Assorted Afflatuses

Thank goodness for Phil Gramm. Everyone and their mother was up in arms this morning when Mr. Gramm, an executive at Swiss bank UBS and economic adviser to Senator John McCain, said Americans were experiencing a "mental recession." But I'm not sure what people found so objectionable about the comment. I mean, it's true!

A recession, as those who have taken an introductory macroeconomics course know, is defined as two consecutive quarters of negative GDP growth. Some might claim the United States is "in the midst of recession," however, the numbers are not there to support such an erroneous claim. Yes, GDP growth in the United States has slowed as of late. But, as our GDP has grown every quarter for the last seven years, the United States is hardly in the midst of a recession.

As Mr. Gramm said to CNN, many politicians, "blame speculators and oil companies for our problems, instead of presenting concrete programs for using energy more efficiently."

It's almost unfortunate John McCain did not endorse Mr. Gramm's views. They make far more sense than Senator McCain's loony economic strategy.

Really John, can you think of nothing better? John McCain's latest proposal to wean the United States off our oil habit — a $300 million prize to the first company who manages to create the next great battery technology — serves as yet another sign that the Arizona Senator does not merit a stint in the Oval Office.

Every manufacturer of battery-powered goods already has a huge incentive to develop better battery technology.

Toyota expects to deliver some 64,000 Prius hybrid-electric vehicles this year, which use batteries at a core component of their hybrid system, each worth about $24,000 in revenue to the automaker. Given that Prius sales alone account for about $1.5 billion in yearly revenue for Toyota, the company has a huge incentive to improve their battery technology. What's more Prius sales alone do not take into account the half-dozen or so other hybrid vehicles Toyota could make more appealing to the consumer by improving their battery technology, and thus their vehicles.

Of course, Toyota is just the tip of the iceberg. Computer manufacturers love better battery technology too because it means they can make laptops thinner, lighter and more powerful, all without decreasing the amount of time the computers can operate unplugged. Industry analysts predict consumers and corporations will buy some 297 million laptop computers this year. Even conservatively assuming that the average laptop sells for $500, 297 million units represents $148.5 billion dollars in revenue. The $300 million McCain battery prize represents a whopping 0.2% of the laptop market alone, which would boost the marginal revenue on a laptop to $501 from $500.

Given the size of the existing market for batteries, the huge existing incentives and the lack of oomph $300 million would provide, John McCain's proposal has no merit. The money probably would do more good funding one of his much maligned "pork barrel projects" or, better yet, paying down the Federal Debt to aid the beleaguered greenback.

If John McCain — or Barack Obama, for that matter — is serious about taking on the climate change issue, he needs to take much bolder action. The US government's fleet of cars, trucks and vans is enormous. Senator McCain could have promised the first automaker to develop a viable zero-emissions vehicle a monopoly on vehicle sales to the government. That's an incentive that might make a difference.

While I hope Senator Barack Obama becomes the next President of the United States, I have long held that his policy vis-à-vis trade takes too projectionist a stance. The New York Times ran a great piece this morning that picked apart some of Senator Obama's statements on trade.

One of those assertions concerned the South Korean auto industry. As the senator correctly notes, the US imports far more cars from South Korea than South Korea imports from the US. Of course, as the Times article explains, South Korea imports very few cars to begin with, and US automakers — well-known for making cars with big engines — suffer from South Korean restrictions designed to minimize the country's environmental impact. European and Japanese automakers, attuned to their domestic markets' demand for small, gas-sipping vehicles, fare better.

But, more than anything, I was shocked that the South Koreans even imported American cars in the first place. In my mind, the American automobile occupies an ugly gray area.

Most cars from Japan or South Korea have stellar reliability, though offer only an adequate driving experience. Cars from Europe, meanwhile, are a dream to drive, but tend to have subpar reliability and cost a bundle to maintain. Of course, the Japanese — especially Toyota's Lexus division — have made huge improvements in their car's handling, and the Europeans, save perhaps Mercedes-Benz, have made reliability improvements.

The American car offers neither amenity: it usually has mediocre reliability and offers a flat, unremarkable driving experience. At the same time, the car usually costs more, lacks essential safety features and has a generally unfinished, cheap feeling. Even people in America seem to agree. Last quarter saw Asian automakers, led by Toyota, sold more cars in the United States than our domestic corporations for the first time. In the high-end market, US consumers clearly view domestic luxury cars as inferior goods, as only now, faced with skyrocketing commodities prices, are they so much as considering the purchase of an American vehicle.

With such a mediocre product on offer, it surprises me that American manufacturers manage to sell cars in the first place. American automakers would probably fare better internationally if they actually produced a product people wanted to buy. People in emerging markets dream of owning an Audi or a BMW, but I have never heard a rising Chinese businessman lust after, say, a Lincoln.

It would take a miracle on the order of The Loaves and the Fishes to convince me I should buy a Ford. Unless some brave American engineer starts her own car company, making remarkable, lust-after-able vehicles I actually want to buy, I doubt I shall ever own an American car.

Just under a month ago, I commented on John McCain's loony idea to give the Federal gasoline tax a summer vacation. Since then, the people in Hillaryland decided to support the same nonsensical idea. The Obama campaign, on the other hand, came out in strong opposition to the temporary gas tax hiatus. They cite, among many other excellent reasons, the fact that most mainstream economists do not support the gas-tax hiatus because it makes virtually no economic sense as a basis for their position.

What disturbs me most about the current debate between the Obamites and the Hillaranians, though, is the Clinton campaign's constant dismissal of economists' ideas. (See this excellent post on the Freakonomics blog.) Economists, the Clinton campaign opines, tend to be the sort of people whose incomes make the whopping $30 savings insignificant and unimportant. As the Freakonomics folks note, this is probably true, given that the average economist makes about 85% more than John Q. Employee.

If these economists were taking their positions based solely upon their individual self-interest — that is to say, if economists oppose the gas tax hiatus because their individual financial circumstances make the cost (fewer dollars in the hands of the government for infrastructure) higher than the gain ($30 that would otherwise have paid for gasoline) — then the Clinton campaign's logic might hold. But these economists believe, based upon their apolitical economic analysis, not through an analysis of their personal finances, the broad macroeconomic impact of this absurd gas tax hiatus will have a bigger negative than positive impact. So, in essence, the Clinton campaign discounts the ideas of highly-trained experts (economists) not because their actual economic analysis is somehow flawed or incorrect, but rather because the experts themselves happen to be more affluent than the average person.

That some voters go along with this logic is also worrisome. Of all the people who could make a high-impact decision, a qualified expert in the field — say an economist, in the case of tax policy — seems to me the best choice. Some voters, however, appear to believe someone less-qualified, but more amenable to throwing a backyard barbeque, is the best candidate. By that logic, it would make more sense for a law firm to take a fifth grader, rather than me, as an intern, because the fifth grader is cuter and somehow friendlier. Does this make sense? I think not.

Addendum: Perhaps my favorite politician, Michael Bloomberg, chimed in with an astonishingly insightful analysis of the gas tax holiday: "Michael Bloomberg said giving drivers a break from the gas tax is 'the dumbest thing I've heard in an awful long time.' "

Over the past week, two fantastic events took place. On Tuesday, the goofballs at Crocs, Inc, manufacturer of the ugliest products ever to exist, gave disappointing guidance for the 2008 fiscal year. That wonderful news sent Crocs' share price into a nosedive. The stock closed at $10.22 today, down from about $17 on Monday. Is the Croc sandal on its last legs? I sure hope so! Those foot coverings are hideous.

In another blow to corporate America, it looks as if the FCC may force sneaky ISPs to disclose the true speed of their Internet access and the restrictions they put on that access. Never have I heard of a customer receiving the "potential maximum possible" speed cited in ISP advertisements. Most people celebrate when their access moves at even half of the promised speed.

More importantly, though, it is essential that customers know which types of network traffic their ISPs either retard or stop altogether. Peer-to-peer file sharing systems, such as BitTorrent, have a bad reputation for allowing unscrupulous people to trade music without a penny going to the artist whose blood and sweat produced the work. In reality, they have the potential to make the Internet much more efficient, and allow innovators to make the Internet even more useful and powerful. Many people use peer-to-peer technology in completely legitimate ways.

The VCR too can be used to violate the intellectual property rights of a television studio or some other such organization. Yet, fortunately for consumers, the Supreme Court ruled that the Sony Corporation could continue selling the VCR because so many completely legitimate uses exist. I find it quite saddening that our nation's lawmakers has become so obsequious to their financial backers that peer-to-peer technology has suffered the opposite fate.

If consumers know their service provider prohibits their legitimate use of technologies with a plethora of legitimate legal uses, they can abandon those tyrannical providers. With any luck, those backward-thinking providers will, through the power of competition, be forced to open their lines to the use of powerful technologies with a potential for illegitimate use.

Cynics take note! Martha Stewart's kitchen is not the sole province of good things.

Rather than comment on Mr. Obama's handling of flag pin questions, I shall turn my attention to a measure proposed by that maverick from Arizona, Senator John McCain. Yesterday, amid a flurry of Pope-related minutiae analysis, Mr. McCain proposed a gaggle of economic initiatives designed to help America's current economic malaise. And among his many proposals was a measure designed to make gasoline more affordable by temporarily removing the 12 cent Federal tax on gasoline. In theory, such a measure would take, as the Senator put it, "A few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up," and thus bolster the economy.

For someone who means to take a strong stance with respect to climate change, the environment and government spending, this hardly seems a good idea.

On the climate change issue, I see any increase in the price of gasoline, especially in a direct way to the consumer as very good indeed. Higher gas prices do not benefit the economy in the short run, to be sure. They do, however, have a fantastic long run effect on the environment, and our national and economic security. It would be folly to make a marginal improvement to our economy now at the expense of the environment and our long run economic future. Cheaper gasoline means more invisible greenhouse gasses nebulously floating around in the atmosphere at the environment' expense and a less competitive market for alternative energy solutions.

As for government spending, it hardly strikes me as financially prudent to remove another chunk of government revenue without a replacement at hand. Mr. McCain speaks of balancing America's budget, while simultaneously giving every American individual and corporation a tax cut. Any reduction in so-called "pork barrel spending" he manages to effect will quickly be offset by the gigantic tax cuts he proposes, which — working under the wildly speculative assumption that the cuts equal one another in size — still leaves America with a budget deficit deeper than the Grand Canyon.

Climate change is, to use the almost platitudinous phrase, not a partisan issue. While I hope Mr. Obama manages to scrape together a victory in November, I think the dialogue and discussion needs to emphasize change now, rather than change in 2025. Perhaps I should have said, "John, Don't Even Think About Thinking About Doing It."

The more I fly, the more I wonder why America's once-great airlines can barely manage to move me from point A to B without an excess of insanity, much less transport me cross country with a dash of class and a pinch of excellence. While I appreciate modern aviation innovations, such the pressurized cabin and the stratospheric cruising altitude, I have a yen for the elegance one associates with Pan Am in the 1930's. People must call it the "golden age of aviation" for one reason or another. I know I would rather cram myself into a cramped metal tube filled with besuited gentlemen and haute couture clad ladies sipping Champagne than a cramped metal tube stuffed with people who constantly redefine the meaning of raunch. (Perfection falls somewhere in the middle of that continuum.)

I always think of Southwest Airlines' now-infamous questionable ensemble incident. Whether the wonky woman's choice of clothing justified the airline employee's action or not, the simple fact that she was wearing something that prompted an employee to think twice about allowing her onto the aircraft says something less than positive. I do not mean to say people should don their Sunday Best just to board an aircraft. It would, however, be nice if people would — as much for their own sake as for the comfort of the other passengers — think twice before boarding the plane in a mini-mini-mini skirt. Granted, I suppose that example speaks more to some Americans' questionable taste — a societal problem of sorts — than to something directly related to the airlines. Not that people wearing mini-mini-mini skirts make my life at 35,000 feet any more pleasant.

Certainly, high jet fuel prices, health insurance costs and post-9/11 security superfluity contribute to the dismal quality of US commercial aviation. But those three costs alone cannot explain the enormous chasm that lies between US carriers and their far superior foreign rivals. It is not as if Air New Zealand has some kind of special agreement with oil producing nations to buy jet fuel at below-market prices. Or, if they do, I don't know about it.

Of course, I will concede that healthcare costs and superfluous security spending do not burden the rest of the industrialized world — one of the many reasons I, the loony free market devotee, support a universal healthcare system. And I will admit that many top-notch foreign carriers receive generous subsidies from their respective governments, which give them some insulation from fuel costs. Curiously, though, as Western European governments have adopted more laissez-faire rules and moved further from their old socialist policies, their airlines have, by all accounts, suffered very little or even improved. In other words, as partial or wholly owned government airlines receive fewer government dollars, their products' quality has either diminished marginally or improved. If state subsidies were the root of these foreign airlines' high-quality product, then, logically, their high-quality product should have either worsened or, at best, remained identical.

That said, I am not the Oracle of Delphi: I have no idea what business wizardry makes flying Lufthansa so much less painful than suffering through torture on United. I do, however, have a suggestion.

As it stands, all airlines flying domestic routes in the US (i.e., New York to Los Angeles or Portland to Atlanta) may not have more than 25% foreign ownership. That nasty little regulation explains why British Airways flies from O'Hare to Heathrow, but not from O'Hare to San Francisco International. Thus, at least on domestic routes, American carriers face no genuine competition. JetBlue, I will admit, does a far better job than U.S. Airways, but I would switch my allegiance to Lufthansa in a heartbeat if they flew domestic routes in the United States. As the people in Frankfurt like to say, "There's no better way to fly."

A healthy dose of competition would do the US carriers a favor. In the one space where US airlines must lock horns with their vastly superior foreign counterparts — on international routes — US carriers step up to the plate and offer a much better product. Take the Miami-Seattle and Boston-London routes. Miami, Florida sits about 2,700 miles from Seattle, Washington, and Boston, Massachusetts lies some 3,300 miles from London, England. The jet stream, however, evens out their flight times, such that each flight takes about six hours to complete. Nonetheless, not a single US carrier offers "international-grade" business- or first-class — the sort of swanky cabin with lie-flat hybrid bed-cum-seat apparatuses and snazzy snacks — on their Miami-Seattle route. On the other hand, virtually all US airlines offer those sorts of amenities on their Boston-London routes, and those who do not are in the process of making those services available. Why? Competition from foreign airlines, who all offer those kinds of amenities to their first- and business-class passengers on international routes. (Note: This paragraph has been edited for factual accuracy post-publish. See the extended entry for the original language.)

No doubt, some lunatics would oppose such a brilliant stroke of deregulation either for fear that Qatar Airways will conspire to destroy Mount Rushmore on an Atlanta-Portland run, or that a handful of American jobs will be lost in the transition. To the conspiracy theorists, I say, buck up and tolerate. From what I hear, Qatar Airways — official sponsor of the weather on England's Sky News — does a marvelous job moving people in flying metal tubes. To the protectionists, I say deal with it. People in the agriculture business (i.e., farmers) were probably none to happy when the industrial revolution reduced the nation's need for farm laborers a hundred some odd years ago. But with a dollop of education and a sprinkling of determination those people managed to migrate — for the better — into the emerging industrial sectors, such as automobile or textile manufacture.

So what are we waiting for? Deregulate already!

The political number crunchers and so-called "strategists" may have their theories. But, so far as I am concerned, the Democratic party's presidential nominating process has no presumptive winner. Of course, that does not mean I cannot vociferously advocate that Barack Obama ought to receive the nomination.

Given Mr. Obama and Mrs. Clinton's nearly identical policy prescriptions and political positions, some might point to Mr. Obama's charisma or his "electability" in a potential McCain-Obama "death-match" as reason enough to make him, not Mrs. Clinton, the Democrat's choice for November. Frankly, though, I hardly see those as the most important factors to consider. Rather, I feel he ought become the Democratic nominee because his supporters are several orders of magnitude more insane than Mrs. Clinton's.

Ask one of Mrs. Clinton's supporters why he or she supports the New York Senator and, from my experience, one receives an enthusiastic, but somewhat tempered response. The same question posed to an Obama supporter, on the other hand, elicits an avalanche of exuberance. His eyes dart skyward, as if to catch a glimpse of Mr. Obama's divine presence, and his hands wave excitedly in a burst of avid gesturing.

It says quite a bit about a candidate when he can inspire so-called "young people" to spend thirty minutes of their precious time watching him speak about race, in lieu of zoning out to a "Friends" rerun or a meaningless mélange of sport statistics on ESPN. People discussed (and, for that matter, continue to discuss) Mr. Obama's race and unity speech in Philadelphia with the same kind of unbridled enthusiasm as the latest episode of Lost. And goodness knows many people speak about that program with an astounding amount of zeal. (Not that I have a problem with the Lost-obsessed set; in many ways I count myself among them.)

Whether Mr. Obama merits the level of enthusiasm his supporters display, I cannot be sure. (Though I would not complain if he took the Oath of Office in January.) From a pragmatic political perspective, however, that is unimportant. If Mr. Obama becomes the Democrats' nominee, the party will have access to his relatively more well-educated, more financially powerful base of insane supporters to make sure he receives enough votes to put him in the Oval Office.

With Mrs. Clinton, the party has a base of enthusiastic supporters, to be sure, but not the kind of hyper-committed folks Mr. Obama's campaign brings to the table. Meanwhile, the Democrats have to contend with a group of ex-Obama supporters who will likely not crisscross the country with the same ardor to support Mrs. Clinton.

If the Democrats intend to exploit this golden opportunity to turn the political tables, they need to learn from their past errors and realize the electorate will not simply hand them the presidency on a silver platter. Howard Dean and his cohorts need to work to win it. And it seems clear to me that the Obamamaniacs will be far more willing to go that chimerical extra mile to ensure Mr. Obama's wife has final say on the White House Christmas décor.

At this week's climate summit in Bali, Indonesia, the negotiations boiled down to this:

Most of the World: We should all agree to legally binding climate change targets.
The United States: We won't do anything unless China and India do something.

On one level, I understand the United States's argument. It makes no sense to allow China and India to continue growing at a breakneck pace with little or no regard for the environment. But that does not mean the United States should stick to the status quo. Despite what Barack Obama or Mitt Romney might argue, spending a few billion dollars to fund dead-end ethanol projects in Iowa does not amount to strong action to combat climate change.

Rather, the United States should take the lead. We should stop acting like a spoiled two-year-old and take clear, decisive action. George W. Bush might have a legitimate reason to call himself the "leader of the free world" if he actually took the lead on climate change, or, for that matter, any other issue. It makes infinitely more sense for the United States to, say, impose a two dollar per gallon gasoline tax, which would help the environment and then some, than to sit around and whine about China.

As I have opined on more than one occasion, the United States stands to gain far more than cleaner air by reducing our dependence on fossil fuels. By reducing our demand for oil, and subsequently driving down the price of crude, we could significantly weaken the grips of the world's petro-dictators, which would put backward-thinking men like Vladimir Putin and Hugo Chavez out of power and make the world a safer, friendlier place for everyone. We would also give a much-needed jolt of capital investment and competitive edge to our nascent green technology firms.

What's more, though, by taking the moral high ground on the climate change issue, rather than continuing to trudge around in moral limbo, the United States would do wonders for its battered image. Our strong stance vis-à-vis global warming might also compel India and China to take action. Whatever flaws we may have, many people in China and India look up to us, and, more importantly, the governments of those countries have a strong desire to engage us in a bout of one-upsmanship.

Fortunately, though, an environmental superiority complex has none of the security risks that come along with a nuclear arms superiority complex.

So, Mr. Bush, skip your Sunday morning bike ride, put on a few extra ounces of weight, and take the lead on climate change. You will be thanked.

Christmas — whoops, "holiday" — music tends to make me sick. Hearing the same overly treacly lyrics and conspicuously upbeat music over and over at every turn should make anyone sick. (Even when Frosty is on the brink of a meltdown, the song stays in major!) But, for whatever reasons, as soon as Thanksgiving has ended and people begin eating turkey sandwiches for a month, Rudolph the Red Nosed Reindeer rears its obnoxious head. Or, in the case of Costco, the ballads and dancing Santa displays come out in August.

Nonetheless, at my family's behest, I began looking for some cheerful holiday music to play on the piano to spare them from the usual classical and jazz compositions I play. Trying to find something tasteful, or, at the very least, not overplayed, posed something of a challenge. After a few hours of auditioning songs in iTunes, though, I stumbled upon the only Christmas album I genuinely enjoy listening to: Lee Mendleson and Vince Guaraldi's A Charlie Brown Christmas.

Thrilled at my discovery, I rushed to sheetmusicdirect.us — my favorite source for downloadable compositions — and bought a few pieces from the Charlie Brown songbook.

Whatever the difficulty label may have said to the contrary, playing "Christmas Time is Here" is no walk in the park. I could not play some of the chords, like the C13 that requires the player to stretch his or her hand an eleventh from C to E flat.

Fast forward a day or two to this morning. Reading The New York Times Magazine, I came across this article about the Guitar Hero-Rock Band phenomenon sweeping the United States. I have never understood why someone would rather pick up a dinky plastic guitar-cum-game console controller and press a series of multicolored buttons instead of picking up a real guitar and playing real music.

Of all the impossible, fantastic places a video game could take a person, the land of Playing a Guitar seems very unimaginative. It is not legal to carry a machine gun through a deserted part of the American heartland and engage friends in a kill-to-win game of tag, nor is it possible for a plumber to fly through interstellar space and engage whimsical robots in an intergalactic epée. On the other hand, guitars of questionable quality can be found at any big box retailer.

But, as I continued to contemplate "Guitar Hero," I realized that it can and does take people somewhere they would not ordinarily go: to a place where they can play the guitar.

I find it incredibly depressing to think that a sizable chunk my fellow countrymen have grown so tired of physical and mental exertion that they must now resort to a simplified method of playing the guitar. I cannot play the instrument, but given the relative simplicity of most popular music — like the rock and roll anthems immortalized in Guitar Hero — I doubt it could be that taxing for the body or the mind to play on the guitar.

It seems to me like attaching a gyroscopic stabilization system and a motor to a bicycle with training wheels.

Of course, some people will probably write me angry emails asking me why I have never made the same statements about other "simulation" games, like Madden NFL of NBA Live.

Those games, however — unlike Guitar Hero or Rock Band — take the player somewhere fantastic. Few people ever have the chance to play football for the NFL or manage a professional basketball team. But anyone with an instrument and a desire to learn can play a rock song. Even The Sims — in which players do nothing more than tell simulated people whether or not to laugh at another character's joke — allows a person to transcend reality and live life as a werewolf or a crazy cat lady.

Sorry Lou Dobbs. We need to mend our broken minds before we even begin to contemplate (if indeed we would even dare do that before taking action) our broken borders. Some have compared our current era to the Dark Ages, with people questioning sound science — intelligent design, anyone? — and demanding our politicians provide easy-to-comprehend sound bites. If people require their music spoon-fed to them via a series of multicolored dots, I may be inclined to agree. For my part, though, I will go back to the ivories and try to master "Christmas Time is Here."