Energy policies…Where and what are they?

While on the campaign trail, people always ask me about rising fuel costs and what I think the problem is, and what can be done about it.  I always explain that the basic problem is due to supply and demand.  There’s less supply and more global demand. 

Pretty simple.

But after disecting this issue a little more, I’ve come to realize that the real cause of this problem is that our government hasn’t, and doesn’t, have an energy policy to speak of.  I did some research and back in 2004, the oil companies got together and put together a real enegy plan and presented it to the Congress and the President.  This plan had four key components to it:

1.  Nuclear Power - The proposal pushed for the United States to begin building new nuclear powerplants that could not only supplement our existing plants, but could also replace them in the future.  It also encouraged the government to increase spending in developing new nuclear technologies.

2.  Remove the red tape - It also requested that the government enact policies that would remove the legal obstacles that are preventing these new plants from being built in cities and communities across the country.  In other words, politicians wouldn’t be able to use the courts to say “not in my backyard.”

3.  Access domestic oil reserves - DRILL! DRILL! DRILL!  Go to Anwar and into the gulf and tap into our own reserves.  

4.  Increase fuel economy - The proposal encouraged the automakers to develop more efficient automobiles with substantial increases in fuel economy.

Now this sounds like a legitimate energy policy.  It pushes development into existing and new technologies.  It requires the government to get out of the way and prevents the lawyers from being obstructionists.  It works towards energy independence and away from foreign influence, and it encourages the automakers to develop new technology that will reduce the amount of fuel we use on an individual basis.   

So they presented this plan to both the Congress and the President as a way to prevent high oil prices and reduce our dependence on foreign oil and what did we get.  Ethanol.

Now, oil is at $120 a barrel and our food prices are skyrocketing.  But wait, it gets better.  Wall street is now projecting $200 a barrel by 2009, which means by December, we will be paying between $6-$7 a gallon for gasoline.  And it doesn’t get any better folks, because none of the current Presidential candidates have an energy plan either.  

Sorry, my mistake.  They do have a plan.  McCain wants to suspend the federal gas tax until August.  Hillary wants to suspend the tax and then take profits from the oil companies and attack OPEC.  And last but not least, Obama wants to do nothing.

This is our current and future leadership in action.  In my opinion, they are nothing more than a bunch of crisis managers and unless someone is willing to step up and take the reigns (I will when I get there), then we are in for Jimmy Carter days new and improved.  For those of you who may not be old enough to remember, ask you parents.  I predict that the response you’ll get, will be something similar to a trauma to the groin.    

Proposed fuel cost solution is not a solution.

I truly believe that our so-called “leaders” have lost their minds!  This weekend, I got to hear our Presidential candidates offer up their ”solutions” for rising fuel costs.  All they could come up with was either suspend the federal gas tax for 4 months, or suspend the federal gas tax for 4 months and make the oil companies pay for the difference or do nothing. 

What I want to know, since I’m just a dumb, tax paying, gun owning, bitter American who just clings to my religion, is how you solve a problem, if you don’t understand it’s cause it in the first place? 

Here’s the number one cause as to why fuel costs are so high; supply and demand.

Ten years ago, 10-15 million barrels of oil a day output was enough to meet the demands of the global economy, but not today.  Not when foreign economies like India and China are growing at double digit rates annually.  If you want fuel costs to come down, here’s some hard facts of life you’re going to have to accept:

1.  You must increase supply and realize that big oil is not the enemy, they are the solution.  The governmental, economical and environmental regulations that have been placed on them are the enemy.  If you want the costs to come down, then big oil must become your best friend.  Remove these obstacles and let them start building new refineries and let them bring the ones that were shut down during the Clinton administration back online. 

2.  DRILL EVERYWHERE!  We’re going to have to drill in the gulf (if you don’t already know, China, Venezuela and Cuba are already there) and we’re going to have to drill in Alaska.  (The caribou are just going to have to make do).  And for all you tree-huggers out there, I’m not saying let them destroy the environment.  They still need to be responsible, but we have to allow them to do what’s necessary, within reason, to access these reserves.  Also, by drilling domestically, we’ll be sending a message to OPEC that we will no longer allow ourselves to be bent over, and if they want to retain their best customer, they may want to increase production now. 

3.  Ethanol is NOT the answer.  Did you know that it takes 400 pounds of corn to produce 25 gallons of ethanol, and the process uses more energy than it produces?  Also, ethanol is a detergent and because of this, it can’t be put into pipelines.  Therefore, it must be transported by truck and mixed onsite.  That’s not what I would call an efficient process or a logical solution.

4.  Hybrids are NOT the answer.  Sure, they get improved mileage, but it’s still a new technology and they have their own problems to deal with like “what happens when our landfills start filling up with used fuel cells”?  Has anyone done the environmental study on that one yet? 

Now I agree that the solution must be twofold.  We have to come up with a solution that will help with short-term costs now, but we also have to focus on our long-term needs as well, and that’s why we have to start exploration and drilling now.  I also think that we should provides incentives for businesses to develop new technologies.  Something like the X-prize that was given to Steve Faucet for developing a new type of spacecraft.  Offer a prize for the person or company who can come up with a new engine, or add-on component to any car that can obtain something like 100 miles to the gallon (Just a thought).   By doing something like that, you will be encouraging individuals to think outside the box and maybe, just maybe, we’ll stumble across something that could provide a real solution to the problem we face.  

 

 

 

 

 

Amen!!!

Am I the only guy in this country who’s fed up with what’s happening?  Where the hell is our outrage?  We should be screaming bloody murder.  We’ve got a gang of clueless bozos steering our ship right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane, much less build a hybrid car.

But instead of getting mad, everyone sits around and nods their heads when the politicians say, “Stay the course”.  Stay the course?  You’ve got to be kidding.  This is America, not the damned Titanic!  l’ll give you a sound bite: Throw all the bums out!

You might think that I’ve gone off my rocker, and maybe I have.  But someone has to speak up.  I hardly recognize this country anymore.  The most famous business leaders are not the innovators, but the guys in handcuffs.  While we’re fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions.

That’s not the promise of the America my ancestors and yours traveled across the ocean for.  I’ve had enough. How about you?

I’ll go a step further.

You can’t call yourself a patriot if you’re not outraged.  This is a fight I’m ready and willing to have.  The best fight is Crisis! Leaders are made, not born. Leadership is forged in times of crisis. It’s easy to sit there with your feet up on the desk and talk theory. Or send someone else’s kids off to war when you’ve never seen a battlefield yourself. It’s another thing to lead when your world comes tumbling down.

On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes.  So, here’s where we stand.  We’re immersed in a bloody war with no plan for winning and no plan for leaving.  We’re running the biggest deficit in the history of the country. We’re losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs.  Gas prices are skyrocketing, and nobody in power has a coherent energy policy.  Our schools are in trouble.  Our borders are like sieves.  The middle class is being squeezed every which way. These are times that cry out for leadership.  But when you look around, you’ve got to ask: Where have all the leaders gone? Where are the curious, creative communicators?  Where are the people of character, courage, conviction, omnipotence, and common sense?  I may be a sucker for alliteration, but I think you get the point.

Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?  We’ve spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.  Name me one leader who emerged from the crisis of Hurricane Katrina.  Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm.  Everyone’s hunkering down, fingers crossed, hoping it doesn’t happen again. Now, that’s just crazy.  Storms happen. Deal with it. Make a plan. Figure out what you’re going to do the next time.

Name me an industry leader who is thinking creatively about how we can restore our competitive edge in
manufacturing.  Who would have believed that there could ever be a time when The Big Three referred to Japanese car companies? How did this happen, and more important, what are we going to do about it?

Name me a government leader who can articulate a plan for paying down the debt, or solving the energy crisis, or managing the health care problem.  The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry. I have news for the gang in Congress. We didn’t elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity.

What is everybody so afraid of?  That some bonehead on CNN will call them a name?  Give me a break.  Why don’t you guys show some spine for a change?  Had Enough?  Hey, I’m not trying to be the voice of gloom and doom here.  I’m trying to light a fire. I’m speaking out because I have hope, I believe in America.

In my lifetime I’ve had the privilege of living through some of America’s greatest moments.  I’ve also experienced some of our worst crises.  If I’ve learned one thing, it’s this: You don’t get anywhere by standing on the sidelines waiting for somebody else to take action.  Whether it’s building a better car or building a better future for our children, we all have a role to play.  That’s the challenge for people who, like me, believe in America.  It’s not too late, but it’s getting pretty close.  So let’s shake off the crap and go to work.  Let’s tell’em all we’ve had enough.   Lee Iacocca

Why is that?

As my campaign begins to take on a life of it’s own, I’ve been privileged to be able to research many issues, some that I might not have otherwise been drawn to.  We all know the front page issues like the economy, the housing crisis and health care.  But what many of us fail to realize, is that there are some real serious issues in our communties that have been largely ignored.  I want to focus on one issue in particular; HIV/AIDS.

In my research, I have found some startling statistics.  Here’s just a few about our own city:

1.  St. Louis city has the fifth highest HIV infection rate per capita in the country.

2.  St. Louis city has the highest number of STD infections per capita in the country. 

3.  1/5 of all new HIV infections are caused by intravenous drug use.

4.  Black Americans represent 60 percent of all AIDS cases.

5.  30 percent of our prison population is infected with the HIV virus.

6.  Black women represent 47 percent of all new HIV infections.

7.  The number one cause of death for black men between the ages of 15-35 is AIDS.

When I read these stats, I was shocked.  You see, most of us go through life as if we’re driving on the highway, and every issue is nothing more than a billboard that we casually glance at as we drift on by.  But what I began to realize about these stats is that we have an epidemic on our hands, right here in our own backyard, and no one is doing anything about it.    

I think I know why. 

I just turned 40 about a month ago, and I remember back in the early 80’s when AIDS arrived on the scene.  Back then it was seen as a “gay, white man’s disease”.  People talked about how it was going to be the black plague of the 80’s.  The government got involved and spent all kinds of money on advertising campaigns and people marched to generate awareness.  There was a real concern within our country that this was an epidemic.   

But during the 90’s, something happened…

The death rate and the number of infections among gay white males began to drop, but this was also about the time that intravenous drug use began to rise, and the number of infections among the black community began to rise.  It hasn’t stopped yet.  My point is this;  when it was considered a “gay, white disease”, it was a problem that had to be dealt with.  But now that it’s considered a “black disease”, it’s swept under the rug.   

Why is that? 

Congress, DO YOUR JOB!

I recently attended a meeting where the featured speaker was a current “Congressperson”.  In attendance, were approximately 40 prominent Republican supporters, who wanted to hear this person’s opinion on the current state of affairs in Washington. 

Now keep in mind, I’m not an elected official yet, so when I attend these things, I do so as a concerned taxpayer, not a politician.  Needless to say, after about 10 minutes, I was fit to be tied!  All I heard was every reason under the sun as to why no real progress is being made in Congress.  It’s an election year.  We’re not in the majority anymore.  Everyone’s focused on the Presidential race.  Blah, Blah, Blah…

How about this?  Weather it’s an election year or not, weather you’re in the majority or not and regardless of who wins the White House, YOU STILL HAVE A JOB TO DO!!!

Here’s why things don’t get done in Congress:

1.  Congress is too involved in things that don’t matter.  Who cares if baseball players are on steroids?  Hell, most Americans don’t care if they’re all juiced and have it on tap in the dugout!  Quit wasting time on things that you shouldn’t be involved in in the first place.    

2.  3 1/2 day work weeks!  What’s up with that?  Every other full-time American I know works at least 40 hours a week minimum!  They should be working 12 hour days, 7 days a week!  You want to go home, then do the job we’re paying you for and get something done!  

3.  4 months paid vacation!  That’s right!  The last time I checked a calender, there was 52 weeks in a year and our hard working representatives (sarcasm implied) are only in session for 32 weeks.  Here’s a novel idea.  You get two weeks vacation per year and the only days you get off are weekends and national holidays, just like the rest of us.  Leadership means you lead by example.

4.  Here’s another novel idea; if you’re running for re-election, then campaign all you want during the 4 months that you have off during the year, instead of the entire year since it’s an election year.  Besides, if you’re doing a great job, then getting re-elected should be easy; you’re an incumbent, you have access to the press and the media and raising money should be easy since you have name recognition.       

As you can see, I tend to get a bit miffed when I see all of the problems this country is facing, and all our so-called leaders can say is, “it’s an election year”.  If it’s an election year, then they should be doing their best stuff.  This is no different than professional sports. 

Ever notice that when a players contract is in it’s final year, they usually raise their level of play?  Why is that?  It’s because they want to get re-signed.  

In politics, politicians do their worst stuff in the final year and then blame it on the election year, but promise to do better the following year.  What garbage!

Remember this come November;  WE ARE THE EMPLOYER, THEY ARE THE EMPLOYEE.  What do you do with an employee who only shows up part-time for a full-time job?  What do you do with an employee who takes 4 months off PAID?  What do you do with an employee who was hired to do a job, but never does the job?  Answer:  FIRE THEM AND FIND SOMEONE WHO WILL! 

Housing Crisis - A solution

Are our politicians blind? 

I ask this, because their complete disregard for the current housing crisis staggers me.  So far, all I’ve seen is government bailouts and Barack Obama wanting the government to take control of the markets. 

What kind of leadership is this? 

There is a solution.  A solution that I’ve been proposing for almost a year now, and it would work, and it would work in a dramatic fashion.  Here’s how you stop the foreclosures dead in their tracks, allow people to remain in their homes, and allow the banks to continue to make money, without having to write down losses or go into the real estate business. 

First, you must understand that the banks that are servicing this paper, don’t want to go into the real estate business and they don’t really want to throw someone out of their home.  Second, most people didn’t wake up one day and decide that they didn’t want to make their house payment any longer.  Most were forced into the situation when their rates adjusted.  Thirdly, lending conditions were dramatically different then what they are today, so the process must be streamlined.  

So here’s how you solve the problem:

1.  Recast a new Note and Deed of Trust at the original rate of which the loan was taken.  (This would only apply to rate / term refinancing and ARM’s with negative amortization would be exempt) 

2.  Apply any past due payments, along with any fees, to the new loan amount and re-amortize the loan on a term that is most affordable for the borrower. (The loan must be a fixed rate loan) 

3.  Because the new loan is based upon making the payment affordable again, credit score, income, asset or property valuation is not needed or necessary. 

TADA!!!!!! 

By doing this, the servicer, A) receives monthly payments, which means profit.  B) They don’t have to go through the process of foreclosure.  C) They don’t have to sell a property in a declining market with virtually no way of obtaining a profit.   

So how does the homeowner benefit?  A) They get to keep their home.  B) The monthly payments are now affordable again. C) They no longer have to neglect paying other obligations. 

So how does the market benefit?  A) Property values stabilize.  B) Wall Street investors stop taking credit losses.  C) More money back in circulation due to the restoration of liquidity.     

The Housing Crisis - When worlds collide.

Everyday, it seems as if things just keep getting worse; the economic slowdown, the housing crisis, the credit crisis, higher energy costs.  If you’re like me, then you have one looming question:  Where is our representation? Where are our so-called “leaders”, with all of their wisdom and insight?  What are the solutions they’re proposing to stop this car wreck?  I haven’t heard one viable solution from any bureaucrat out of Washington.

Here’s what I can tell you about regarding one of these issues: 

Housing Crisis: This one is near and dear to me, because I’m in the mortgage industry.  The current situation has turned into a ticking time-bomb that can be diffused, but unfortunately, the powers that be, are too busy opposing each other to be effective. Case and point; Fed Chairman, Ben Bernacke, has cut the prime lending rate more than 1.5% over the past six months, bringing mortgage interest rates to below 6%.  That’s great news for homeowners who may have higher rates or have adjustable rates that may be changing in the near future.   Problem:  Fannie Mae and Freddie Mac continue to either revised or eliminate many of the loan programs that are needed for these borrowers to correct their present situation.  Many of these revisions happen on a daily basis, so even though a loan may be eligible today, it may not be tomorrow.  Also, Fannie and Freddie have now implemented what they are calling “risk-based pricing”. Meaning that if your loan has ANY increased risk associated with it i.e. lower credit score, higher loan to value, etc. (which most loans do thanks to decreasing property values) than your loan will be assessed a fee based upon that risk.  If you have a FICO score of between 620 and 640, look forward to a charge between 1 and 3 percent being added to your loan.   Another adverse factor is the declining property values.  This is attributed to the concept of supply and demand.  Currently, the market is saturated with homes for sale and due to the amount of time that it’s taking to sell a home; sellers are cutting deep into their profit margins.  Many are willing to take losses if it means not having to cover two mortgage payments.  Because of this, recent sales set the level of competing prices.  In other words, if you have two similar homes for sale for say $250,000, and one is sold for $220,000; guess what?  The poor guy who still has his on the market for $250,000 is hating life, because the one that sold for $220,000 set the market for what someone is willing to pay, and is now the best comparable when determining value. This is extremely tough for sellers who have foreclosures in their neighborhoods, have homes being sold on short-sales or have builders selling their homes for  To make matters worse, Fannie and Freddie have now implemented a “declining market” rule, which states that if a property is located in a market where the property values are declining, (the entire country) than the requested loan to value will be reduced by 5%.  In other words, if you need to refinance your home at 95% loan to value and you’re home is located in a “declining market” (the entire country) then your loan will be reduced to 90%, which essentially kills your loan.  Say hello to foreclosure! 

Your thoughts…