Coyote Blog

I have an innate confidence in technology.  For example, while I understand solar to be uneconomic for powering my house today, I fully expect that to change.  I look forward to the day, not that far in the future, when I can take my Arizona house off the grid, at least during the day.

In contrast, though, it may be that wind power can't be fixed, in large part due to its inherent unpredictability.  Sure, solar has a problem as well, in that it doesn't work at night.  But at least the times when solar is off here in Arizona (ie when it is dark) are predictable and coincide with lower load periods.  Wind is utterly unpredictable and variable, and its peaks and troughs are unrelated to peaks and troughs in electricity demand.

So, if the grid is to reliably supply sufficient power to meet demand, wind must have a backup.  And there is the rub.  Because just about every technology that might currently be used as a backup takes a really, really long time to start up.  Small gas turbines can be producing electricity from a cold stop pretty quickly, but a large coal-fired power plant can take days to go from a cold stop to producing electricity.  This is in part because there are a series of steps where A has to precede B which must come before C to start plants up, and partially just because immediately heating the whole system up would cause the plant to blow up just from the thermal stresses.

So, to back up wind power, traditional fossil fuel plants have to be kept warmed up with turbines spinning.  This means that fossil fuels are burned but no electricity is produced.  I mentioned in a previous post that the largest utility in Germany estimated that 48,000MW of wind capacity was in fact allowing the shut down of just 2000MW of traditional fossil-fuel powered capacity.

A recent article in the National Post argues the Danes are seeing absolutely no substitution from their substantial investment in wind.

There is no evidence that industrial wind power is likely to have a significant impact on carbon emissions. The European experience is instructive. Denmark, the world's most wind-intensive nation, with more than 6,000 turbines generating 19% of its electricity, has yet to close a single fossil-fuel plant. It requires 50% more coal-generated electricity to cover wind power's unpredictability, and pollution and carbon dioxide emissions have risen (by 36% in 2006 alone).

Flemming Nissen, the head of development at West Danish generating company ELSAM (one of Denmark's largest energy utilities) tells us that "wind turbines do not reduce carbon dioxide emissions." The German experience is no different. Der Spiegel reports that "Germany's CO2 emissions haven't been reduced by even a single gram," and additional coal- and gas-fired plants have been constructed to ensure reliable delivery.

Indeed, recent academic research shows that wind power may actually increase greenhouse gas emissions in some cases, depending on the carbon-intensity of back-up generation required because of its intermittent character.

It probably comes as no surprise that the Danes have the highest electricity costs in Europe.  The article goes on to call wind power in the US a "huge corporate welfare feeding frenzy."

Update: Well, the Danish wind industry certainly seems to be in good hands (via Tom Nelson):

Ditlev Engel, president and chief executive of the Danish wind-energy company Vestas, said anecdotal evidence about birds being caught in turbine blades and other environmental horror stories do not usually hold up under scrutiny.

"Do people think it's better all those birds are breathing CO2? I'm not a scientist, but I doubt it," said Engel, whose company is expanding its U.S. manufacturing and distribution operations. "Let's get the facts on the table and not the feelings. The fact is, these are not issues."

LOL - Nothing like a paragraph that simultaneously includes the phrase "Let's get the facts on the table" with the hypothesis that a couple hundred ppm increase in CO2 concentrations hurts birds.  By the way, from the same article, a lot of discussion of the environmental impact of renewables due to their out-sized use of land.  Clearly an issue for solar and wind, and possibly for others:

One of the biggest challenges renewable-energy projects pose is that they often take up much more land than conventional sources, such as coal-fired power plants. A team of scientists, several of whom work for the Nature Conservancy, has written a paper that will appear in the journal PLoS One showing that it can take 300 times as much land to produce a given amount of energy from soy biodiesel as from a nuclear power plant. Regardless of the climate policy the nation adopts, the paper predicts that by 2030, energy production will occupy an additional 79,537 square miles of land.

I am always amazed at the number of environmentalists that laud the Brazilian ethanol push, given the out-sized effect that industry has had in carving up the Amazon rain forest.  As a disclosure, I am a member of the Nature Conservancy, and wild land preservation is my environmental interest of choice, though I prefer to pursue it through private means (ie via private purchases of land for conservation purposes).  The Nature Conservancy used to spend most of its money for this purpose, though of late it has diverged, as so many environmental groups have, into lobbying government to force people to achieve its ends for them rather than to pursue these ends through non-coercive means.

Apparently the  NSA is under some heat for proposing to monitor the communications of a member of Congress thought to be meeting with terrorist suspects:

While the N.S.A.'s operations in recent months have come under examination, new details are also emerging about earlier domestic-surveillance activities, including the agency's attempt to wiretap a member of Congress, without court approval, on an overseas trip, current and former intelligence officials said. . . .

The agency believed that the congressman, whose identity could not be determined, was in contact "” as part of a Congressional delegation to the Middle East in 2005 or 2006 "” with an extremist who had possible terrorist ties and was already under surveillance, the official said. The agency then sought to eavesdrop on the congressman's conversations, the official said.

The official said the plan was ultimately blocked because of concerns from some intelligence officials about using the N.S.A., without court oversight, to spy on a member of Congress.

I have a counter idea.  Why don't we monitor all the communications of all of Congress all the time and post it on a web site.  If they want to exercise ultimate power over us, we can then exercise ultimate scrutiny over them.  Unfortunately, in the world of the future, Congress is likely to be the only group exempted from monitoring.

My son got to play a high school baseball game today at Chase Field, right after the Diamondbacks game was over.  It was really cool to see the kids on a major league field, though unfortunately his team ran into a buzz saw and lost.

Asked after the game what he thought, he said " We gotta play 'em one day at a time.  I'm just happy to be here. Hope I can help the ballclub.  I just want to give it my best shot, and the good Lord willing, things will work out."

Kudos to Harvard, for bravely standing up against the defenders of human rights when no one else is willing too.  From the Harvard Islamic chaplain, who further expresses the great wisdom he sees in executing apostates from Islam.  Good to see that Harvard hasn't gotten any saner since I left.

Postscript:  This is the faculty that claimed moral superiority over Lawrence Summers?  I can see what's coming next -- its wrong to question why women are under-represented in science, because we should just stone them all instead.

via maggies farm

On tax day today, we should remember a key reason why taxes keep going up:  Taxes equate to power for elected officials.  The more money they have to spend, the more power they have.  The more money they have to spend, the more people have to kowtow to them and send campaign contributions either to 1) score a share of the loot or 2) get a special deal or treatment on their own taxes.

We have a sense that there is more corruption than ever in politics, but I think its demonstrably true that people and politicians are not any more or less evil than they were 100 years ago.  The only difference is that the sums in play from political influence are so much larger.  Its a concept I try to explain to people all the time.  The way to fix corruption in politics is not through campaign finance reform, it is through reducing the size of government.  Because no matter what restrictions one puts in place, if we set up a system where it pays to invest in politicians, then people will find a way to do so:

In a remarkable illustration of the power of lobbying in Washington, a study released last week found that a single tax break in 2004 earned companies $220 for every dollar they spent on the issue "” a 22,000 percent rate of return on their investment.

The study by researchers at the University of Kansas underscores the central reason that lobbying has become a $3 billion-a-year industry in Washington: It pays. The $787 billion stimulus act and major spending proposals have ratcheted up the lobbying frenzy further this year, even as President Obama and public-interest groups press for sharper restrictions on the practice.

The paper by three Kansas professors examined the impact of a one-time tax break approved by Congress in 2004 that allowed multinational corporations to "repatriate" profits earned overseas....The researchers calculated an average rate of return of 22,000 percent for those companies that helped lobby for the tax break. Eli Lilly, for example, reported in disclosure documents that it spent $8.5 million in 2003 and 2004 to lobby for the provision "” and eventually gained tax savings of more than $2 billion.

These returns rival those in the narcotics trade, and you know how well we have performed in stopping that.  We are seeing this effect right now in Arizona, where the County Commissioners of Pima County (centered on Tucson) are under investigation for rigging electronic voting machines to pass a recent tax increase.

Under the scrutiny of criminal investigators, election workers in Phoenix have spent the past week in a painstaking recount of 120,821 ballots that were cast three years ago for a Pima County transit tax.

The primary objective is to determine whether someone rigged the election by tampering with the optical-scan polling machines in Pima County, transforming "no" votes into "yes" votes.

The ballot measures wound up securing a half-cent increase in sales tax to provide cash for roads, buses and other transportation projects.

The reason -- taxes are power, and more taxes are more power.

If you move solar panels out of the Arizona desert, they are going to produce less electricity.  You almost don't have to tell me where they are going -- if they are currently close to the optimal spot for maximum solar energy production, then moving them is bound to reduce their output.

Seems obvious, huh?  So why is it so difficult to understand that when the government moves capital and other resources away from the industries where the forces of market optimization have put it, output is going to go down.

Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain's experience with windmills and solar farms is any guide.

For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid.

U.S. President Barack Obama's 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.

The premiums paid for solar, biomass, wave and wind power - - which are charged to consumers in their bills -- translated into a $774,000 cost for each Spanish "green job" created since 2000, said Gabriel Calzada, an economics professor at the university and author of the report.

"The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices," he said in an interview.

We all know from reading the media that the Obama administration is 1) full of brilliant people way smarter than the rest of us and 2) driven by science.  So this insightful exchange between a reporter and White House spokesman Robert GIbbs vis a vis this Spanish study should come as no surprise:

Q: Back on the President's speech today, a Spanish professor, Gabriel [Calzada] Álvarez, says after conducting a study, that in his country, creating green jobs has actually cost more jobs than it has led to: 2.2 jobs lost, he says, for every job created. And he has issued a report that specifically warns the President not to try and follow Spain's example.

MR. GIBBS: It seems weird that we're importing wind turbine parts from Spain in order to build "” to meet renewable energy demand here if that were even remotely the case.

Q Is that a suggestion that his study is simply flat wrong?

MR. GIBBS: I haven't read the study, but I think, yes.

Q Well, then. (Laughter.)

In two sentences, Mr. Gibbs demonstrates that 1) He is an idiot and 2) He has no respect for science.  The correct, intelligent response would be "I can't comment, I have not read the study yet."  Mr. Gibbs does deserve credit for being an apparent master of the non-sequitur.  I have been trying to think of an eqivilent formulation.  The best I can come up with is to suppose someone said that "publicly funded sports stadiums generate no new economic activity and are just a taxpayer subsidy of sports owners, players, and ticket holders" and getting the response that  "how can this be when people still go to the games?"

I was afraid that all this braininess in the White House was going to eliminate the humor from Administration pronouncements but I see that won't be the case.

First an apology  (a real apology, not one of my snarky non-apologies).  On a number of occasions I have written that I thought torture accusations at Gitmo were overheated and a distraction from the real issue -- unlimited incarceration by executive order.

It turns out that what I would very much describe as torture has occurred at Gitmo.

Torture of detainees at Guantanamo Bay has been systematic, extensive and a matter of deliberate policy, says a report originally prepared in 2007 by the International Committee of the Red Cross. Obtained by journalist Mark Danner, the report, which detailed the complicity of medical personnel in the mistreatment of detainees, has been posted online (PDF) by the New York Review of Books.

Techniques practiced at Guantanamo and elsewhere on the 14 detainees examined in the 41-page report include suffocation by water, prolonged standing with arms chained above their heads, beatings, confinement in a box, sleep deprivation and other tactics that involve both physical and psychological abuse. While written in somewhat technical terms, the report emphasizes that the detainees' treatment "amounted to torture and/or cruel, inhuman or degrading treatment."

I am not unaware that the world is a dangerous place, and is filled with people who want to do us harm no matter how nice we are, precisely because we are nice (and rich of course).  But there is a line we draw in a free society over which we do not cross, even at the risk of our own safety, because it imperils our own humanity.  I believe the treatment described in this report crosses that line.

That being said, it is increasingly clear that I was right in one sense - the focus on torture has completely occluded the detainment issue, so much so that Obama appears to be getting away with actually adopting an even more onerous detainment policy than the Bush administration.

The Obama administration said Friday that it would appeal a district court ruling that granted some military prisoners in Afghanistan the right to file lawsuits seeking their release. The decision signaled that the administration was not backing down in its effort to maintain the power to imprison terrorism suspects for extended periods without judicial oversight.

More from Glen Greenwald:

Back in February, the Obama administration shocked many civil libertarians by filing a brief in federal court that, in two sentences, declared that it embraced the most extremist Bush theory on this issue -- the Obama DOJ argued, as The New York Times's Charlie Savage put it, "that military detainees in Afghanistan have no legal right to challenge their imprisonment there, embracing a key argument of former President Bush's legal team."  Remember:  these are not prisoners captured in Afghanistan on a battlefield.   Many of them have nothing to do with Afghanistan and were captured far, far away from that country -- abducted from their homes and workplaces -- and then flown to Bagram to be imprisoned. Indeed, the Bagram detainees in the particular case in which the Obama DOJ filed its brief were Yemenis and Tunisians captured outside of Afghanistan (in Thailand or the UAE, for instance) and then flown to Bagram and locked away there as much as six years without any charges.  That is what the Obama DOJ defended, and they argued that those individuals can be imprisoned indefinitely with no rights of any kind -- as long as they are kept in Bagram rather than Guantanamo.

I was just floored at Glenn Greenwald's defense of the recent DHS report that

defines "rightwing extremism in the United States" as including not just racist or hate groups, but also groups that reject federal authority in favor of state or local authority.

His defense of this report is apologetically that you did it to us, now we are going to do it to you.  Or, more succinctly as he put it in the title of his post, that conservatives reap what they sow.  Or even more simply, in the language of a student explaining a fight to a teacher, "they started it."

This is just unbelievably cynical.  What happened to principled opposition of infringements of individual rights?  What about us libertarians, who are singled out equally as terrorism suspects for holding beliefs similar to those of Thomas Jefferson, but who did criticized Bush as well?  Jeez, this is just so schoolyard, like a bunch of silly kids shouting that the other guy dissed them first.  Do you Democrats and Republicans ever listen to yourselves?  I could take Greenwald's rant on whiny Republicans and substitute only the words "republican and conservative" with "democrat and liberal" and get an identical Free Republic post.  Do you really think this kind of response really answers the issue?

And really, all this is just window dressing for the real issue, the fact that the DHS is spending millions of man-hours creating virtually content-free publications.  I have only skimmed the report, but is there anything here a state or local law enforcement official would find remotely useful?

This post from Kevin Drum didn't start auspiciously, repeating the leftish meme that the tax day protests were all Astroturf events.  But I must admit I had a real double-take on his last paragraph, wherein he points out something about tax polls that most people seem to be missing:

With Tax Day coming up, and astroturf tea parties being organized around the country, a lot of people have been linking to polls showing that most Americans aren't, in fact, actually unhappy with the amount of income tax they have to pay.  Gallup, for example, reports that 61% of Americans think the amount they're paying this year is fair. Or there's this one, also from Gallup, that asks directly whether the amount you're paying is too high or not:

Not bad!  49% think their income taxes are just fine or even a bit low.  Except for one thing: this chart shows exactly the opposite of what it seems.  Consider this: about 40-50% of Americans pay no federal income tax at all¹.  That's zero dollars.  I think we can safely assume that these are the people who think that their taxes are about right.  What this means, then, is that virtually every American who pays any income tax at all thinks they're paying too much. There are various reasons why this might be so (a sense of unfairness regardless of amount paid, a fuzzy sense of how much they're paying in the first place, simple bloody-mindedness, etc.) but overall it's not exactly a testament to our collective willingness to fund the machinery of state.

Outstanding.  Which only leads me to wonder why, if he realizes this, does he believe that people might not spontaneously organize protests, rather than it having to be a Rove-Fox News plot.  I think the answer to that is the Left just can't shake their own perception that protest marches belong to them in the same way the Right feels that AM Radio is their media to rule.  (What, by the way, does that leave for libertarians, other than Rush, Ayn Rand, and Firefly reruns?)

I see a lot of news stories about Obama supporters scratching their heads at why Obama did not get more respect from other nations.  Why do these countries continue to heap scorn on the US as the US contributes more and more to international efforts?

Here is a hint:

1. These other countries share President Obama's attitudes about the rich
2. As far as the rest of the world is concerned, the US is rich

The rich in this country pay for most of the programs Obama takes credit for.  When folks say that Obama "cares", he does so with the money of America's rich.  In return, he heaps nothing but scorn on the rich, blaming them for any economic problems that may exist and criticizing them for not paying enough taxes.

Mr. President, the other countries of the world treat you and this country exactly like you treat the rich, and for the same reasons.  If that frustrates you, look to your own values first.

I did a double take when I found these two stories back to back in my feed reader

1. Via TJIC (welcome back!) Spokane policeman gets drunk, chases another patron out of a bar,  participates in a drunken car chase, shoots the other man in the head, and then initiates a cover-up.  Acquitted and paid $150,000 in back pay.
2. Via Photography is not a Crime (one of my new favorites) Spokane policeman caught peeking into bedroom of 14-year-old girl (possibly after making obscene phone calls) and then  gets in a fight with police who show up.  Charges dropped by accommodating prosecutor.  The officer did have to accept a "last chance" agreement with the force (having already had a history of discipline problems) but since this is his third last chance agreement, I do not think that word means what Spokane thinks it means.

Forget for a moment the real scientific questions about the future magnitude of anthropogenic global warming.  Just imagine the abuse of this new proposed statute, given that incredibly difficult nature of causality in a complex, chaotic system like climate:

An under-the-radar provision in a House climate bill would give plaintiffs who claim to be victims of global warming a way to sue the federal government or businesses, according to a report Friday in The Washington Times.

The Times reported that Democratic Reps. Henry Waxman of California and Edward Markey of Massachusetts added it into a bill they authored.

The provision, which was just released, reportedly would set grounds for plaintiffs who has "suffered" or expect to suffer "harm" attributable at least in part to government inaction. The provision defines "harm" as "any effect of air pollution (including climate change)," according to the Times. Plaintiffs could seek up to $75,000 in damages a year from the government, with $1.5 million being the maximum total payout.

Remember that it was just weeks ago that the President of the United States blamed flooding in North Dakota on global warming.  If flood damage that resulted from a colder-than-average winter and near record snowfall can be blamed on anthropogenic global warming, then anything can.

On the cover of the WSJ today, "US Cargo Ship Repels Pirates."   So there weren't any Spanish treasure gallions to attack instead?

Well, I won't assume you have not heard of it, but until recently I knew nothing about Frank Chodorov and his book "The Rise and Fall of Society."  Having read it (it is a very fast read - you can blaze through it before you are even 25% of the way through John Galt's monologue in Atlas Shrugged), I rank it as a must-read for libertarians.  The Mises Institute sells it and discusses it here.

I have been toying around with a protest idea over the last few days, one that I hope would excite both civil libertarians interested in privacy as well as small government libertarians fed up with government social micro-engineering:

Skip the Census

It was all fine and good in 1810 when they were mainly allocating Congressional Districts, but today the census is the main vehicle for allocating huge amounts of extra-Constitutional federal spending, and provides the information legislators use to justify any number of new taxes and spending programs.   Its time for us to all take those census forms and just circular file them.  I think that this is a particularly powerful act this time around given the emphasis the Obama administration has put on the census as part of its policy initiatives.

In my own business, I get Federal census forms and labor department surveys and tourism board surveys -- stacks of these things -- and I toss every one of them into the trash.  I have zero need to help provide government with the ammunition to further rape my wallet and trash my rights.

I would value your opinions on this.

It is a recurring theme on this blog:  Large corporations who currently dominate their industries generally accept, even encourage, government regulation.  Generally, as industry leaders, they have the opportunity to shape regulation to their liking, and most regulations preferentially help the large corporations over the small, and help incumbents over new entrants.

And here is yet another example, though it is one many of us have been expecting.  Contrary to campaign rhetoric, it appears that Obama's proposed cap-and-trade system will give CO2 certificates to current incumbents for free.  Only new entrants to the market, or those who wish to grow, will have to pay for them.  This in effect makes the system a federal tax on market share changes.  Laws like this are supported by industry leaders in the same way that sitting Congressmen always love campaign speech restrictions.

The next thing to watch for is whether there are provisions for carbon offsets.  Such offsets are an accounting nightmare, and a virtual Disneyland for rent-seeking.  More on cap-and-trade vs. carbon tax here.  More on offsets here.  And more on why this is all silly in the first place here.

Apparently, the Obama administration may soon put limits on short-selling.  If so, this is cargo-cult thinking at its worst.  Prices fell really fast, so it must be the sellers' fault!  If we could just stop all this selling, then prices would never go down!

Here is my previous explanation of why short selling is in fact a critical tool to moderate bubbles, adding to the irony that we should be considering limits on this tool while suffering a bubble-induced recession.

At the start of the bubble, a particular asset (be it an equity or a commodity like oil) is owned by a mix of people who have different expectations about future price movements.  For whatever reasons, in a bubble, a subset of the market develops rapidly rising expectations about the value of the asset.  They start buying the asset, and the price starts rising.  As the price rises, and these bulls buy in, folks who owned the asset previously and are less bullish about the future will sell to the new buyers.  The very fact of the rising price of the asset from this buying reinforces the bulls' feeling that the sky is the limit for prices, and bulls buy in even more.

Let's fast forward to a point where the price has risen to some stratospheric levels vs. the previous pricing as well as historical norms or ratios.  The ownership base for the asset is now disproportionately made up of those sky-is-the-limit bulls, while everyone who thought these guys were overly optimistic and a bit wonky have sold out. 99.9% of the world now thinks the asset is grossly overvalued.  But how does it come to earth?  After all, the only way the price can drop is if some owners sell, and all the owners are super-bulls who are unlikely to do so.  As a result, the bubble might continue and grow long after most of the world has seen the insanity of it.

Thus, we have short-selling.  Short-selling allows the other 99.9% who are not owners to sell part of the asset anyway, casting their financial vote for the value of the company.  Short-selling shortens bubbles, hastens the reckoning, and in the process generally reduces the wreckage on the back end.

Megan McArdle hilariously commented:

I don't understand why the Commission doesn't focus on something more effective, like installing lavish statues of Mammon on trading floors so that traders can better propitiate him.

Update: By the way, this could be argued to be just another piece of corporate welfare.  CEO's hate short sales of their stocks, and would love Congress to ban the practice altogether.  The fact that the practice enforces accountability on them, I am sure, has nothing to do with it.  The reality is that if buying and selling are thought of as voting for or against a company's or asset's value and prospects, then banning short selling is a way of disenfranchising most of the world from this process.

By the way, not that I think it should matter from a policy perspective, but have you noticed that the shorts seem to be right an awful lot?  In retrospect, more shorting of bank and insurance stocks 3 years ago would have been a good thing.

I wonder if the board rooms of Wal-Mart and ExxonMobil are enjoying their probably temporary respite from being first to be set on by the pitchforks.  At least for now, I think the public has decided that there are worse things than companies that reliably provide essential products and services for single-digit margins and without taxpayer bailout money .

A nice example of the car that perhaps encapsulates a whole decade is on sale this week.  Does not appear to have been in the movie, but its pedigree is close.

This is a great example of a point I often make about regulation aiding incumbents and large companies against smaller companies and upstarts.  From the DC Examiner, via Radley Balko

Philip Morris, openly and without qualification, backs Kennedy's and Waxman's bills to heighten regulation of tobacco.

Philip Morris stands to benefit from this regulation in many ways. First, all regulation adds to overhead, and thus falls more heavily on smaller firms. Second, restrictions on advertising help Philip Morris' Marlboro, a brand everyone already knows, by keeping lesser-known brands in the shadows. (Existing restrictions on advertising have already helped Philip Morris in this regard, with an added benefit spelled out in Altria's annual report: "Marketing and selling expenses were lower, reflecting regulatory restrictions on advertising and promotion activities. "¦ ")

Finally, if the bill passes and the FDA gets added control over the industry, Philip Morris, more than any of its competitors, will have access to those bureaucrats and agency heads making the decisions. For all these reasons, RJ Reynolds and other tobacco companies oppose the bills Kennedy and Waxman are pushing.

I very seldom include really long excerpts from articles, but this is perhaps the most telling article I have read to really give you a feel for what the new government ownership of the automakers really means.

It sounds crazy: Just a week after the White House scolded Chrysler LLC for relying too much on gas guzzlers, the company is heading to a marquee auto show Wednesday to unveil a new SUV.

Chrysler insists the Jeep Grand Cherokee, which clocks in at 20 mpg in its two-wheel-drive version and 19 in four-wheel-drive, is a crowd favorite and a crucial part of its lineup.

"This is a very important vehicle for us. It's one of the primary legs of the Chrysler stool," Chrysler spokesman Rick Deneau said. "Customers have told us they want this vehicle and that it's the right size."...

The White House slammed Chrysler for having a product lineup so heavily weighted with trucks and SUVs. It added that the automaker does not have enough products in the pipeline to meet an expected increase in demand for small cars.

But Chrysler is standing by the Grand Cherokee. It's profitable, recognizable and the No. 2-selling vehicle in the Jeep lineup. Grand Cherokee sales fell by almost half during the first three months of the year, but its market share has remained steady, according to Autodata Corp....

Karl Brauer, editor in chief of the automotive Web site Edmunds.com, said it may be hard for Chrysler to please both the government, which is demanding greater fuel efficiency from the Big Three, and its customers, many of whom still demand big cars.

"It would be far more foolish for Chrysler to abandon its core competencies in the Jeep brand lineup than it is to come out with a new" Grand Cherokee, Brauer said.

I hardly know where to start with this.  Some thoughts:

• As expected, the administration does not really care about the near-term recovery of GM and Chrysler, or, if they care, they are totally ignorant as to the realities of the US car market and the sources of Chrysler's profitability.   They care about enforcing a particular political agenda that has little to do with, and may actually conflict with, the health of the company.
• We have hit a new low when the President of the United States has a strong opinion on and reaction to what car a private company chooses to feature at an auto show.
• We REALLY have hit a new low when my newspaper thinks its "crazy" that a private company would follow its own marketing intuition rather than the dictates of the US President as to what car they should feature at an auto show.  The AZ Republic just assumes the company should do whatever Obama tells them to.
• "Expected increase in demand for small cars"  -- Expected, by whom?  Hybrids are currently losing market share.
• It takes years to develop a new car, so this particular variation of the Cherokee has been in the pipeline for a while, and millions of dollars have likely been invested in it.  And the product line makes money, unlike many other Chrysler cars.  But the Administration wants them NOT to sell it?  It takes years to change a company's auto portfolio, but Obama is going to throw a hissy fit because they have not done it in two months?  Don't they know who he is?
• The article even gives the data one needs to understand why buyers don't share Obama's need to downsize their car.  Based on numbers in the article, this SUV uses $235 more gas a year than the Camry (which I guess is a more politically correct car choice).  That is $19.60 a month.  Assuming a car payment of $450 per month, that is about 4% of the car payment.  In other words, the difference in gas use is a TRIVIAL expense for the person who can afford to buy the car in the first place.  Over 5 years, the cumulative extra gas to fuel the SUV costs about the same as the 16" alloy wheel option on the Camry.

Every day, I have an increasing sense that we are creating a dictatorship run by a grad school public policy seminar.

I am sure that Obama really believes, in his heart, that Americans really want smaller cars rather than SUVs.  So what?  By acting on his own preferences, he is breaking what I call marketing rule #1:  Never assume ones own personal preferences are shared by the marketplace.

I wrote the following in the comments to this post where a good Bay Area greenie had expressed similar views (that automakers are hurting because they are producing the wrong cars that Americans don't want):

I have been a marketer all my life. As such, one of the first rules of survival I learned was to never overlay my own personal preferences on the marketplace. GM has had this problem for years, with insular design teams locked in some weird 1970s design world.

But you and others are simply repeating the mistake, with a different set of perspectives -- you assume your personal preferences in cars represent that of the majority of buyers, and you wish to use the fiat power of government to enforce those preferences. It is a recipe for fiscal disaster. I promise you what people buy, for example, in rural Arizona is not the same thing that people buy in SF, no matter how much those on the coasts want to forget that flyover country exists.

I actually think there is decent evidence that a lot of people do want what GM is offering, given their market share. Why do people always say they make cars that no one wants to buy, when they sell 10 million of them each year? I will confess the GM product line does nothing for me, but so what? Others seem to like it, and, unlike many, I don't look down my nose at them for doing so.

The problem is not necessarily their product line, but their cost position. The average price of new cars has not risen for 15 years. Much like in computers, consumers now expect ever better cars for the same or lower price each year. GM is still producing cars with a mindset built in an era of a three-company domestic monopoly, where 4% annual price increases were routine. Their competition is producing like they are Dell or Toshiba, recognizing that they are never going to get price increases and ruthlessly driving down costs.

Update: This is relevent, even if not directed specifically at autos:

Er, industry also knew how to make low-flow toilets, which is why every toilet in my recently renovated rental house clogs at least once a week.  They knew how to make more energy efficient dryers, which is why even on high, I have to run every load through the dryer in said house twice.  And they knew how to make inexpensive compact flourescent bulbs, which is why my head hurts from the glare emitting from my bedroom lamp.    They also knew how to make asthma inhalers without CFCs, which is why I am hoarding old albuterol inhalers that, unlike the new ones, a) significantly improve my breathing and b) do not make me gag.  Etc.

In fact, when I look back at almost every "environmentally friendly" alternative product I've seen being widely touted as a cost-free way to lower our footprint, held back only by the indecent vermin at "industry" who don't care about the environment, I notice a common theme: the replacement good has really really sucked compared to the old, inefficient version.  In some cases, the problem could be overcome by buying a top-of-the-line model that costs, at the very least, several times what the basic models do.  In other cases, as with my asthma inhalers, we were just stuck.

Often "industry reluctance" to offer green products is actually industry understanding of customer reluctance to buy them.

One of the least-discussed but quite important fallouts from the war on drugs has been the incredible power we seem to have handed police authorities to seize assets.  While theoretically, it should be impossible to be fined or punished without being convicted, in fact it is perfectly possible for police to shut down businesses and impose enormous fines without trial through this confiscation authority.   Here is just one recent example that came up this morning:

The FBI on Tuesday defended its raids on at least two data centers in Texas, in which agents carted out equipment and disrupted service to hundreds of businesses.

The raids were part of an investigation prompted by complaints from AT&T and Verizon about unpaid bills allegedly owed by some data center customers, according to court records....

According to the owner of one co-location facility, Crydon Technology, which was raided on March 12, FBI agents seized about 220 servers belonging to him and his customers, as well as routers, switches, cabinets for storing servers and even power strips. Authorities also raided his home, where they seized eight iPods, some belonging to his three children, five XBoxes, a PlayStation3 system and a Wii gaming console, among other equipment. Agents also seized about $200,000 from the owner's business accounts, $1,000 from his teenage daughter's account and more than $10,000 in a personal bank account belonging to the elderly mother of his former comptroller.

FBI agents displayed their usual level of competance when it comes to technology-related matters:

Faulkner says the FBI appears to have assumed that all the servers located at Crydon's address belonged to him, and didn't seem to understand the concept of co-location.

This is over a private billing dispute?  The FBI claims its a much bigger matter - since there was fraud involved as one of the target companies faked some credit references.  Oh, OK, then go right ahead and seize all the family's iPods.

Unchecked executive power seems to be a bad thing only when weilded by the other guy:

The Obama administration is again invoking government secrecy in defending the Bush administration's wiretapping program, this time against a lawsuit by AT&T customers who claim federal agents illegally intercepted their phone calls and gained access to their records.

Disclosure of the information sought by the customers, "which concerns how the United States seeks to detect and prevent terrorist attacks, would cause exceptionally grave harm to national security," Justice Department lawyers said in papers filed Friday in San Francisco.

Kevin Bankston of the Electronic Frontier Foundation, a lawyer for the customers, said Monday the filing was disappointing in light of the Obama presidential campaign's "unceasing criticism of Bush-era secrecy and promise for more transparency."

"Trust Me" is not supposed to be the defining principle in the Constitution for the excercise of power.

More, via Cory Doctorow:

Every defining attribute of Bush's radical secrecy powers -- every one -- is found here, and in exactly the same tone and with the exact same mindset. Thus: how the U.S. government eavesdrops on its citizens is too secret to allow a court to determine its legality. We must just blindly accept the claims from the President's DNI that we will all be endangered if we allow courts to determine the legality of the President's actions. Even confirming or denying already publicly known facts -- such as the involvement of the telecoms and the massive data-mining programs -- would be too damaging to national security. Why? Because the DNI says so. It is not merely specific documents, but entire lawsuits, that must be dismissed in advance as soon as the privilege is asserted because "its very subject matter would inherently risk or require the disclosure of state secrets."

What's being asserted here by the Obama DOJ is the virtually absolute power of presidential secrecy, the right to break the law with no consequences, and immunity from surveillance lawsuits so sweeping that one can hardly believe that it's being claimed with a straight face. It is simply inexcusable for those who spent the last several years screaming when the Bush administration did exactly this to remain silent now or, worse, to search for excuses to justify this behavior. As EFF's Bankston put it: "President Obama promised the American people a new era of transparency, accountability, and respect for civil liberties. But with the Obama Justice Department continuing the Bush administration's cover-up of the National Security Agency's dragnet surveillance of millions of Americans, and insisting that the much-publicized warrantless wiretapping program is still a "secret" that cannot be reviewed by the courts, it feels like deja vu all over again."

Via the WSJ

The Treasury Department has decided to extend bailout funds to a number of struggling life-insurance companies, helping an industry that is a linchpin of the U.S. financial system, people familiar with the matter said.

The department is expected to announce the expansion of the Troubled Asset Relief Program to aid the ailing industry within the next several days, these people said.

Seriously, how far does this go?  Does anyone else picture scores of brooms with pales of water exiting the Treasury building?  It's like one of those farces where each new action to fix a crisis creates a new crisis that is even larger.

Via CBS:

Almost three-quarters of Americans think it is a good idea to raise taxes on people making more than $250,000 per year, according to the latest CBS News/New York Times poll.

In fact, two-thirds of Americans think the tax code should be changed so that middle-class Americans pay less than they do now, while "upper income" people pay more.

Imagine three quarters of the diners in a restaurant suddenly standing up and walking out the door.  As they leave, they announce that the remaining patrons should pay their tabs for them.  Fair?