FREE $350 billion stimulus!!!

Re: Radical Solutions for a Crazy Crisis

Boost the economy in a radical way for America -- conventional, almost old fashioned for the rest of the modern OECD world -- pay labor the maximum its utility will justify, not the least the race to the wages and benefits bottom can squeeze it price down to.

Quickest jump start for the economy -- with only $350 billion? Which the taxpayer wont have to ante up?

Double the federal minimum wage which will shift about $350 billion (2 1/2 % of the cost of GDP output or 4% of personal income share) into the pockets of the 40% lowest wage Americans -- who would spend it not save it. ($500/wk -- today's 40 percentile wage! -- still not be enough to cover a realistic minimum needs budget for a family of two -- today's 40 percentile wage!).

2 1/2% is about how much GDP grows every couple of years. If everyone got their inflation raises but forwent their growth raises, a doubling of the minimum wage could pass almost unnoticed for half the country.

Doubling the minimum wage would only be the beginning of the larger overhaul of our underpaying labor market. Re-institute fair and balanced bargaining power via sector-wide labor agreements. Only sector-wide collective bargaining has the potential to eventually shift the other 11% of income share lost by the bottom 90% of earners (15% altogether) to the top 3% over the past three and a half decades.

Takes years to raise the minimum wage (three years?; $1 every 6 months?)? Would take time to convert our labor market to even the French-Canadian "lite" version of sector-wide (in French-Canada non-union firms merely accept terms worked out by non-union firms)? Once 90% of the workforce are assured they are in for (continuous) raises, in proportion to their propensity to spend, IOW in proportion to how unnecessarily (working) poor they are now, everyone's wallets will open up again.

Posted by: Denis Drew | Link to comment | November 28, 2008 at 06:36 AM

Free upgrade to plug-in hybrid? 10X power in 5 years? $500 lithium ion auto battery?

Free upgrade to plug-in hybrid?

Reported by Tom Krishner, AP Auto Writer Monday, July 21, 2008: ..."lithium-ion battery packs needed to power even a small car now cost in excess of $10,000..."

A couple of years ago, I came up with the fun dollar-savings equation that: if America needed only half as much imported oil (meaning 5 million bbl/day then) and if we needed to pay only half the price ($30/bbl then) due to said lowered demand, then, we could save $165 billion a year (by spending only 5,000,000 bbl/day X 365 days X $30 instead of 10,000,000 bbl/day X 365 days X $60 = a saving of $164,250,000,000/year)...

...or, exactly enough to subsidize building the 16.5 million cars and trucks we manufacture every year as LITHIUM, PLUG-IN hybrids -- at $10,000 per vehicle!

Now, with oil recently approaching the $150/bbl range, we could be shipping $500 billion more a year overseas; potentially justifying any form of subsidy for the manufacture of lithium plug-in hybrids.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/07/21/financial/f184312D31.DTL&type=autos

******************

10X power in 5 years?

For 30 years it has been known that building lithium ion batteries with silicon wires (instead of carbon wires) could yield ten times the power holding ability but, because silicon wires expanded and contracted too much as they cycled, they quickly destroyed themselves. The development of silicon nano wires – about a thousandth of the width of a sheet of paper -- has solved that drawback -- while potentially making lithium ion batteries more stable (safer) at the same time!

Near term, only the anode side of the batteries will be manufactured with nano wires, yielding the quadruple jump (up powering GM’s Volt to go 160 miles on one charge instead of 40?). Long term, manufacturing the cathode side with silicon nano wires is expected to reach the ten multiple target (introducing hybrid, long distant trucks?).

http://news-service.stanford.edu/news/2008/january9/nanowire-010908.html

*************************

$500 lithium ion auto battery?

PS. If a 10X power battery is developed (take 5 years according to the developer) would that mean that you could choose a 40 mile range battery at 1/10th the price? It is worth looking into. A Wikipedia article states that a 10X power battery would cost the same or less per watt hour, but the Stanford article did not suggest that a 20 hour notebook battery would cost an arm and a leg. If watt hour price drops with the power increase and higher mass production advantages reduce costs it is conceivable you could choose a 40 hour battery for $500 in the not too distant future.

This may not help GM with the original price but could cut replacement battery price to a pittance (cheaper than all those tune ups) -- cut some weight too.

http://en.wikipedia.org/wiki/Nanowire_battery

Will we bail out GM's creditors instead?

Hey; wait a minute. If GM goes belly up the fed gov will have to bail out the banks GM owed money to. Is the taxpayer going to loan the same money anyway with the "extra step" of GM going out of business in between? Anybody?

My lastest "punchline" on imposing sector-wide on Honda and BMW

If Honda and BMW supposedly can make better cars then Detroit, they they can indisputably pay the same wages and benefits as Detroit and still make a good living.

Guarantee GM repays -- mandate Honda and BMW pay their southern workers Detroit wages

If Honda and BMW truly make better cars and trucks then they can indisputably compete paying the same labor costs as out Big 3. Upshot: legislate sector-wide labor agreements that require folks doing the same job to get paid the same even for different firms -- save the Big 3 on the cheap; legislate a level playing field. Go with the "lite" French and French Canadian version that only requires nonunion firms to work under contract conditions negotiated with union firms. Save the Big 3 by doing what we should have done in the first place -- what most modern economies have done long ago in some form: mandate sector wide labor agreements

Japan of course goes to the most brazen extremes to bar even mild competition from within her borders. Japan makes a deal to allow American cell phone service in -- Japan splits in two and American service is confined to hill country with no population while Japanese service takes the urban. Japan agrees to buy more American beef -- Japan buys American ranches to sell beef to itself. As a cab driver my Japanese riders from the airports without exception went to Japanese chain hotels. Japan even carries on the charade of being unable to expand Tokyo airport for decades now because of the crazy carrying on opposition of a few local farmers -- conveniently limiting foreign travel of domestic Yen.

Can't imagine Japan or German or Italy allowing American auto manufacturing to undercut and put their whole industry out of business the way Wal-Mart undercuts the opposition: by paying employees much less (Wal-Mart closed 88 big boxes in the German land of same pay and benefits for same job descriptions -- as are the majority of first world lands). Why is the American intelligentsia the only people in the world who blithely acquiesce in the loss of their flagship industries -- to sever wage undercutting yet -- is this their version of American exceptionalism (I know they wouldn't like to think that).

LINKS -- 11/22/08

http://www.guardian.co.uk/commentisfree/2008/nov/21/automotive-usa

The perfect detailing of how killing off the Big Three would lead to the "perfect storm." -- from Thomas Palley

More on what bargaining power imbalace produces in the US labor market

More of what's wrong with the virtually unprotected by modern (sector-wide labor agreements) third, second and first world standards American labor market:

Last year Wall Street handed out $34 billion dollars* in bonuses to their (losing) gamblers: $180,000 apiece to 180,000 gamblers -- on top of their $120,000 average gambler salaries. This year it will go down to $26 billion**!

GM has what, 266,000*** hard working assembly line employees? Earning what? Big deal!

* http://money.cnn.com/2008/11/04/news/companies/wall_street_bonuses/index.htm

** http://www.bloggingstocks.com/tag/FinanancialCrisis/

*** http://www.hoovers.com/general-motors/--ID__10640--/free-co-factsheet.xhtml

What's wrong with GM is what's wrong with the American LABOR MARKET II

What's wrong with GM is what's wrong with the American labor market. We allow other nations to come here and build factories to pay our workers less than they pay their own workers (e.g., German) and less than our domestic brands pay theirs. On top of that our "primitive" private health and pension insurance piles legacy costs on top of whoever came first, making permanent advantage for Johnny come latelys.

The ULTIMATE answer (my ultimate answer for everything) is instituting sector-wide labor agreements here, wherein (just like Germany, Italy, France, etc.) people doing the same job in the same locale (which can be the whole USA for nationwide industries) BY LAW work under a single collectively bargained contract for multiple employers.

Don't do that and those who say the bridge loan could be a bridge to nowhere could ultimately be right -- not necessarily; but could be. (The coming easy to engineer, perfectly reliable, 100 mpg electric technology gives auto manufacturing a more promising future.)

Want to understand the "economics" of the free labor market -- took me 7-8 years of digging to figure it all out. Understand what a last lot situation is like? That's when you are buying up lots for a project and one seller holds out on that indispensable last lot.

Tishman in NYC a couple of decades ago wanted to build a skyscraper but one guy with a little four story taxpayer held out for $250,000 against Tishman's offer of $100,000. Finally Tishman gave in but the seller then decided he wanted $500,000. At long last Tishman gave in to that only to have the seller jump his demand to $1,000,000, at which point Tishman told him to stuff it and built around him.

Take the last lot effect and multiply it by billions -- of employees that is -- and you have the working model of the labor market since the beginning of industrialization. As long as employers need someone to work but not you in particular, the employer is the last lot seller. Even if there are many employers to choose from, as long as there are many times more employees, it usually works this way.

If you have proper unionization (sector-wide in today's race to the bottom climate) or the highest practicable minimum wage then the employer needs you in particular and you are both last lot sellers and you can come to a fair and balanced agreement that will give labor as high a price as its utility can justify. This is the whole law and the prophets about the free labor market.

What's wrong with GM is what's wrong with the American LABOR MARKET

Try to move American auto factories in on other First World countries -- w/o legacy costs, paying less than their factories pay assembly line workers. In Germany, France, Italy, etc. you will not be able to pay less than others pay doing the same job BY LAW -- and no legacy costs because health and retirement are all government. Ditto for Korea.

Wal-Mart just closed 88 big boxes in Germany after its business plan did not work paying their employees the same as competitors.

For all practical purposes, you cannot build significant competitive anything inside Japan no matter how much you pay -- least of all undercutting domestic wages and benefits. But Japan jumps into our domestic market to destroy our industries.

Do foreign managements and engineers sometimes do a better job. Maybe that's because our best were manufacturing SR-71s (Kelly's Skunk Works) or now useless space stations while the nations we protected during the Cold War were able to concentrate on domestic appliances.

In any case we are on the verge of an era in which cars are virtually as easy to design and build as your kid's toy racing: easy to build -- but as reliable as jet engines to run -- electric motor and battery, no tricky transmission (goodbye 6 speed electric), plus a little one speed (rpm) generator engine...
...that should yield 100 mpg.

Lithium ion batteries should in a few years be capable of holding, first, 4 times today's (40 mile) charge and, eventually, 10 times -- unbeknownst to a certain Republican presidential candidate who wanted to post a reward of $300 million for a more powerful battery.

Allowing Japanese manufacturers to at long last succeed in gutting their domestic American competition would be snatching defeat from the jaws of long sought engineering victory.

http://news-service.stanford.edu/news/2008/january9/nanowire-010908.htm

Now Not the Time to strip GM's Management Either

Now is not the time to strip GM's managment, either -- not when the company is finally being run by an engineer, Japanese style (a Boeing guy) instead of a salesman; not just when said engineer is directing GM through a giant leap forward to simple, almost foolproof, 100 mpg electric drive-hybrids.

The Big 3 re-invented themselves once before -- remember the first oil crises of the late 70s. More digital (electric) and less analog (gas) technology make the engineering more a matter of chalking equations on a blackboard then endlessly dueling with mother nature's whims.

As for all the bellyaching about high Big 3 labor costs: just when America should (hopefully) be stepping back from the homegrown race to the bottom as well as the downward pressure on wages from both (!) foreign born workers at home (at levels unique in all the OECD) as well as abroad -- via legislation that puts strong supports under the price of American labor (hopefully doubling the minimum wage to half the "true" average wage and hopefully mandating a version of sector-wide labor agreements) -- is not the time to be crushing the auto industry's gold standard of wages and (just imagine!) benefits.

Our blue collar workers right now seem to be caught between the red, white and blue conservatives who don't happen to care what happens to working Americans and supposed progressives who don't seem to care at all about the survival of the red, white and blue's flagship industries. Hopefully whoever is left will have enough sense to care about both; hopefully they make up the majority.

Exactly the Wrong Moment to Abandon the Big Three

Luckily, IMHO anyway, the Big Three catching up to the 21st century should be -- relatively -- easy. Abandoning gasoline driven wheels and the accompanying multi-speed transmission for an almost overly simple electric motor, a simple one speed gasoline generator, and no transmission at all is such a jump in the simplifying direction that new auto start-ups abound. Almost makes you wonder if someday boutique auto manufacturers will be able to challenge the auto giants the way PCs challenged mainframes.

Point being this is not the time to quit; not when the "perfect" technology is just over the next hill -- and -- it's almost foolproof!

LINK -- 11/14/08

Link to comment

An interesting reader's comment from Economist's View which to me supports the future viability of the big three for the ironic rationale that electric technology is simpler -- electricity design being sort of digital, you can do it on a blackboard, right; chemical tech being analog, more subject to nature's eccentricities, right?

What's good for GM is very good for the county

If the $25 billion loan goes to retooling to build almost fuel-free cars like the Volt, the savings on foreign oil purchases alone could pay back many multiples of the principle -- ever year! -- leaving T. Boone Pickens' program for freedom from foreign oil dependence in GM's dust.

Free upgrade to plug-in hybrid?

Reported by Tom Krishner, AP Auto Writer Monday, July 21, 2008: ..."lithium-ion battery packs needed to power even a small car now cost in excess of $10,000..."

A couple of years ago, I came up with the fun dollar-savings equation that: if America needed only half as much imported oil (meaning 5 million bbl/day then) and if we needed to pay only half the price ($30/bbl then) due to said lowered demand, then, we could save $165 billion a year (by spending only 5,000,000 bbl/day X 365 days X $30 instead of 10,000,000 bbl/day X 365 days X $60 = a saving of $164,250,000,000/year)...

...or, exactly enough to subsidize buidling the 16.5 million cars and trucks we manufacture every year as LITHIUM, PLUG-IN hybrids -- at $10,000 per vehicle!

Now, with oil recently approaching the $150/bbl range, we could be shipping $500 billion more a year overseas; potentially justifying any form of subisidy for the manufacture of lithium plug-in hybrids.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/07/21/financial/f184312D31.DTL&type=autos
******************

For 30 years it has been known that building lithium ion batteries with silicon wires (instead of carbon wires) could yield ten times the power holding ability but, because silicon wires expanded and contracted too much as they cycled, they quickly destroyed themselves. The development of silicon nano wires – about a thousandth of the width of a sheet of paper -- has solved that drawback -- while potentially making lithium ion batteries more stable (safer) at the same time!

Near term, only the anode side of the batteries will be manufactured with nano wires, yielding the quadruple jump (up powering GM’s Volt to go 160 miles on one charge instead of 40?). Long term, manufacturing the cathode side with silicon nano wires is expected to reach the ten multiple target (introducing hybrid, long distant trucks?).

http://news-service.stanford.edu/news/2008/january9/nanowire-010908.html

I hate to be a spoil sport, but...

I hate to be a spoil-sport, but, I fear the priorities in the new admin...
...will include Obama's minimum wage, a dollar below LBJ's, 1968, $10/hr, double the average income later; instead of half the "true" average income or $13/hr (LBJ and Ike really pushed it at two-thirds the true average; last year it was at one-sixth, this year one-quarter, Obama's plan is one-third, I would see it at half -- the "gov" average wage not comprehensive and grew only 20% as per capita income doubled)...
...will include a card check, labor law leftover from the 40s that some bright labor lawyer happened to notice or we apparently would not have anything to talk about; not the world wide (third, second and first worlds) answer to the race to the bottom: sector-wide labor agreements, the perfect answer to Wal-Mart.

If we could have foretold to folks of 1968 that 40 years hence the economy would be in recession -- and that, oh by the way, the minimum wage of 1968 would become the 25 percentile 2008 wage -- the folks of 1968 would have forgotten to yawn over the current recession while throwing a fit at the seemingly impossible prediction of a "great wage depression." What could they possibly have guessed would be the cause: civil war, multiple depressions or even plagues?

But try to tell our progressive elites to focus on what should have been this impossible economic history -- on what should be taken as today's most extreme if never ending (boring?) economic emergency. Maybe if their affluent next-door neighbors were reduced to less than $150,000/yr, maybe then they would achieve all-out focus on the wage depression that exists for MOST of our workforce and maybe then they would be willing to take some "risks" to -- quickly! -- do something about it, like doubling the minimum wage in a hurry (causing only direct 3% inflation) and importing the answer to the race to the bottom used all over the globe, legally mandated sector-wide labor agreements.

Our progressive super economists can perform 20X the volume of academic labor that I am capable of in one day, but they somehow cannot keep 2 things in mind at the same time: this years financial mess and the endless wage depression.

******

http://hnn.us/articles/55614.html...

...at which history professor James Livingston explains simply that if business squeezes too much money out of labor, then, demand drops and business has no healthy place to invest its excess profits (plant and equipment) and heads out in search speculative paper which the only alternative (dot.com start ups with no realistic business model, risky real estate): leading us from bubble to bubble.

http://hnn.us/articles/55368.html...

...at which Livingston saith:

"By 1937, industrial output and national income had regained the levels of 1929, and the volume of new auto sales exceeded that of 1929." "That rising demand was a result of net contributions to consumers’ expenditures out of federal deficits, and of new collective bargaining agreements, not the eradication of unemployment."