside the sun belt ($0.47 or 9x). The main reason for this is the variability of received solar radiation. A sun belt area receives only 5.5 hours of peak equivalent sun hours per day, so that ~four watts of peak PV panel must be installed to keep up with one watt of fossil or nuclear power that generates 24/7. Furthermore, the pricing listed here does not include the cost of any storage devices to collect most of the PV generated power during the day and then release it at night. Thus without subsidies photovoltaic power is not yet comparable to coal, though it is slowly closing the gap.
http://www.solarbuzz.com/SolarIndices.htm

 

[russ_watters]

Look first you accuse me of not providing a link. I provided it, you missed it. Your mistake not mine.

Nanosolar's production cost is $0.30 a watt and they are currently producing and selling panels to utility companies for ~$1.00 a watt. Someone as familiar with Nanosolar as you claim to be would know that.

mshlep is right: you are making very specific claims and they need to be specifically referenced. You need to actually quote the source (and it needs to be reliable), not just link the company website.

Solar power is a holy grail and as a result, the internet - and the world - is rife with solar power scams. We see press releases and claims from companies who claim they have made an advancement and are just about ready to bring it to market -- and it never happens. So this extrordinary claim requires explicit verification.

Please understand: I'm not saying such a thing is impossible, just that we need to be careful with extrordinary claims.

This skepticism is not uncommon: http://en.wikipedia.org/wiki/Nanosolar#Discussion

 

[WhoWee]

Looking at the situation from where we were, or where we thought we were, versus now where we are, something needs fixing.

The government needs to adopt more effective, and fair, oversight.


Importantly, the entire (US and global) economy needs to be deleveraged, and people need to live within their means.

Low interest rates, a robust stock market and a housing boom all pulled cash from savings accounts...http://financial-education.com/2008/06/07/what-is-behind-the-decline-in-us-savings-rates/

It became apparent in 2005...we talked about it in 2006
http://www.msnbc.msn.com/id/11098797/

Now we want to save, but don't...http://articles.moneycentral.msn.com/Investing/Extra/USSavingsRateFallsToZero.aspx

And yet here we are (as a country)...with a current deficit of roughly 10% of the economy...$1.2 Trillion

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/06/AR2009010602849.html

...plus, Obama says we'll need to borrow about $775 Brillion now to stimulate the economy

http://news.yahoo.com/s/ap/20090107/ap_on_go_pr_wh/obama

...and over a $Trillion per year for years to come.

http://www.huffingtonpost.com/2009/01/06/obama-trillion-dollar-def_n_155710.html


I hope inflation isn't the governments answer to increasing US savings rates.