Relevant and even prescient commentary on news, politics and the economy.

85, 662 average ytd or 38% increase for Angry Bear

by rdan

Angry Bear for the year to date (seven months) has averaged about 85,662 visits a month or about a 38% increase in visits from last year. Congratulations Angry Bears and readers of all persuasions.

If you like mostly what you read or contribute, and it surely is for varied reasons due to our multiple posters, guest posts and lifted comments, pass the Angry Bear to another person who might like to read, comment, or post on this blog as well.


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The real market incentives

by rdan

Suppose I paid you for every pound of pollution you generated and punished you for every pound you reduced. You would probably spend most of your time trying to figure out how to generate more pollution. And suppose that if you generated enough pollution, I had to pay you to build a new plant, no matter what the cost, and no matter how much cheaper it might be to not pollute in the first place.
Well, that’s pretty much how we have run the U.S. electric grid for nearly a century. The more electricity a utility sells, the more money it makes. If it’s able to boost electricity demand enough, the utility is allowed to build a new power plant with a guaranteed profit. The only way a typical utility can lose money is if demand drops. So the last thing most utilities want to do is seriously push strategies that save energy, strategies that do not pollute in the first place.

A new study, McKinsey proposes some projections on how an energy plan could reduce CO2 emissions significantly. It has some neat graphs which I could not transfer to here. It proposes that change might not be as expensive as some proclaim.

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Open trade

by rdan

I have noticed the term “open trade” being used by several notables on their blogs. What does it mean?

There is a great reluctance to simply use the term trade, or trade agreement. I assume this is because a shorthand worked better for publication. How is this different from “free trade” or “fair trade”, and what is the purpose?

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The Low Road Express and the Race Card

An interesting compilation of how disgusting Team McCain has become can be found here:

These days John McCain doesn’t seem to stand for anything but negative attacks and false charges against Barack Obama.

And there is this race card nonsense:

The presumptive Republican nominee has embarked on a bare-knuckled barrage of negative advertising aimed at belittling Mr. Obama. The most recent ad compares the presumptive Democratic nominee for president to Britney Spears and Paris Hilton — suggesting to voters that he’s nothing more than a bubble-headed, publicity-seeking celebrity. The ad gave us an uneasy feeling that the McCain campaign was starting up the same sort of racially tinged attack on Mr. Obama that Republican operatives, some of whom work for Mr. McCain now, ran against Harold Ford, a black candidate for Senate in Tennessee in 2006. That assault, too, began with videos juxtaposing Mr. Ford with young, white women. Mr. Obama called Mr. McCain on the ploy, saying, quite rightly, that the Republicans are trying to scare voters by pointing out that he “doesn’t look like all those other Presidents on those dollar bills.’’ But Rick Davis, Mr. McCain’s campaign manager, had a snappy answer. “Barack Obama has played the race card, and he played it from the bottom of the deck,” he said. “It’s divisive, negative, shameful and wrong.’’ The retort was, we must say, not only contemptible, but shrewd. It puts the sin for the racial attack not on those who made it, but on the victim of the attack. It also — and we wish this were coincidence, but we doubt it — conjurs up another loaded racial image. The phrase dealing the race card “from the bottom of the deck” entered the national lexicon during the O.J. Simpson saga. Robert Shapiro, one of Mr. Simpson’s lawyers, famously declared of himself, Johnny Cochran and the rest of the Simpson defense team, “Not only did we play the race card, we dealt it from the bottom of the deck.” It’s ugly stuff. How about we leave Britney, Paris, and O.J. out of this — and have a presidential campaign?

But, but, but – if Team McCain runs on the issues, they’ll lose. They know it so they have to take this one to the gutter.

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Return to Reagan Era

by reader ilsm

Whittle a Beak: Return to Reagan Era Warfare Waste

A cronie still in the acquisition business related that the DoD has gone back to using fixed price development contracts.

In 1991, the Congress passed a law requiring DoD to use cost plus development contracts with its warfare welfare partners. This was required because during the Reagan warfare state raid on the treasury DoD would contract for weapon system development using fixed price contracts. An aberration occured in the fairly big Navy A-12 fighter program where a fixed price development by Mc Donald Douglass (now a subidiary of Beoing) was terminated for convenience when a defense department civilian blew the whistle before the Navy could write a new contract to redo the profitable but shoddy work.

Here is a link to an article about the law passed before the congress went over to the democrats in 2007:
The following is misleading:

“They’re trying to drive a lot more development into the fixed-price arena, and that’s problematical,” Heinemeier said. He said the measure shifts the risk of such projects disproportionately to the contractor, hurting its ability to take on development projects, especially when they involve leading-edge technologies.”

As exercised, management of development contracts in fixed price did not put the risks on the contractors. In fact during the Reagan era huge profits were made on development contracts which similar profits could not be achieved in safer for industry cost plus contracts.

The way it worked: The A-12 contractor received a fixed price contract to design the A-12, too heavy, stealth fighter for unnneeded fleet aircraft carriers. The contractor had planed to make a lot of money by delivering a bad performance and get a new contract to do the work over. Fixed price means if the contractor don’t expend the costs they still get paid the agreed price and make a lot of margin.
But, some dedicated civil servant blew the whistle, Dick Cheney as Secretary of Defense terminated the effort and now the litigation continues as the DoD tries to get its money back.

In 1991 congress required development and engineering efforts be done under cost plus contracts. As the quote above notes the government assumes all the risk in cost plus, but the contractors do not get much profit since for the contractor there is no risk. So, unlike A-12, the contractors can redo the shoddy design in cost plus forever but not make any real money.

On the way out the door the republicans changed all this. Now it is back to bad work being compensated with excellent margins, to be redone at good margin.

Back to very profitable whittling beaks like they enjoyed with Reagan……………………………

This one by ilsm

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