Thursday, September 2, 2010

Constructive Thinking

I cannot believe it was yet another traffic debacle today! Another 2 hour commute home. It just saps the life out of you. I took tomorrow off and will be off until next Tuesday so a nice 4 day break on the way. Just have to dodge Hurricane Earl but it looks to be staying mostly very south in Massachusetts. Friday night is on tap so get your requests in!

All of a Sudden People are Making Sense
I had to do a few double takes today as I read things that actually made sense for once! I have no idea if this is a new paradigm, or some veiled attempt to goad action from policy makers (sort of a triple dog dare you thing) but I was impressed.

From CNN Money we have these gems:
Not even record low mortgages rates have boosted home sales or enticed a debt-weary public. Of course, this doesn't seem much of a shocker. Experts say home prices - which have fallen by more than 30% since 2006 -- are still inflated by 15% to 20% in many areas...

But evidence is mounting that government interference in the housing market might be doing the broader economy more harm than good, at least for the long-term. A government tax credit that expired in April to encourage homebuyers did help boost sales, but that proved only to be a temporary crutch...

"We're just putting more people in the trap," Baker says of government policies that basically encourage people to buy or stay in homes beyond their budget. "I don't feel good that we're finding more suckers."
This is all true and shows a new thinking about government intervention that has been lacking. It does not end there!

Calculated Risk details the lack of desire among Realtors and home builders for a renewed tax credit. I am not making this up!:
"We are not advocating another one. We think it's important for the market to have time to recover on its own," says Walter Molony, spokesman for the National Association of Realtors.

"From a political standpoint, with Congress not wanting to increase the debt, it would be too expensive," [Bernard Markstein, senior economist with the National Association of Home Builders] says. "In terms of advisable, we are bordering on where tax credits become ineffective."
Now I think the jab about costs (increase national debt) was a ruse, but the other statements were huge. These things just pull forward demand, nothing else. If the economy had caught fire and the credit binge part II had started, fine it would have worked. It is a strike out. Move on.

Welcome folks, to reality. The best part is waking up with Folgers in your cup!:

I can only hope this marks a trend.

Constructive Thinking
Over at The Big Picture author Barry Ritholtz gets constructive and asks:
Yesterday, we discussed Infrastructure spending, following the WSJ article on more tax cuts as a stimulus.
We know from history that rather than temporary tax cuts or spending, its been the big infrastructure projects that leave behind usable assets for the private sector are the biggest bang for the tax backed buck.
Think Interstate Highways, Apollo Space Program, Darpanet (internet), Manhattan Project.
Question: What sort of projects should the US be doing in terms of Infrastructure development?

Now I want to leave aside that most of those programs were from like 100 years ago and now most "infrastructure" projects are tax rip offs (Google Boston's "Big Dig" for best example) that are wasted.

Instead let's get constructive! Enough gloom and doom! Put your thinking caps on, add a big smile and try and come up with some items in the comments. I know you are all very able. From a scan of TBP comments some stand outs:
-High-speed freight/trains
-100% Internet access in the US and its territories, either through broadband or Wi-Fi, as applicable. Universal free Wi-Fi access in all major urban areas
-Electrical grid and water supply improvements
There are plenty more but the best was:
-Licensed and regulated internet poker
Ok, I love online poker!

Stay away from amorphous crap like "better education", or "green energy". Come up with real things that are either doable today, or doable with a few advancements keyed by better funding.

Economic Disconnect's List of Government Funded Infrastructure
-I like the monster internet access idea. What is great is because government works so dumb, I have full faith this could be built and they would have no control over it because they got out smarted by the guys building it. What I mean is don't fear government control of what happens with it.

-I know I have talked about this before, but natural product research is a monster gap in the pharmaceutical world. Why? It is hard! So many drugs come from organisms (they may be made by chemical means later) that have a broad range of activities. Did you know that in labs we can only grow perhaps 3% of all the bacteria/bugs that exist? Did you know that around 70-80% of ALL drugs are natural products! And this is based on the 3% of things that can be grown in a lab! The world's oceans have untapped microbial diversity that is not usable in lab settings right now, what could those bugs give up? Sadly many large pharma companies have abandoned natural product research and this is a monster gap in not only drug therapy research, but many other areas. I do not want to go on all night, but funding for this work is crucial going forward. For an example, here is a pathway I have cloned from Streptomyces that is used all over the world, and no I did not find it (it is very old), it was a control experiment!

-A non-state employee, non-union worker overhaul of bridges and roads in the 6 biggest metro areas.

-Steam generators fueled by the Earth's own heat via tapping in to the Moho.

That should get you started. Sound off in the comments! Best answers get an automatic (non-Beatles) Friday night request.

Have a good night.


watchtower said...

"The world's oceans have untapped microbial diversity that is not usable in lab settings right now"

You have mentioned this in the past, and my question is why is it not usable in lab settings?

(in layman's terms if possible)

CT-Hilltopper said...

Agreed about natural product drug research. If big pharma would spend a fraction of their budgets per year on research such as this, instead of fighting so hard for drugs that are going to go off patent anyway (lets get real here), we are talking money that could be used more productively for the drug companies, and provide much more potential benefits for consumers.

But big pharma wants their money now.

That Beatles thing was for me, wasn't it? LOL I didn't ask for the Beatles. Na na na na na!!!!!!!!!

I know better by now!

EconomicDisconnect said...

No prob! To live you need food and water. To live some bugs need various items like:
-a support structure
-micro nutrients
-environ interactions
-certain food items
We cannot know what these are! In the lab of today we are almost the same lab as 50 years ago with basic agar plate recipes and additives. It was all built on what you COULD grow not on what you might want to. As C-T (and she knows!) said this has dropped off the radar for pharma while the same old drugs get feverish protection. If you want more info, email me and I will write a 10 page summary!

You know I know what you wanted to hear! It's going to lead the night dear!

EconomicDisconnect said...

Whoa! That Rhymed. I am a poet and I didnt even know it!

scharfy said...

I’d like to see more union workers repairing giant potholes. (That shit annoys me when I drive my Escalade around. )

The more guys that can do a job the better because it hurts efficiency, and lowers the ROI into very negative territory. But this isn’t real money we are dealing with here, just funny money from the sucka ass taxpayer.

The guy holding the “SLOW” sign is also very important, and tax dollars should be routed liberally in his direction.

Politicians, mobsters and power brokers all have fallen on hard times as well, so this would help them out too.

All of the machinery and raw materials should be acquired via “cost-plus no-bid style contract awarding” so as to keep costs high. More costs = more stimulus= Mo money

After we are done with roads we can build more houses.

(This was an excerpt from a "moderated" post over at TBP )

It just annoys me all the amazing technology out there and we gamble prosperity on building trains and roads,( or fill gaps in workers pensions and healthcare benny packages....)

Is it 1955? Are we gonna go to the Moon again in 10 years?

EconomicDisconnect said...

Indeed it is frustrating.

Any fight requests for friday night?

scharfy said...


good question.. you seem to have a good instinct on those fights so ill let you do your work!!

Also good posting as of late. Funny, a few weeks ago you were considering dropping the economics angle and poof! - it seems your creative juices are flowing well.

S. Gompers said...

SNK sighting at the dailybail if you are interested, interesting piece on the Moho.

GawainsGhost said...

You think traffic is bad up there, GYC? Let me tell you about my friend Ween.

He's a die-hardest Cowboys fan who grew up in Pennsylvania, Eagles territory. But he's been living and working in China for the last seven years. Finally got his dream job transfer and moved to Dallas.

Bought a car, a 2004 Honda in immaculate condition. Then on his way home from work the other day, some stupid curly blond headed kid ran a red light and slammed into him. First car he's owned in seven years, and three days later, the door is smashed.

He's freaking out. Said he was constantly telling his wife how bad the drivers are in China, and now she's laughing at the drivers in Texas. Go figure.

My request for Friday Night Entertainment is Fleetwood Mac, "The Chain." Lindsey Buckingham is a very much underappreciated guitar player.

By the way, I notice you left a comment on my blog. That was quick. And I'm glad you liked the post, even though I know your disdain the The Band That Shall Remain Unnamed. I thought it was funny.

You're the only Patriots fan whose comment I will approve.

insanity shelter said...

I thought that was Ron Blagojevich in that Folgers commercial for a second.

watchtower said...

I have an unusual request for 'Friday Night Entertainment', might be too far out there, but I thought I'd try.

This kind of fits in with the robot meme thats been discussed here of late too.

This is one of the trailers for the game 'Fallout New Vegas' that is to be released this October:

The person who is saying "War, war never changes" at the end of this clip is Ron Perlman of 'Hellboy' and 'Sons of Anarchy' fame.

EconomicDisconnect said...

I love it when I get plenty of comments!

yes I was serious about that and still am. Still I think this fall season will provide plenty of material.

nifty, glad she is doing well.

Insanity shelter, whoa! Now that you say it it does look like him, creepy.

Watchtower, you should know by now I like game trailers if they are cool. I will check it out.

That car story sucks! The football blog is really wonderful! Thanks for allowing my observations.