Archive for June, 2022

More reasons that government is ambivalent about inflation…

June 30, 2022

Bottom line: All levels of government benefit from inflation.
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Recently, Biden raised eyebrows when he blurted that we’re in an “incredible transition” away from fossil fuels … and inflated gas prices are the price to be paid.

I’m surprised that so many folks are surprised that Biden thinks high gas prices are good … and that his claim of “all things being done” to arrest further gas price spikes is just window dressing.

In a prior post, we spotlighted the world’s worst kept secret, revealed publicly by Biden’s press secretary

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English translation: “If high gas prices bother you, get on our climate control program and buy an electric car.”

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OK, that’s one reason that Biden’s people are ambivalent or maybe even enthusiastically supportive of skyrocketing gas prices.

And, there are other reasons that all levels of government — local, state and Federal — have some degree of ambivalence (or enthusiasm).

As the WSJ puts it:

One irony of inflation is that while it’s bad for working Americans, it’s great for the government.

Tax revenues soar as nominal profits and incomes rise.

“Overall state and local government receipts including federal aid are already 23% above pre-pandemic levels … thanks to Congress’s gusher of spending.”

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How does that happen?

Let me count the ways…

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At the Federal level:

(1) inflation devalues the national debt

(2) higher nominal wages push some tax filers into higher Federal tax brackets

(3) increasing asset prices boost capital gains and push some tax filers into higher Federal income  tax brackets

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At the State level:

(1) higher wages and capital gains push some tax filers into higher state income tax brackets

(2) higher retail prices increase state sales tax revenues … assuming that consumers continue to buy the same “real” volume of goods.

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At the Local level:

(1) higher wages and capital gains push some tax filers into higher local income tax brackets

(2) higher retail prices potentially increase local sales tax revenues

(3) higher real estate prices push real estate assessment values higher and boost local real estate tax collections.

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And, there’s a blue state slant to all of this:

The WSJ observes:

Progressive states with higher tax rates are especially flush (with tax revenues).

Democratic states in particular are building in new structural spending in the form of higher pay and pensions for public unions.

As Jen Psaki might say if she were still frequenting the podium: “suck it up”.

What’s the fundamental difference between oil prices and electricity rates?

June 29, 2022

Hint: Who (or what) sets the prices?
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This week, the G7 leaders reached “an agreement in principle to begin the process of imposing price caps on Russian oil.”

The agreement on oil, would aim to limit how much money Russia can earn from each barrel of oil it sells on the global market, reducing the fossil fuel revenues Russia is relying on to finance its war effort.

It would also attempt to stabilize global oil markets — and hopefully bring down prices.

It remains unclear how caps would work, and there is more speculation than specifics. NY Times

Hmm.

Coupled with my recent digging on EVs, the G-7 agreement lit my light bulb, so to speak.

I asked myself: “What’s the fundamental difference between oil prices and electricity rates?”

Well, oil prices are set “by the market” … largely driven by supply and demand … subject to some governmental supply policies (e.g. OPEC supply agreements and capped pipelines) … and short-lived price controls (that invariably backfire).

Electricity rates (i.e. “prices) are controlled by state regulatory agencies… electric companies submit pricing plans that must be approved by government bureaucrats.

Hmm

So, under the umbrella of climate control — less oil, more electricity — governments intend to wrest near total control of energy prices away from “the market”.

Is that a good idea?

The economist side of me says: “Nope”.

I’m surprised that pundits haven’t explored this “wrinkle” in Biden’s “incredible transition” plan.

An unintended second-order consequence or part of the plan.

Draw your own conclusion.

Update: What if Oprah gave all of us EVs?

June 27, 2022

Would the electric companies be able to supply the increased load?

Note: While at the beach last week, I got some helpful input from loyal readers and trusted sources which I’ve tried to incorporate into the original post.

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In a prior post we ran some back-of-the-envelope numbers on EV ownership.

The conclusion: With $5 per gallon gas and 14¢ per kWh electricity, a shiny new EV would practically pay for itself … albeit taking 20 years to break even.

Key assumptions: (1) A typical EV with a 50 mWh battery has a range of about 250 miles (2) All electricity drawn for charging is stored in the battery (i.e. charging efficiency is 100%)

Caveats: (1) Doesn’t consider the cost of an in home charging station (for faster charges) which would lengthen the breakeven time frame (2) Doesn’t consider differences in lifetime maintenance costs which likely favors EVs and would lower the breakeven time frame 

Let’s assume that life expectancy (for you and for an EV) is generally longer than the breakeven time frame … and ask a broader question:

If there were a groundswell of EV demand, would electric companies be able to generate enough electricity to keep the EVs charged (and the rest of our electricity-based lives operating “normally’}?

Suppose, for example, that Oprah gave all of us an EV today.

How much electricity demand would be added on to the U.S. electrical grid?

Again, let’s run some more back-of-the-envelope numbers…

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  • According to the U.S. Energy Information Administration (whatever the heck that is): In 2020, the average annual electricity consumption for a U.S. residential utility customer was 10,715 kilowatthours (kWh)

For reference: My home’s annual electricity consumption runs about 27,500 kWh

Before you accuse me of being an energy glutton, consider…

The Tennessee Center for Policy Research estimates that Al Gore (former VP and current Climate Control Advocate) has a 20-room home that “devours” nearly 221,000 kWh annually … that’s about 20 times the national average … and about 10 times my home’s usage 

  • There are about 125 million households in the U.S.  We’ll assume that each household is a “residential utility customer”.
  • That makes total residential electrical consumption about 1.34 trillion kWh (10,715 kWh x 125 million)

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  • According to Federal Highway data reported by Metromile, in 2019, “there were almost 229 million Americans who have driving licenses, and they collectively drove over 3.2 trillion miles.”

Note: I’ve seen estimates that range all the way up to 7.5 trillion miles.  To give EVs every benefit of the doubt, we’ll use the low number

  • Again, from what I can ascertain, a Tesla gets about 5 miles per kWh of stored charge. (e.g. a T3, 50 kwh battery gets 250 miles of range).
  • So, 3.2 trillion miles of driving requires 640 billion kWh of additional electricity.

Note: The above assumes that “filling” a battery is like filling a gas tank  — i.e. a gallon “flowing in” is a gallon “stored for use”.

This assumption probably understates the amount of electricity that is required to recharge a battery … maybe by a lot!

Bottom line: A full “incredible (fast) transition” to EVs would increase consumer / residential electricity demand in the U.S. by at least 50% (640 billion kWh / 1.34 trillion kWh)

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Key question: will the electric companies (and the country’s electrical grid) be able to meet the increased demand?

Keep in mind that:

  • In some (many?) parts of the country power plants are currently fueled by coal, gas and nuclear power — all of which are deemed taboo by climate control zealots.
  • Key components (or full units) of solar panels and windmills are sourced from China … and neither modality has been proven to generate a dependable flow of energy “at scale”.
  • Some parts of the country have a history of electrical outages — e.g. unplanned weather outages and rolling blackouts.

But, a trusted source reminded me that the electrical companies — while sometimes stressed during peak daytime hours — have substantial unused capacity during nighttime hours.

That unused capacity can be tapped by “demand management” that nudges EV owners to charge their batteries overnight instead of during the day.

Note: I’m trying to track down hard data re: U.S. electricity generation capacity.  Any ideas re: sources?

For example, nighttime electricity rates (i.e. prices) are generally lower than daytime rates … and that differential can be widened to coax overnight EV charging.

That’s true, but overnight charging at home — even with nighttime rate discounts — isn’t exactly a gimme.

  • For example, many urban car owners park overnight on the street where there’s no access to a personal (or public) electrical outlet.
  • Other drivers park in driveways and would need to run extension cords from house outlets to their cars.  Good idea?
  • And, charging via a standard 110/120 outlets is a slow process … adding only a few miles of range from an overnight charge.
  • To up the charging speed requires 220/240 service and a fast-charging station … which adds to the initial EV “investment”.

So, leveraging unused nighttime electrical capacity may be a partial solution, it doesn’t close the supply-demand gap that EVs are virtually certain to create.

How’s that gap going to be closed?

I’d sure like to see the plan…

 

 

 

Beach Week …

June 20, 2022

Taking a stress-reduction break … back next week.

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Bethany Beach, Delaware

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What if Oprah gave all of us EVs?

June 18, 2022

Would the electric companies be able to supply the increased load?

Short answer: Nope.
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In a prior post, we ran some back-of-the-envelope numbers on EV ownership.

The conclusion: With  $5 per gallon gas and 14¢ per kWh electricity, a shiny new EV would practically pay for itself … albeit taking 20 years to break even.

Let’s assume that life expectancy (for you and for an EV) is longer than 20 years … and ask another question:

If there were a groundswell of EV demand, would electric companies be able to generate enough electricity to keep the EVs charged (and the rest of our electricity-based lives operating “normally’}?

Suppose that Oprah gave all of us an EV today.

How much electricity demand would be added on to the system?

Let’s run some more back-of-the-envelope numbers…

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  • According to the U.S. Energy Information Administration (whatever the heck that is): In 2020, the average annual electricity consumption for a U.S. residential utility customer was 10,715 kilowatthours (kWh)

  • There are about 125 million households in the U.S.  We’ll assume that each household is a “residence”.
  • That makes total residential electrical consumption about 1.34 trillion kWh

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  • According to Federal Highway data reported by Metromile, in 2019, “there were almost 229 million Americans who have driving licenses, and they collectively drove over 3.2 trillion miles.”

Note: I’ve seen estimates that range all the way up to 7.5 trillion miles.  To give EVs every benefit of the doubt, we’ll use the low number

  • From what I can ascertain, a Tesla gets about 5 miles per kWh of stored charge. (e.g. a T3, 50 kwh battery gets 250 miles of range).
  • So, 3.2 trillion miles of driving requires 640 million kWh of additional electricity.

Note: The above assumes that “filling” a battery is like filling a gas tank  — i.e. a gallon “flowing in” is a gallon “stored for use”.

This assumption probably understates the amount of electricity that is required to recharge a battery … maybe by a lot!

Bottom line: A full “incredible (fast) transition” to EVs would require at least a 50% increase in electricity generation for consumer / residential use (640 kWh / 1.34 trillion kWh)

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And, where may I ask, will all of this additional electricity come from, given that power plants are fueled by coal, gas and nuclear power — all of which are deemed taboo by climate control zealots.

Solar panels and windmills sourced from China?

Sorry, but I’m betting the under on those.

So, how we gonna do it, Joe?

Looks like there may be some holes in the U.S. energy plan

There is a plan, right?

 

What if Oprah gave me an EV?

June 17, 2022

How much would my electrical demand increase?
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In a prior post, I worked through numbers that explain why my electric utility company sent me an email alert of “ABNORMAL USAGE” … followed by an insinuating alert asking me: DO YOUR DRIVE AN EV?’

The post’s numbers show how EV-charging likely triggered the “unusual usage alert” … and a subsequent series of EV charges led the electric company to infer (incorrectly) that I was on the EV bandwagon.

The email alerts got me wondering…

I asked myself: How much more electricity would I use if Oprah gave me an EV and I ditched my gas-sipping SUV?

Let’s work the numbers…

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  • Like an average American, I drive about 13,500 miles each year Source
  • From what I can ascertain, a Tesla gets about 5 miles per kWh of stored electricity. (e.g. a T3, 50 kwh battery gets 250 miles of range)
  • So, my lowball annual charging consumption would be at least 2,700 kWh … some at home, some at charging stations

Note: The above assumes that “filling” a battery is like filling a gas tank  — i.e. a gallon “flowed” is a gallon “stored”.

This assumption probably understates the amount of electricity that is required to recharge a battery … maybe by a lot!

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For simplicity, let’s assume that I do all of the charging at home…

  • Our home’s annual electricity consumption runs about 27,500 kWh

Note: According to the U.S. Energy Information Administration: In 2020, the average annual electricity consumption for a U.S. residential utility customer was 10,715 kilowatthours (kWh).

Before you accuse me of being an energy glutton, consider…

The Tennessee Center for Policy Research estimates that Al Gore (former VP and current Climate Control Advocate)  has a 20-room home that “devours” nearly 221,000 kWh annually … that’s about 20 times the national average.

  • Again, I estimate that my annual charging consumption would be at least 2,700 kWh

  • That’s about 10% of my current TOTAL electricity usage.

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So, is a 10% increase in my electricity consumption a good thing or a bad thing?

Let’s monetize it…

  • In 2021, I was charged 11.5¢  per kWh
  • Currently I’m being charged 14¢ per kWh … a 20% increase over 2021 rates
  • So, my @home charging charge (<= I love the alliteration) would be about $400.
  • My Audi Q5 SUV gets about 25 MPH
  • So, driving 13,500 miles annually requires about 540 gallons of gas.
  • At Biden’s induced $5 per gallon, that’s a whopping $2,700 annually.
  • The electrifying cost benefit of my hypothetical EV: $2,300.

Of course, the savings depend on $5 (or higher) gas prices and 14¢ (or lower)electricity.

My hunch: Gas prices fall like a rock when Biden is sent packing in 2024 … and electricity prices will keep going up since the industry is already at capacity (think: rolling blackouts) with demand rising

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Of course, Oprah’s not giving me an EV, so I’d have to buy one to get the savings.

Tesla T3’s go for about $50,000.

With $2,300 a year in cost savings, it would practically pay for itself. … albeit taking 20 years to break even.

Unfortunately, that’s a bit longer than my actuarial life expectancy, so I think I’ll hold off buying one.

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Of course, there’s even more to the story.

The above is an incremental analysis that only adds one user (me) to the electrical grid.

Surely, BGE could accommodate that small increase.

But, what if there was a veritable groundswell towards EVs?

We’ll tackle that question next, by asking “What if Opah gave everybody an EV?”

Stay tuned…

More:“KENNETH HOMA, do you drive an EV?”

June 16, 2022

Let’s dig into the numbers…
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Earlier this week, I posted that I had gotten two “alert” emails from BGE, my electric company.

The first email was a “NOTICE OF UNUSUAL ACTIVITY” …euphemistically asking  “what the hell is going on at your house?”

I reported that my son had charged his new Tesla overnight, and that probably triggered the alert.

The second email was more direct: “DO YOU OWN AN EV?” It showcased a chart that my energy efficiency had dropped from the borderline of “good” and “great” … all the way down to “fair”

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Again, I pointed a finger at my son’s periodic Tesla charging.

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Well, a couple of loyal readers politely challenged my inferences and doubted that EV-charging was the impetus for BGE’s email alerts.

So, I retrieved some numbers and did some back-of-the-envelop number crunching.

Let’s work through the numbers…

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  • According to the U.S. Energy Information Administration: In 2020, the average annual electricity consumption for a U.S. residential utility customer was 10,715 kilowatthours (kWh).
  • Our home’s annual electricity consumption runs about 27,500 kWh …  which averages out to about 75 kWh per day.
  • When my son charges  at my house, it’s for about 8 hours, drawing about 40 kWh … about 5 kWh per hour of charging
  • So, based on an average day’s electricity consumption at my house, that’s a 50% spike in electricity consumed (40 /75 = 53%).

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  • For reference, our biggest electrical draw is the HVAC that services our upper 2 levels (which get hottest in the summer and coldest in the winter)… with a smart thermostat that capture usage data.
  • Our upper level HVAC uses 5,300 kWh per year … about 20% of our total consumption … about 15 kwh on an average dayon hot days (high 80s and 90s) it spikes about 50% to 22 kWh
  • When BGE sees that spike, they know it’s a hot weather-related  event
  • When I got a 40 kWh Tesla charging spike on an average day, BGE red flagged me … since it was out of pattern … and sent the “unusual activity” alert.
  • When the spike happened a few times, BGE apparently concluded that I must have bought an EV which I’m charging from one of my home’s 110 circuits … and warned that I should brace for higher bills.

Bottom line: BGE drew reasonable analytical conclusions at the first spike … and after noticing a couple of spikes.

But, to answer their question : “No, I don’t drive an EV … I don’t own a EV … but, occasionally, an EV sleeps overs at my house.”

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BGE’s question and my readers’ nudges really started me thinking about EVs.

For openers, I asked myself: “What if I did own an EV.  How much more electricity would I consume?”

That’s next up…

How low can the stock market go?

June 15, 2022

We don’t give investment advice, but …

Just before the 2020 election, we posted a JP Morgan’s stock market forecast.

At the time, JPM advised clients that the S&P could nosedive to 2,500 (down 25% from its level at the time) if there was a “Blue Wave” with Biden getting elected and Dems taking both the Senate and the house. See the bottom right quadrant of the below matrix.

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At about the same time, a B of A analysis concluded that a Blue Wave would be good for the market.

The post-lockdown surge in stock prices made B of A look like savant seers … and JPM’s forecast look downright silly.

Now, it’s looking like JPM had the fundamentals right … but were ahead of the curve.

Draw your own conclusion.

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P.S. A 25% drop from the 3,850 S&P peak would put the S&P at about 2,900.

Fasten your seatbelts.

How to double the time it takes to take a car trip…

June 14, 2022

Simple: Buy an EV and download a charger-finder app.
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Last year, my wife and son took their annual weekend trip to Cleveland to visit some relatives and go to an Indians’ (err, Guardians’) baseball game.

In prior years, the trip from DC to Cleveland took under 6 hours.

Last year it was over 10.

What changed?

Her gas-efficient Audi A4 was left in the garage.

His Tesla hit the road … and  the hunt for EV chargers started.

Apparently, their experience is neither unique nor time-obsoleted.

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A recent WSJ article chronicled a writer’s EV travel from New Orleans to Chicago and back in a shiny new EV.

The Goal: Roundtrip from New Orleans to Chicago and back (2,000 miles) in 4 “leisurely” days.

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The plan:

Given our battery range of up to 310 miles, I plotted a meticulous route, splitting our days into four chunks of roughly 7½-hours each.

We’d need to charge once or twice each day and plug in near our hotel overnight.

While we’d be fine overnight, we required fast chargers during the days.

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Charging Stops – The Dream 

Fast chargers tend to be located in parking lots of suburban shopping malls, or tethered to gas stations or car dealerships.

ChargePoint — which manufactures and maintains many fast-charging stations — promises an 80% charge in 20 to 30 minutes.

That’s  longer than stopping for gas — but, on the bright side, “it’s good for a bite or bathroom break.”

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Charging Stops – The Reality

It turns out not all “fast chargers” live up to the name.

At our dealer’s fast-charging station, our dashboard tells us a full charge, from 18% to 100%, will take 3-plus hours.

Fastest charge: 25 minutes.

Longest “fast” charge : 3 hours

While there are already thousands of charging options between New Orleans and Chicago, most were are classified as Level 2, requiring up to 8 hours for a full charge.

And sometimes, charging stations are only open during business hours at, say, gas stations or car dealerships … or, may require an attendant to turn it on.

And sometimes, you get beat to an advertised “open” charging station by another driver — or get shocked by an unexpected “out of service” sign

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The Economics

Over four days, we spent $175 on charging.

We estimated the equivalent cost for gas  would have been $275.

That $100 savings cost us many hours in waiting time.

A gas-fueled 2-day trip can be EVed in 4 days, with some white-knuckle situations along the way.

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The Urban Divide

This was a surprise to me…

The car’s highway range actually was worse than its range in cities.

Indeed, highway driving doesn’t benefit as much from the car’s regenerative-braking technology which uses energy generated in slowing down to help a car recharge its battery

But, a battery’s charge can be stretched by using cruise control to  reduce inadvertent acceleration and deceleration … and by:

Turning off the car’s cooling system and the radio, unplugging phones and other devices and lowering the windshield wipers to the lowest possible setting while still being able to see in the rain.

In other words, shelve all of the car’s creature comforts.

Yipes!

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PS For added color, read the whole article:

I Rented an Electric Car for a Four-Day Road Trip. I Spent More Time Charging It Than I Did Sleeping.

Scroll down the article for an accompanying video The Electric Vehicle Road Test..

“KENNETH HOMA, do you drive an EV?”

June 13, 2022

That’s the subject line of an email I got from BGE – our electric company”
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I opened the email expecting either:

(a) a lecture that I will be personally responsible for high gas prices and the climate-induced end of the world because I drive a mid-sized SUV, or

(b) a congratulatory note profiling me (post-grad degree, blue state resident) as a likely Tesla owner.

Neither was the case.

It was an emergency alert that my electricity usage had spiked … and my relative efficiency had dropped from the “good-great” borderline, all the way down to the orange “fair” category.

“BGE is sending you this alert to let you know that you are using more energy than usual and may be trending towards a higher bill.”

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As the subject line indicated, they naturally assumed — since temps have been COOLER than average (i.e. relatively low A/C usage) — that the likely suspect for a drop that drastic had to be in-home EV charging.

Interesting, right?

Well, in fact, my Tesla-owning son had had been visiting and occasionally overnite charging the car’s battery.

Not a big deal once we ID’ed an outlet that wouldn’t trip a circuit breaker or dim the house lights.

Recollecting, I did get one “What the hell is going on at your house?” email from BGE … but, I didn’t connect the dots.

BGE’s EV email did that for me.

Interesting that BGE assumed that EV charging was a likely suspect of high energy use.

Hmm.

What does that suggest we’re in for this summer when temps finally rise above average and HVACs are running full-steam.

Blackout warnings are already being headlined.

Add EV charging to the mix, and Biden have his next “Putin’s fault, nothing I can do”  crisis.

That may be the straw that breaks the camel’s back re: Biden’s “incredible transition from fossil fuels”…

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PS Remember when red used to be the color assigned to the lowest performing category?  Now, to be politically correct, it’s orange

Hmm

Wonder how orange became synonymous with “bad”?

Think about it…

“My high school SRO’s nickname was Barney Fife”

June 9, 2022

What’s reasonable to expect from School Resource Officers?
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In a prior post  we asked the question: “So, would YOU have charged the Uvalde school shooter?”

I admitted that I probably wouldn’t have … and laid out 4 criteria that might have motivated me to act:

  1. A threatened family member, e.g. a grandkid
  2. Some probability greater than zero that the periled life would be saved
  3. Enough physical might and equipment to. conceptually, get the job done.
  4. A probability greater than zero that charging wouldn’t  simply be a futile suicide mission.

Draw your own conclusion as to whether those criteria are reasonable and compelling.

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I ended that post with WSJ, columnist Peggy Noonan’s opinion regarding the first police officers on site at Ulvade — namely, the SROs:

It was their job to go in.

If you can’t cut it, then don’t join and get the badge, the gun and the pension.

We can’t let it settle in that the police can’t be relied on to be physically braver than other people.

An implicit agreement in going into the profession is that you’re physically brave.

Let’s add some perspective to Noonan’s castigation….

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An armed SRO in every school?

There seems to be a consensus building that all school’s should have an armed law enforcer on site.

I’m OK with that but…

Keep in mind that are over 130,000 K-12 schools in the U.S. Source

  • Elementary schools: 87,498
  • Secondary schools: 26,727
  • Combined schools: 15,804

Assuming an average of $50,000 (per year, per SRO) in wages, benefits and equipment, that works out to about $6.5 billion annually.

But, it’s not about money, it’s about kids’ lives, so let’s push that number aside and move on.

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How to staff those 130,000+ positions?

Ideally, I personally would like to see a former Navy Seal, Army Ranger or Green Beret … well-armed (yes, with a so-called “assault rifle”) … standing (not sitting) at the single (locked) access door to my grandkids’ schools.

But, that’s not a reasonable expectation.

First, there aren’t enough of them to staff 130,000 schools

Second, even if there were, they wouldn’t take the job … it’s not in their DNA to hang out waiting for lightning to strike.

So, who do we get to fill the SRO positions?

Newbie or “pastured” police officers?  Retired military? Rent-a-cops?

As former Democratic Congressman Harold Ford, Jr. put it: “My high school SRO’s nickname was Barney Fife”

For younger readers, Barney Fife was a self-confident but inept police officer on the Andy Griffith Show.

He was on the police force in the rural, crime-free town of Mayberry RFD … and, for fear that he might hurt himself (or somebody else), he was only allowed to carry an unloaded gun with a single bullet tucked in his shirt pocket. Source

That’s a bit harsh, but realistically, probably more representative than, say, Rambo-clones.

SROs draw relatively small paychecks  … and, given the long odds of being confronted with a crazed active shooter, don’t really anticipate that they’ll need to put their lives on the line.

If they did, many wouldn’t want the job … and most would want higher pay.

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And, how will they be equipped?

Will SRO’s carry automatic weapons, wear body armor and have ready access gun fire shields?

My hunch is that many (most?) folks would understandably find that sort of personal protection equipment to be emotionally disturbing to the school students.

So, the SRO’s would have to make do with handguns and bullet-proof vests.

Not exactly a fair fight against a well-armed active shooter.

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Bottom line

All of the above not withstanding, I’m all for SROs in every school.

But, I think we need to constrain our expectations about what they’re able to do.

Going mano-a-mano to neutralize a crazed assault-gunner isn’t a realistic expectation, Ms. Noonan.

It’s not part of the “implicit agreement”.

Rather expect SROs to train teachers & students, red-flag (aka, “profile”) trouble-makers, keep the doors locked and call. for help if and when hell breaks.

That’s not all bad … and, in fact, can be a critical part of providing school security.

More on that in a subsequent post.

So, would YOU have charged the Uvalde school shooter?

June 8, 2022

Think hard before you answer the question.
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Last week in the WSJ, columnist Peggy Noonan opined:

I don’t understand those saying with nonjudgmental empathy, “I’m not sure I would have gone in.”

Hmm.

I understand that nonjudgmental empathy completely, Peggy.

I hate to say it, but I doubt that I would have run in.

For perspective, here are some things that I would do:

  • I’d donate a critical organ to one of my grandkids … even if the likelihood of my survival was far less than 50-50
  • I’d run in front of an oncoming bus to try to save an inattentive grandkid who wandered into harm’s way.

OK, so what makes those situations different than charging the Uvalde shooter?

  • First, they’re my grandkids … literal “skin in the game”
  • Second, there’s some likelihood that I might save the periled kid
  • Third, I think (maybe mistakenly) that I would be physically equipped to succeed.
  • Fourth, both “rescues” would be risky, but they’re not certain suicide missions.

Remove any of those 4 conditions and the likelihood of my intervening goes down.

Does that make me a coward … or a bad person?

Maybe, but I don’t think so.

Just shows that I’m human … and, reasonably rational, right?

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An Uvalde case example

For the record, there was one local law officer (who was not part of the official rescue team) who did run in with a shotgun to save his wife (a teacher) and his daughter (a student).

Run that case against my 4 personal criteria.

His immediate family was involved, his wife & daughter were not in the shooter-barricaded classroom, he was armed (albeit with only a shotgun), and he had law enforcement training.

He had his family’s “skin in the game”, there was a reasonable likelihood of success, and he had some training & equipment … so it wasn’t a certain suicide mission.

So, with this perspective, would you have gone into the school?

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BTW: Noonan dismisses my argument.

She’d argue that my criteria don’t apply to law enforcement officers since:

It was their job to go in.

If you can’t cut it, then don’t join and get the badge, the gun and the pension.

We can’t let it settle in that the police can’t be relied on to be physically braver than other people.

An implicit agreement in going into the profession is that you’re physically brave.

Whoa, Peggy.

In a subsequent post. I’ll offer an alternative point-of-view on the “implicit agreement” that Noonan asserts …

How many gun-related deaths in the U.S. last year?

June 7, 2022

And while we’re at it, how many Fentanyl-related deaths?
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With the understandable recent concern about gun-related deaths, I did some data digging.

For the record:

I consider each and every homicide to be a tragedy.

I have never owned a gun or shot a gun … and I have no plans to do either.

But, I do support Constitutional rights that are explicit in the Constitution.

Gotta follow “the science” and the data, right?

Pew — an unbiased source if there is one — has crunched the numbers, compiled mostly by the “scientists” at the CDC.

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The answer to the headline question:

In 2021 — according to the CDC — there were 45,222 firearms-related deaths in the U.S.

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The 45,222 is a much lower number than I expected … and drilling down further…

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Suicides – Homicides

According to Pew & the CDC, more than half of the 45,222 gun-related deaths were suicides (24,292) …  homicides totaled 19,384 – about 50 each day.

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There were 611 law enforcement-related gun deaths in 2021 (they’re lumped into the 3% “other” category).

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Mass murders.

The Gun Violence Archive, an online database of gun violence incidents in the U.S., defines mass shootings as incidents in which four or more people are shot, even if no one was killed (excluding the shooters).

Using this broad definition, 513 people died in these incidents in 2020.

Pew’s conclusion: The fatalities in mass shooting incidents in the U.S. account for a very small fraction  of all gun murders that occur nationwide each year.

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Firearms

According to FBI data analyzed by Pew. Handguns were the instrument of death in the vast majority of gun-related deaths.

“Rifles” – the category that includes guns sometimes referred to as “assault weapons” – were involved in 3% of firearm murders.

Note: Though Pew doesn’t draw a correlation, it’s probably not coincidental that the “rifle” numbers and the “mass murder” numbers are essentially the same.

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School Killings

According to James Alan Fox, a criminologist at Northeastern University who has been tracking these events for decades and helps keep the AP/USA Today/Northeastern Mass Killing database:

School massacres like the one in Uvalde are exceptionally rare events. They actually occurred more often in the 1990s than recently.Source

Prof. Fox notes that school shootings are undeniable tragedies, but that “the annual odds that an American child will die in a mass shooting at school are nearly 10 million to 1, about the odds of being killed by lightning or of dying in an earthquake.” Source

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Drug Overdose Deaths

For perspective, let’s draw a comparison…

According to WebMD – channeling the CDC:

U.S. deaths attributed to drug overdoses topped 100,000 last year for the first time.

Specifically, in 2021, drug overdose deaths increased 15% to 107,622 … more than double the number of gun-related deaths … and quadruple the number of gun-related homicides.

Fentanyl accounted for 71,238 deaths … almost 3 out of 4 drug overdose deaths

In 2022. with Fentanyl flowing freely across the southern border, it’s widely expected that Fentanyl-related deaths will soar.

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Something seems out of whack, doesn’t it?

Biden: “Reduced the ruble to rubble”

June 6, 2022

Shades of Bush’s “Mission Accomplished”
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After (kinda) imposing supposedly draconian sanctions, Biden claimed a quick victory when the Russian ruble tanked in the financial markets.

Perhaps, a premature end zone dance by the “Big Man”.

Here’s where we stand now.

image

True, immediately after the initial round of sanctions were announced, the ruble — which was trading around 80 rubles per dollar — devalued to about 150 rubles per dollar.

Said differently: Before the sanctions, $1 could “buy” about 80 rubles.  Soon after the sanctions were announced, $1 could buy 150 “devalued” rubles.

Yep, started to look like rubble.

But, not so fast…

After about a month, the ruble was right back where it was pre-sanctions — trading at about 80 rubles per dollar.

Now, it’s trading at 63 rubles per dollar …

English translation: The ruble has gained value (vs. the U.S. dollar) since the sanctions were initiated.

How can that be?

Couple of reasons offered up by pundits:

  • Many of the sanctions were announced but still haven’t been fully activated.  For example, Germany is still dragging its feet on oil sanctions.
  • Some large countries aren’t on the sanctions’ bandwagon … think China and India, which are now buying Russian oil at a discount
  • Putin has gone big time on currency manipulation … e.g. boosting interest rates, restricting bank withdrawals, and…
  • And, Putin has started requiring that oil and gas sales be transacted in rubles (not dollars or euros)

The last point is particularly problematic since countries that are dependent on Russia for oil and gas … are still buying oil and gas from Russia at historically high rates.

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A couple of teaching points:

> Until the U.S. re-ramps domestic oil & gas production — to satisfy domestic & foreign demand — the bad guys will continue to rake in the dollars (err, rubles)

> Putin may be crazy … is certainly evil and ruthless … but he’s not stupid … so he shouldn’t be under-estimated … on the battlefield and in the financial markets.

So, whose economy is taking the hit — our’s or Putin’s?

Biden: “Don’t blame me, blame the Pandemic and Putin”

June 3, 2022

“And, by the way, it’s a global problem, not just a U.S. problem.”
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That’s the gist of Team Biden’s “message” as it is stumping hard this week to let Americans know that Joe’s economic plan is working splendidly …. and that any perceptions of a bad economy are simply that: “perceptions”.

In a prior post, we channeled an analysis done by the the San Francisco Fed (FRBSF) that concluded:

In 2021, a relatively “normal” level of inflation (around 2%) was evident   in the major OECD countries — Canada, Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, and the UK, but…

During the same period, inflation was more rampant in the U.S.  Specifically:

During the 1st 3 quarters of 2021, U.S. core CPI grew from below 2% to 4.7%.

In contrast, the OECD average increased at a more gradual rate from around 1% to 2.2% (over the same period).

image_thumb[2]

That clever analysis by the FRBSF demonstrates that:

In the 1st 3 quarters of 2021, about 80% of the U.S. core inflation rate increase is statistically attributable to factors specific to the U.S. That is, only about 20% is attributable to globally common pandemic effects.

We ended the prior post with a question…

So, what are those specific factors?

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Well, the FRBSF analysts took a statistical whack at that question, too.

Their underlying analytical logic focused on fiscal stimulus programs in the U.S. and the OECD countries:

One way to get a read on this tangle of support programs is to directly measure disposable personal income in each country.

This measures the amount individuals have left to spend or save after paying taxes and receiving government transfer payments.

It is a relatively comparable measure across countries that incorporates the overall magnitude of net pandemic transfers

And, the answer is…

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Real disposable personal income for the OECD countries increased only moderately during the pandemic (2020 & 2021).

But, there are 2 obvious spikes in the amount of disposable income that Americans “enjoyed” during that same period:

Specifically, the two peaks in U.S. disposable personal income reflect the CARES Act, signed into law (by President Trump) on March 27, 2020 … and the American Rescue Plan (ARP) Act, signed (by Biden) in March 2021.

Both Acts resulted in an unprecedented injection of direct assistance with a relatively short duration.

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OK, let’s overlay the above 2 charts…

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The visually obvious conclusions that can be drawn:

1. The Trump era stimulus (CARES Act) appears to have been absorbed by the economy … with transfer payments (e.g. stimulus checks) largely offsetting lost wages … hence little impact on inflation in 2020.

2. But, the Biden ARP stimulus (passed with no GOP votes) appears to have literally broken the inflationary camel’s back … by infusing an unnecessary (and excessive) level transfer payments in the U.S. economic system … igniting a rampant surge in inflation (that was not comparably realized in OECD countries).

And, keep in mind, that this analysis was pre-Putin’s Ukraine invasion.

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Bottom line: Sorry, Joe …  your excessive stimulus program — coupled with your war on domestic oil & gas production — account for the lion’s share of our current inflation woes.

Man-up and fix the problem!

Biden: “Inflation is a global problem!”

June 2, 2022

“Don’t blame me, blame the Pandemic and Putin”
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OK, I paraphrased the 2nd quote a bit, but that’s the gist of Team Biden’s “message” as it is stumping hard this week to let Americans know that Joe’s economic plan is working splendidly …. and that any perceptions of a bad economy are simply that: “perceptions”.

Today, let’s look at the Biden’s lead assertion … that inflation isn’t isolated to the U.S. … it’s a worldwide problem.

He implies — and sometimes says — that’s proof positive that his policies have nothing to do with the problem.

Really?

True, inflation is evident in the major OECD countries — Canada, Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, and the UK — but there’s a “but” … and it’s a big “but”.

The economic research group at the San Francisco Fed (FRBSF) recently published an analysis that concluded:

Before the pandemic, U.S. core CPI inflation remained, on average, about 1 percentage point above the OECD sample average.

Early in 2021, however, U.S. inflation increasingly diverged from the other countries.

U.S. core CPI grew from below 2% to  4.7% (in Q3, 2021).

In contrast, the OECD average increased at a more gradual rate from around 1% to 2.2% (over the same period).

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First, a couple of technical points:

  • For data comparability, the FRBSF analysis focuses on the core CPIwhich excludes energy and food.
  • Restricted by the timing of data availability, the FRBSF analysis only runs through the 3rd quarter of 2021 … all before Putin’s invasion of Ukraine.
  • Since 2021-Q3, the year-over-year core CPI has increased from 4.7% to 6.2% … and, including food & energy, the year-over-year inflation number is over 8%

Those points notwithstanding, the FRBSF analysis is quite revealing.

  • During 2019, pre-pandemic, the core inflation rate hovered around 2% in the U.S.
  • In 2020,  the U.S. core inflation rate actually dropped to about 1.5% … lower than the pre-pandemic rate.
  • Post-Biden’s inauguration in early 2021, the U.S. core inflation rate increased from 1.5% to 4.7% in Q3, 2021 … an increase of 3.2 percentage points.
  • During that same period, the average OECD core inflation rate increased from 1.5% to 2.2% … an increase of .7 of a percentage point.

Bottom line: Given a U.S. core inflation rate of 4.7% … and using the 2.2% OECD average as a baseline for “global inflation” …  only about 20% of the U.S. core inflation rate increase since early 2021 is statistically attributable to common global inflation pressures (.7 percentage points divided by 3.2 percentage points equals 21.8%).

Said differently, about 80% of the U.S. core inflation rate increase since early 2021 is statistically attributable to factors specific to the U.S.

Sorry, Joe.

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Next up: So, what are those specific factors?

Biden: Greatest job creator … blah, blah, blah.

June 1, 2022

Here’s a handy de-coding chart for you…
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Team Biden is stumping hard this week to “message” that Joe’s economic plan is working splendidly …. and that any perceptions of a bad economy are simply that: “perceptions”.

About those “perceptions”…

Biden has a 35.5% approval rating on handling the economy in the RealClearPolitics average because:

(a) Ordinary families are feeling the pain first-hand and they “believe their lyin’ eyes” every time that they pass a gas station price sign or (try to) shop at a grocery store.

(b) Everybody knows deep down that jobs have returned because pandemic shutdowns are ending, not because of anything constructive that Biden has done.

Let’s dive down on that second point: new job creation.

Below is the Fed chart of total non-farm employment going back to the start of the Trump administration … with a couple of defining milestones.

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click chart to enlarge

(A) Employment was 143.2 million when Trump took office.

(B) Prior to the Covid lockdowns, total employment reached 152.5 million … an increase of 9.3 million

(C) The Covid lockdown sidelined 22 million workers … employment dropped to 130.5 million

(D) In the  final year of the Trump administration, about 12 million jobs were regained … pushing employment back up to 142.5 million (which was 700k lower than when Trump took office)

(E) Currently — after a about a year of Biden — employment is at 151.3 million … up 8.8 million since his inauguration … but still 1.2 million lower than the pre-Covid level

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My take

(1) Seems reasonable to credit Trump with about 9 million jobs created during the “normal” period preceding the Covid pandemic.

(2) Less reasonable to tag Trump with “causing” the destruction of 22 million jobs during the Covid pandemic … true, he OK’ed the lockdowns … but, it’s reasonable to argue that the job losses were transitory, i.e. regainable once the pandemic passed.

(3) To that last point, during Trump’s last year, about 12 million of the Covid-related job losses were regained (i.e. not “created”)

(4) Since Biden’s inauguration, another 8.8 million jobs were regained from the Covid drop … pushing employment up to 151.3 million … still more than 1 million shy of the the nation’s pre-Covid employment level.

So, is Biden — as he claims —  the greatest job creation president ever?

Those are the numbers … draw your own conclusion.


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