Welcome to my musings on whatever topic catches my eye, plus stories, recipes, handyman tips, welding, photography, and what have you. Oh, and analog/digital hardware design, and software. Please comment on the blog post so everyone who visits can see your comments.

Category: Economics / Money / Investing (Page 2 of 5)

Economics, Money, and Investing.

$1.5 Trillion Tax Cut Fails to Deliver What Congress Promised

Time: December 2017
Place: Washington, DC

Congress: We’re going to restructure the tax code and give you corporations an enormous $1.5 trillion tax break.
Corporations: Great. Thanks.
Congress: We believe this money will cause big corporations like you to increase your capital expenditures, which will stimulate the economy.
Corporations: Why would we do that? We’ll use the money for stock buybacks that drive up the price of our stock and we’ll pocket the rest of it.
Congress: Wait. What? Well, we’re going to do it anyway because our big donors want it and Trump wants it.

Reuters: $1.5 Trillion US Tax Cut has No Major Impact on Business CAPEX.

Please comment below.

IRS Building, Washington DC

IRS Building, Washington DC

Coal Mining Isn’t What It Used To Be

When I was growing up in the 1950s and 60s, the term “coal miner” conjured up a stereotypical image of a man covered head to toe with black coal dust, wearing a hard hat, and swinging a pick or shovel. The work was grueling, dangerous, deadly, and paid terrible wages. In the United States, a shocking 90,000 men lost their lives in coal mines between 1900 and 1950. If there was ever a line of work that could be called “the widowmaker”, it was coal mining. The rest of society viewed coal miners as the bottom of the social hierarchy.

You load sixteen tons, and what do you get?
Another day older and deeper in debt.
Saint Peter don’t you call me ’cause I can’t go,
I owe my soul to the company store.

 –Tennessee Ernie Ford

Harry Fain, 1946 National Archives Photo

Today, coal mining is used as a political football by politicians. Politicians know that it conjures up powerful images that are based on the stereotype I described above. Most recently, President Trump invoked these images repeatedly during his campaign, and it created the desired effect on his listeners.

However, coal mining today isn’t what it was in 1910. The above stereotypes are completely false today. Coal mining has changed radically as have the men and women working in that business. President Trump’s rabble rousing was based on fantasy and imagery that no longer exists.

Back around 1910, there were thousands of coal mines. Larger mines employed hundreds in each shift. Virtually all coal mining was done underground, not on the surface. This meant entering or descending into deep mines. The standard mining technique was room and pillar, which dates back to ancient times. A room is hollowed out with pillars of coal left standing to support the roof. The size of the pillars was based on the opinions of experienced miners. Sometimes, they were wrong. There’s a tradeoff involved. Making the pillars larger provides increased safety but reduces the amount of coal that can be extracted.

Room and pillar is still used today in mines where there’s a valuable enough deposit, like anthracite (hard coal) and surface mining isn’t feasible. However, instead of relying on seat-of-the-pants guesses, science and engineering is involved. The force on the ceiling can be calculated, the compressive strength of the coal deposit can be measured. Optimal column sizes can then be calculated and actual stresses measured so danger can be detected and averted.

For added excitement and profit, one can still get the material left behind in the pillars by a method called retreat mining. Once a room is exhausted, the pillars can be destroyed, one by one, starting with the deepest one. The ceiling is allowed to collapse and the coal recovered. Needless to say, this is a dangerous business. My two coal miner friends here in West Virginia do this kind of work. With modern technology, it can be done successfully and accidents kept to almost zero.

My friends still come home from work with black faces and clothes full of black coal dust — hard shiny anthracite coal particles that sparkle when you look at them. They use the two washing machines at the laundromat set aside especially for coal miners. Unlike their counterparts a hundred years ago, they don’t use a pick and shovel, are highly skilled, and are paid well. But, they are in the minority. The majority of coal is produced nowadays using surface mining, including the infamous mountaintop removal mining technique. Fortunately for the environment, the number of mountaintop removal permits has dropped to about half of what it was ten years ago. This might be from political pressure, or because coal sales have dropped sharply since 2008. I don’t know. The economic collapse of 2008 started a sharp decline in coal sales that continues today. Demand has dropped. Again, President Trump’s rhetoric about increasing jobs in coal could only happen if demand increases. Coal mines are not gold mines, where the demand is essentially infinite. Coal mines produce only the amount of coal that is needed.

Surface mining, which produces the majority of coal today, is done by comparatively few highly skilled workers using gargantuan machines worth millions of dollars each. These machines are so large that you have to see them in person to comprehend. Imagine a bulldozer that could drive down one side of your neighborhood and obliterate every house on one side of the street in a single pass, without the least effort. Or, a dump truck so large that it’s not apparent where the driver is located. You have to climb three flights of stairs to reach the cab. Coal mines of this type employ more people who are mechanics, machinists, welders, engineers, and explosives experts than those who actually do the mining. It’s a whole different world from coal mining in 1910. What’s more, over the next ten years, more of these machines will become robotically controlled with no operator. In twenty years, surface mining will likely be done entirely by computer and robots.

Let’s look at some numbers. In 1900 the population of the country was 76 million and the coal industry employed 500,000 men. So, the better part of one percent of the population, or 1 out of every 152 men in the country, was a coal miner.

In 1900, annual coal production was about 275 million tons. From 1900 to the present, coal production increased to a peak of almost 1,200 million tons in 2008. In 2008, the US population was about 307 million, and the coal industry employed about 70,000 people, nationwide, or 0.02 percent of the population. In 2008 we had one seventh the number of people producing five times as much coal as we did in 1900. Coal production efficiency per worker is 35 times what it was in 1900.

To put these employee numbers into perspective, consider that Walmart employs 1.5 million people in the USA. Amazon employs 570,000. The US Postal Service employs 503,000. The coal industry employs 70,000. To increase production, the coal industry would add a few more machines and a few more employees to accommodate demand. So, to base a political campaign promise on increasing jobs in coal mining is disingenuous at best, stupid at worst. Coal is one of the worst sectors to choose to make such a promise. The number of jobs in coal mining will not increase significantly no matter what happens. The only reason to make such a promise is because it has strong emotional appeal to voters because they still have the old coal miner stereotype in their head and don’t know how things have changed.

The U.S. is Going to Miss the Biggest Opportunity of the 21st Century

Electric vehicles are the wave of the future. Bio-diesel (algae, bacteria), and electric, and combinations of the two are where the future lies. But the U.S. is going to blow it.

For most of the 20th century, the U.S. was the world leader in car manufacturing. This is no longer the case and it looks like the mammoth dinosaur corporations that make up “Detroit” are so hidebound they’re unable to cope with the coming changes. Now it’s looking like the whole thing is going to go bankrupt in the U.S.

But, cars are not dead. In fact, there will be more car sales in the 21st century than in the 20th century as the billion people in China, and the billion people in India reach a level of income that enables them to have cars. The U.S. car industry could be there, ready for the market, but it won’t be.

In order to change this, just about everything from the past must be dropped and new procedures put in place, from corporate governance down to the lowest position in the company. Design cycles must be vastly accelerated. It’s no longer possible to spend five years taking a car from concept to production. In five years, all of the technology changes, and any product that passes through the standard Detroit design cycle will be obsolete before it hits the streets. Consider the Chevy Volt. How long have we been hearing about it? Years. And it’s still years from introduction. That’s ridiculous.

Will it get fixed? I doubt it. But there’s a tremendous opportunity sitting there. The U.S. could again become the leading car maker in the world with the latest technology and best value. But I fear it will not happen. By the time things change in the U.S., if they change, market leadership will have already moved to Asia where the problem is understood and companies move much more quickly to adapt to technology and changing markets.

http://www.nytimes.com/2009/04/02/business/global/02electric.html?th&emc=th

World faces irreversible climate change, researchers warn

The world is facing an increasing risk of “irreversible” climate shifts because worst-case scenarios warned of two years ago are being realized, an international panel of scientists has warned.

Temperatures, sea levels, acid levels in oceans and ice sheets were already moving “beyond the patterns of natural variability within which our society and economy have developed and thrived,” scientists said in a report released Thursday.

The findings came at the end of a three-day conference in Copenhagen, Denmark, where nearly 2,000 researchers gathered to discuss climate change.

See the rest of the story here.

For those personally worrying about foreclosure, Please read this post

This is a cross-post from a forum, reposted here with the author’s permission. I thought it might be of value to some of my readers:

A post in another forum served as a reminder of the economic fragility that many solidly middle class families are facing these days. My day job is in the affordable housing non-profit field, and my agency is among many on the front lines in saving homes and saving families from foreclosure.

So I will repeat what I said in the other thread:

For anyone who is getting behind in their mortgages and worrying about foreclosure, please get help from a non-profit housing organization sooner rather than later. There are new programs and new funds available to help, and banks are much more agreeable to loan modifications and deferrals than they were just a little while ago.

When you’re starting to get behind get some help – call the local HUD-certified housing counselling agency. A list can be found here, or call the HOPE hotline at 888-985=HOPE (4673).

There are a lot of pseudo counsellors and “debt relief specialists” out there preying upon people who are financially and mentally exhausted by economic turmoil. Stay away from them and get help from the non-profits who are the front line of defense in the current housing troubles. My agency has rescued dozens from foreclosure and saved more than 70 rental units that were abandoned by their owners, during the past year alone. There are many more like us.

Please get the name of the people near you from the HOPE line or website, and please be patient with them, they’re among the most overwhelmed workers in our country right now.

If anyone has questions on the availability of resources or anything else to do with these housing rescue programs please feel free to PM me. I will, of course, keep any information private.

Don’t go it alone – individual cases may differ tremendously, but many people can actually be helped if they get help early and find people who can intervene with lenders.

Andy

« Older posts Newer posts »

© 2020 Shuttersparks

Theme by Anders NorenUp ↑