The Funniest Radio Program Ever

So, I’m on my way home from work.  Lately, just to hear what they’re up to, I’ve been tuning in to a NPR station.  They had some news bit about how U.S. industry can bring back jobs from China, specifically, the solar power industry.

lol, listening to some socialists/communists trying to explain basic capitalist principles was a riot!  They properly presented most facts, but it was so disjointed, and lack such cohesion, I’m thinking they asked an economist for talking points but no explanations.

I’ll try to pick up on the highlights.  And then point out some factual errors.  My thoughts in italics.

China has a labor cost advantage.  However, the cost advantage is lessening.  This will continue in much the same way Japan’s did.  Japan started their economic growth with a huge advantage and then it lessened until now, they are shipping out their industry.

Much of the savings in labor costs are negated by transportation costs.  In many, if not most industrial enterprises, labor costs only total about 10% or less of total production costs.   They went on to equate environmental laws with social responsibility and how this may present an economic advantage to producing in the U.S.  This is one of the places they fell off the rails.  Our environmental laws currently in place only equate to social responsibility in the abstract.  When the laws deplete the ability to pay for social responsibility, the laws then worked contrary to social responsibility.  These pinheads didn’t understand what they had stated.  U.S. companies didn’t move their production to escape 7-8% production costs only to have the savings ate by transportation costs and cost of moving the plants.  They moved to escape the draconian anti-industrial regulations that are prevalent in this country.

They went on to discuss the priorities of the U.S. consumer and about how we’ve viewed globalization as a product discount; that our goods are cheaper.  Then they went on to state that we’ve been acting this way for the last 15 years.  Sigh, uhmm no, it took us much longer to kill the greatest industrial nation this world has ever seen.  We’ve been doing this for the last 50 years.

They went on to talk about how renewable energy is our way out of our industrial lethargy; how it’s the way of the future.  They also mention how some U.S. companies have petitioned the U.S. for tariff protection from the Chinese solar panel imports.  No, its not.  Look, I’m all for protecting the American worker.  History has shown that we need to.  Tariffs may be one way, but it certainly isn’t the only way.  And tariffs would only work if we have the necessary materials here.  The solar industry in the U.S. will only be a niche industry.  Solar won’t work in our northern areas.  I’ve yet to see a successful large solar electric generation plant.  It won’t happen because of the logistical nightmare.  The damned things are also natural bird dropping catchers.  They only work during sunny days.  Yes, you can still get generation on cloudy days, but how does one plan for base load adjustments?

So far, the only politician that has stated what is necessary to get this country going again is Gov. Perry.  I truly wish someone with a more forceful argument would come by, but at least he gets it.  In certain industrial production plants the largest cost of production is energy or fuel.  That is to say, for welding shops, fire up that bad boy, fire up about 50-100 of those bad boys.  That’s money.  For a smelt, fire it up!  That’s money.  It is entirely feasible to knock the cost of energy(electricity) and fuel in half in just a few years.  And over a period of 10-20 we could knock it down even further.  Between this nation’s oil, gas and coal reserves, coupled with new recovery techniques, new sources of fuel from neighboring nations, we may not be able to eliminate all imports of oil, but we certainly can significantly reduce OPECs importance to where it wouldn’t be to their benefit to throttle our supply.  As to our energy production, we already are self sufficient for all practical purposes.  All we have to do is embrace a proper nuclear, coal, gas, and hydro mix and we could more than half the cost to the end consumer.  It truly is a case of ‘build it and they will come’.  In the U.S. energy use is equivalent to economic activity.  More energy production encourages and is an impetus to economic activity.  Its synergetic.  The more cheap, reliable, available energy we have, the more economic activity is encouraged.  The more economic activity, the more demand for energy.

Off to re-affirm some posits on the calculus and trigonometry of spheres on a plane with reflective boundaries.  We have an infrequent commentator here whose opinion on the energy posit I’d love to hear……..  GregO

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2 Responses to The Funniest Radio Program Ever

  1. GregO says:

    Ah James, a topic near and dear to my heart where to start?

    From a purely commercial standpoint, power reliability and predictability are both important as price can always be passed on to customers in various forms – less service, higher costs, the key is to know the percentage of operating costs that are energy related and cleverly adjust – remember if rates go up for you, they go up for your cross-town competitor as well.

    Here in the US we are in a good position compared to China and Mexico because energy rates and services are reasonably predictable.

    We (my company) have personal business allies in both Mexico (Saltillo) and China (Shenzen). In Mexico, power availability is a nightmare of constant negotiations, payoffs, and the consequences of non-payment/non-cooperation are harsh. They come out and cut the power lines to your facility. I mean with bolt cutters. Just having to constantly hassle with power companies is a tremendous sap on time and personal energy. I see this as a kind of second-hand government incursion into business as eventually all the “servicing” finds its way to someone in power.

    The US hasn’t fallen this far – yet – but ever so slowly there are getting to be more and more little hassles with the power companies here stateside. Be vigilant! IMHO the electrical power grid will be where our real freedoms are compromised. When the grid goes down due to political shenanigans, we need to hit the streets. Enron should have been a much bigger wake-up call to us.

    To me and my experience, China is a completely different animal energy wise. In many ways, they are in the stone age and to me, that explains their fascination with solar. Since their grid is far more primitive than ours, they actually rely, to a certain extant, on solar power because they have no other viable power. They are subjected to a horrible level of centralized control and were it not for the venerable age-old resilience and ingenuity of the Chinese people conditions in China would be unspeakable.

    Whatever the numbers say, I do not feel threatened by China. They are still a third-world country with horrific built-in problems. We (and others) have made them a manufacturing power-house. Show me the Chinese Apple. Show me the Chinese Space Shuttle (although they are making great strides in space). Sure they make solar panels in China – right where that backward stuff belongs; in the third world. People with working power grids, resources and good sense drill for oil and gas.

    Now to America. Make no mistake. We are a dominant player in the world manufacturing markets. We have nothing like the corruption of Mexico or China; but we are in danger of taking our advantage for granted and gambling it away on foolish nonsense like CO2 reduction and fears of man-made global warming from energy use. This idiocy is a kind of cancer growing on our healthy, vibrant body politic – to think that artificially increasing energy costs is somehow constructive borders – no – crosses from foolishness straight into insanity. If energy costs increase, all costs increase, and if American costs to produce increase, we will sell less, and if we sell less, we make less, and provide fewer jobs. It’s quite simple really.

    • suyts says:

      Thanks, Greg, I knew I could count on you to spell it out plainly. If energy costs increase, all costs increase, and if American costs to produce increase, we will sell less, and if we sell less, we make less, and provide fewer jobs. It’s quite simple really.

      Energy and fuel reliability and availability are just a couple of areas where the U.S. still holds an advantage over most other nations, especially over developing nations. By insisting that we throttle energy production, we are throttling production of all other products and are failing to capitalize on some of the biggest advantages this nations holds to offer.

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