good things happen in bad times

General Motors will close Hummer maker of the impractical, ostentatious, and downright ugly shoeboxes on wheels. The company had originally hoped to sell the brand to Sichuan Tengzhong Heavy Industrial Machines company, but the $150 million deal fell through after the Chinese government dragged its feet granting approval.

GM's Vice President of Corporate Planning and Alliances, John Smith was disappointed. I, on the other hand, am elated to see these ugly monsters bite the dust.

This is the third time since GM emerged from bankruptcy protection that a deal to sell an unwanted asset collapsed. That should tell you something. Either GM does not know how do deals, or its assets aren't what they are cracked up to be. Both Saturn and Saab will also bite the dust after deals to unload them collapsed.

GM is also closing Pontiac, although it never tried to sell that business.

dasani feel-good nonsense

With great fanfare Dasani, a Coca-Cola company, has introduced the PlantBottle™. In case you didn't know PlantBottle™ -yes it is a trademark- is "an important innovation in the ongoing efforts of Dasani® to reduce environmental impact and advance towards the goal of 100% renewable and recyclable bottles."

It is with great pride and broohaha that the folks of Dasani have now reached 30% (or just short of 1/3 of their stated goal). Not that it matters much of course, because it is truly besides the point.

The environmental damage done by bottled water is not due to bottles alone. Far from it. The bottle is actually a minuscule part of the problem. Even if the folks at Dasani manage to achieve their technological wunderkind, it won't make much of a difference. The key issue in bottled water is with the water itself.

Water is a very heavy substance. Bottling water in small containers and moving those around is the problem. Transporting water is an energy intensive business. Water also has a very high heat capacity. That means it takes a lot of heat to change its temperature. Cooling water and keeping it cool is another very energy intensive business. It is highly polluting in case you did not know. Especially since the same or better quality water is available right from your tap.

Don't fall for Coke's tricks. The only green thing to do is to avoid bottled water like the plague that it is.

home-grown terror

First it was Timothy McVeigh in Oklahoma. Only he wanted to live to watch the spectacle. Now Joseph Stack is upping the ante. In a veritable mini-9/11 suicide attack he crashed his plane in the IRS building in Austin, Texas. Officials were quick to point out this wasn't a terror attack. Austin police chief Acevedo called it, "an intentional act by a sole individual."

We are drawing a fine line here. If flying your plane into a building and killing people is not terror then what exactly is a terror attack? Is it not terror because Joseph Stack was an American, or because he was a "sole individual?"

Note that Joseph left a message stating his intentions. He knew what he was doing. Granted the message was "rambling and lengthy" but he did rail against the government and the IRS in particular. He also killed people and destroyed an official building, or at least a building housing 199 IRS employees.

If that doesn't amount to terror what does?

stockman's take

NPR aired a short interview with David Stockman, the former budget chief of Ronald Reagan, last night. Mr. Stockman may have surprised many by saying banks needed to be regulated. He, who once ran a hedge fund, sounded surprisingly like Nobel laureate Krugman when he laid out his vision for small banks and a split in banking between deposit banks and wall street gunslingers.

He also acknowledged that the tax cuts, a key Reagan platform, did not work. He probably knew that all along, as did all the other Republicans, but their goal, after all, was to fill their wallets, country be damned. Each and every tax cut they implemented added to their and their friend's bottom line and that is what this was all about. The fact that so many not-so-well off people went along just shows you how brain-washed the whole country is. It is another example of people voting against their own self-interest.

Stockman also predicted that the era of tax cuts is over. What we are facing now is a decade of tax increases. The cutting is over, there is nothing left to cut. What we need now is to put money in the government's coffers so it can take of our long-ignored issues.

jobs and why the economy won't recover anytime soon

If you think the economy is on the mend, think again. Never mind the upbeat news reports from Ford and the fact that Cisco will hire 2,000 people. Remember that Cisco laid off close to 10 times that number in 2009, not to mention the cuts in pay and other restructuring efforts. Cisco's CEO is just trying to sound optimistic and ride the wave of profits for a while longer so the well paid executives have time to cash in their options and collect their bonuses.

Let me, once more, repeat the basic dilemma. Over half the American households have zero net worth. They are worth nothing. They are living from paycheck to paycheck and that is all that is keeping them off the street. Never mind that they were probably stupid enough to worry about the deficit, and raise their voices against healthcare reform, so that if they get ill, they will be on the street for sure. They are also getting older like so many Americans and have no retirement benefits either. What that means is that things will get worse, a lot worse, before they get better.

However bad that may sound, widespread poverty alone is not enough to cause an economic crisis. Unless the economy in question is dependent on consumer spending. Unfortunately, two thirds of the US economy is directly related to consumer spending. The real wealth producing jobs and skills have been exported to China, because it was cheaper to do so.

So what do you get when you need consumers to spend and those consumers have no money?

But wait a minute! What about the fabulous stock market rally of 2009?

Here is a very simple explanation for this bizarre phenomenon. Remember that a fairly large group of people made a lot of money in the years prior to the crisis. As a matter of fact, because of the wealth shifting that forms the basis of our economy, these people are extremely well off.

When the crisis hit, they did not want to be seen as indifferent, or out of touch, so they curtailed their spending along with everyone else. They also pulled their remaining money out of investments for fear of losing more. Yes, they did lose, but their losses -unlike those of the rest of America- were paper losses only. You know, the ones that give you tax breaks.

For a while that worked fine and the rich suffered alongside the poor. We won't detail the hardships they endured, which were no doubt heart-wrenchingly terrible, but focus on what came next instead. By about mid-year the rich were tired of suffering so they started looking for ways to put their money to work. They also exhaled and started spending. There is only so much suffering the well-off can partake in before they get tired.

So we got a little rally.

Now consider this. The majority of foreclosures in both residential and commercial real estate are still to come. More people will lose their homes, home prices will fall more and more families will go underwater leading to deteriorating fundamentals -how is that for econo-speak?

Job losses are mounting and even the most optimistic, non-delusional, experts predict things won't get better before year end. Meanwhile Obama has lost his shine, and the Republicans are eager reduce the deficit that was started by the war in Iraq, and increase the tax cuts for the rich. That can only lead to more job losses.

Forget the deficit. If we can't get jobs the deficit will only keep growing. We can't save our way out of this hole as the Republicans seem intent on doing. We have already tightened our belts to no avail.

Without income, there is no solution. And unless someone is willing to spend big time, there won't be jobs to produce the only possible solution: income. See a vicious circle?

brain washed or just plain stupid?

Only 66% of the population of the great state of Texas has full health insurance. Over one fifth of children there have no cover at all. Yet the opposition to health care reform in Texas runs at 87%. Texans apparently believe the legislation is socialist, godless, and a step on the road to a police state. Why they would have such ridiculous and outrageous ideas is anyone's guess.

It is not often that one finds people so determined to vote against what is to their immediate personal benefit. In this age of smart phones, smart bombs and smart cars, it seems we are left with a whole lot of dumb people.

According to Drew West, in his book Political Brain, people are not stupid. He argues the reason why people vote against their own interests is not because they do not understand what that interest is, or have not had it explained to them. It is apparently because they consider having their interests decided for them by politicians who think they know better is seen as a betrayal.

Let me get that straight. If a politician were to offer you $100,000 cash -I think that is an underestimate of what good health insurance is worth, but so be it- you would say no because you felt that having someone else, who acts like they know better, decide what is best for you is a betrayal?

I agree that the reasoning sounds really smart, but I doubt that anyone would say no to a $100,000 check. No matter how much they hate being treated like idiots. Because idiots is what they are. If they can't see that this healthcare reform is directly going to benefit them, they must be idiots.

Let me offer an explanation that makes a bit more sense. First of all, these people are not too bright. I know one is never supposed to say that and it threatens to derail a good argument and prevents people from listening to me, but I would say it needs to be said. These people are not too smart.

Second, and because they are not too smart, they are very suspicious. That too is quite common. People who aren't too bright are often taken advantage of and all of them must have lots of painful childhood memories where smart looking people got the better of them. That has fueled a strong aversion towards sweet talkers. And what better sweet talkers than politicians? It is obvious these people are unlikely to listen to politicians. But Europe has lots of dumb people too and that has not prevented them from acting this way. So there is more.

Apart from being suspicious, the not-so-bright are also paranoid. They are afraid, and they are very susceptible to the Harry and Louise type ads. Those types of ads never aired in Europe and Europeans had good healthcare long before TV ads could brainwash them.

These ads play on important fears: -that one will not have access to the best doctors. Note that none of these people has access to such doctors now, because they cannot afford to go there.

-that care will be denied to save money for the government. Note once again that these same people are now barred from care because they cannot afford it or because their insurance company will not pay or threatens to dump them.

-that government bureaucrats will make decisions for them. Note that company bureaucrats already do so for insured Americans. There is no equivalent of that in Europe.

-that the country will turn to communism. This one is for the patriots. Note that all Western democracies except the US have solid healthcare systems without being communists.

-that the deficit will skyrocket. This one is for the more sophisticated among the dummies. The ones who want to show off to their kids and peers by pretending they are Wall Street tycoons. The ones who think they can afford to be worried about the debt burden.