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$25/gallon gas and bikeways to L.A., electric vehicles, Dude, we are doomed (long-wave cycles converging), Chinese goods and competition, diet/lifestyle, something amiss and more   (week of June 20, 2008)

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I am an independent agent/broker…I insure cars, homes, businesses, work comp, commercial liability and properties, etc...and oh yes, health plans...both individual and group employer….before you conclude I am part of the problem, consider:

Blue Cross, one of our companies, is no saint, and I do NOT work for them, I am an independent businessman….but, I get about 7% gross from them…out of this I must service all of my clients, answering all questions, going to their businesses and sitting down with owners and employees, going to individual clients homes if necessary to explain options and coverages, etc….

I can tell you that my clients really really appreciate a human being locally to help them through this….out of this I have to pay my employees, who take their wages and put them back into the local community here, pay taxes, as I do, etc…finally I have enough left to make a living, but it is middle class type income…..for DECADES this has worked well, and only started to go bad about 8 years ago.

I am not the cause of increasing premiums, and I DO provide a valuable service to my clients….nothing has changed in all these decades except the premiums keep going up….this is caused by medical costs….not bloated admin at my level…there is no free lunch…medical costs are the problem that continues to drive costs up.

Why are drug companies allowed to advertise complicated drugs like candy directly to consumers with billion dollar commercials all over TV now? This DID NOT EXIST 15 years ago until the lobbyists bribed Congress into changing law…why does NO ONE mention this? because to the consumer, they WANT this, the drug companies know how naïve people are, who want a quick fix pill for all of their problems, vs. cutting back on the Cheetos and walking more.

Also, despite studies to the contrary out there, with a bankrupt federal govt., do you really think the feds can take on another MULTI TRILLION dollar mess like health care and devote more than 81 cents of every premium dollar (or tax dollar in their case) to pure medical care? Because that 7 per cent I mention above comes OUT of the 18 per cent that is left…the insurance companies also have employees they must pay, and buildings that must be leased etc….the insurance industry is NOT saintly, but NO private company is.

If you feel that some federal department can really do a better job, that is difficult to believe…and believe me I scream at these companies all day long.

We also are living in a world when people want TOTAL health care, rather than hospital care….in the 60’s and 70’s these were called “hospital plans”…what has changed? Part of this complicated problem is an insatiable appetite among the public for more and more care in more and more areas….I could go on and on about clients who are furious there is not massage coverage, no acupuncture, no diet clinic coverage, no Lasik coverage…it is take take take, and one of the reasons people are wanting Mommy (federal govt) to pay is they keep thinking that means THEY don’t have t o pay for it….it is a very frustrating time for me……Michael Moore is just plain wrong on this…at the same time, I know my companies, would cut my throat in a minute if they thought they could do business without me… but every time companies have tried, clients and the public keep coming back to local agents….they want local HELP and SERVICE not some 800#...

Dr. Art K.

A wonderful article on diet, nutrition, and health. I recently traveled to Europe. Wherever I went, I felt at 190lbs to be the largest/most overweight person. The dirty little secret in medicine is: the less you eat, the longer and healthier you will live. It is one of the few things we know in medicine. I would also lay blame with our sports media. The average football player is estimated to be obese. True for many baseball players, pro wrestling, etc. We could only expect our populace to emulate these bad habits. If the media would start focusing on sport that decreases weight: running, skating, swimming, soccer, hockey, cycling, tennis, we would see a comcomitant improvement in our weight and health.

Michael Goodfellow

You are making it sound like the $99 trillion figure is entirely due to increasing numbers of old and fat people in this country, plus corruption and incompetence in the medical system. I don't agree.

The huge number comes from the long timeline they use on these estimates -- I forget if it's 30 years or 50 years. At 7% real inflation per year, in 30 years, costs are 7.6 times current costs. Something like $25,000 per year per person, in today's dollars. At 50 years, costs are 29.5 times current costs -- $88,000 per year per person, today's dollars. Clearly, it's medical inflation that has to be tamed, rather than changes in lifestyle. And clearly it will be. As the saying goes, "if something cannot increase forever, then it won't." It's silly to assume that fat people will bankrupt the country. We'll just stop spending more than we can afford on their treatment.

The amount of money at stake will also create a huge market for solutions. An effective diet pill, stem cell treatments for diabetes, etc. By your calculations, we could spend a trillion dollars researching the causes and cures of obesity, and it would be a bargain. We aren't spending anywhere near that amount.

I also think much of the medical cost increase is due to doing more medical care, not just some overhead or worsening health. A generation ago, my 73-year old mother would never have received two new knee joints for her arthritis. She'd just have suffered, and died earlier due to reduced mobility, or a broken hip due to a fall. Now she gets care, (effective care!) including drugs for blood pressure and cholesterol. The lower health costs of the "good old days" came at the price of reduced life spans.

Jed H.

As I read your latest post with some interest , I would add the following " reader ( my ) insight "to your diagram of "Somethin' Amiss" : (Are People Smarter than Media Pundits? Yes; Something Is Deeply Amiss (June 16, 2008)

1) MANY American Businesses @ Edge of The Abyss ---- to wit, Airlines; Automakers; Bankers (commercial); Wall Street, brokers; Mortgage lenders; generic Retailers (i.e., Main Street ); Realty Brokers; Home Builders; Construction workers; Truckers ( diesel fuel ), & a long list more !! Very few doing better, except for Corrupt CEO s raiding tills !!

2) TOTAL Lack of Trust & Disgust with the Polits in Wash, DC & in the Greed & Corruption on Wall Street --- highly overpaid CEOs, causing collapse of their PUBLIC Corps, walking away with 10s to 100s MIL"N $$ e.g., Countrywide FC; ENRON; Bear Stearns; etc . ( prob. LEH soon )

3) Anger, Denial, Confusion etc. reigns over just ..... "What has happened to the once mighty USD $$ ?? The world is simply ........" Awash with Bogus Paper $$" , & that HOT MONEY, is going into "Hedge Funds" --- i.e. commodities !!

4) Any persons with just a few brain cells firing can "Sixth Sense" that the USA's & Global Economic policy, vis- a- vis Energy Use, Food (IN)Security, Global Climate Change, Gross Overpopulation , Losses to farmland, timber & forests, overharvesting of ocean fisheries etc are ...... " Totally UNSUSTAINABLE " !!

5) A few Posts ago , you had a chart about coinciding "Cycles" ---- I suspect that the Long, K-WAVE will be coming like a "Tidal Wave ( Tsumani )" , & there will be very little that national govts can do about it !! The people can sense this ..... THAT is just WHAT .IS.....THE "SOMETHING" AMISS !!

Harun I.

Great post today $25 per Gallon Gasoline and a Crazy Idea (June 12, 2008). IMO, your job as a journalist is to uncover truth. Sometimes this may come at the sacrifice of popularity. This may not feel good but consider that not doing so (exercising your journalistic responsibility) would come at the sacrifice of your integrity.

"Plato is dear to me, but dearer still is the truth" -- Aristotle

Don E.

how many of you were traveling in the '60s? maybe the 70's were similar, i just don't know. but in the 60's when i got out of the navy i went thru dozens of countries on foot and on my thumb. i slept in banhofs and sikh temples. i stayed in hostels that i think the mafia ran. the one overwhelming thing about this experience was the information mkt. not really a mkt. since there was no charge.

i'll give you one example. in calcutta the talk at the salvation army, that's where travelers stayed in large part, was that a visa to australia could not be had without money in your pocket, which none of us had to spare. but if you took the $50 flight from calcutta to bangkok on burmese air you stopped overnight in rangoon and the aussie embassy there would give absolutely anybody an entry visa. besides, it was the only look at burma you could possibly get, and kipling was always singing in my head about the dawn coming 'up like thunder outer china'. ok, that really does tie into chas. saga of bicycles on i-5. he's right, you know. you stop the night, eat in a communal dining room, talk to everyone, and you get information. your view of the world expands in a smaller way than if you were watching cnn, but expand it does. it is wonderful.

as a slight aside, today's corollary is the israeli network. they are everywhere on foot and moving fast. i met several israelis in peru a few years ago and they told me about their system. it is cleared thru their legations. all info is centralized and available. it includes tricks like burma air, as well as where you can work illegally, how to cross borders, people you can stay with. a really amazing thing. a few of you might feel offended here and deny this network exists, but i feel confident it does. it just makes too much sense.

so, here's to messages tacked on bulletin boards at ex-gas stations on our highways, a ladle in the soup pot at the end of the day, and a slower life.

David V.

RE: Dude, We Are So Doomed (June 11, 2008):

I have read several books by people who were alive through the period called the "Great Depression", but did not know about that condition, because of where and how they lived.

They will say, I left the wilderness in 1940, and returned to Seattle, to discover that there was economic hardship in the country.

When I was young a common dream was to live on a Pacific Island with all you needed to eat available to you, in your secure beach cabin. With no worries of the worlds problems.

Now everyone worries 30 hours a day about stuff that might effect their illiussion of wealth.

I am happy to be a fool in the wilderness, where my cycle of doom involves splitting firewood, and planting the potatoes.

Terence Parker

Reviewing your amended cycles page, I see that - between us - we have seem to have scheduled WW3: it will start in 2021 and end in 2026! Sadly, we may be right - but where will it be? The Middle East? Europe is not completely out of the question. Afterall, wars have ended in Flanders field every hundred years or so: 1814, 1920, 2026?. WW1 continued in Russia beyond 1918. There are a lot of difficult EEC 'issues' still to be resolved, and French farmers can get quite bolshie when their agricultural subsidies are threatened! There is also the energy supply problem which is likely to stir up anger and resentment once we start bickering over limited supplies.

James N.

I was thinking about electric vehicles in the future.

We can generate a heck of a lot of power from coal, natural gas, nukes and wind. To a smaller degree solar. Plenty of actual power is available.

My thought is the technology involved in the EVs is getting better and more productive. So, the range of the vehicles is increasing. I'm also thinking we might have a third rail system in the future on highways. So, for longer trips you can draw power from the grid.

My other thought is if the economic incentive is there we will develop swappable battery packs (low tech) or other fast charging systems.

So, I'm expecting we find a way to keep traveling long distance with out spending days biking (though it would be quite nice to do so).

Also in the analysis out there. Not sure people are truly showing resource shortages. As the resources become more constrained the move to more efficient vehicles will accelerate. Should have a similar effect in growing economies as well.

People getting burned by high gas prices will remember it for a long long time. I think it would be highly likely that many future purchases will be of hybrid vehicles and lower consumption vehicle. While fleet turn over may take a while a substantial number of SUV owners will park the vehicles and buy older high efficiency beaters to use day to day.

When you look at the numbers; the percentage reduction in use is pretty huge. A Camry is only getting 31mpg. Compare that to a Ford explorer at 20 MPG. That is about 33% reduction in use.

Then you can go to the extreme and look at a Prius. A reduction of more than 50%. Not to mention the regenerative braking technologies will get better and recover more energy possibly pushing cars like the Prius into the +50MPG range.

Much like the housing market as each of the Prius gets sold another SUV gets shelved or another probably higher efficiency vehicle falls on to the used car market.

Further, people may migrate closer to cities and live at somewhat shorter distances from work. It would be nice to eliminate some of the suburban sprawl and further cut use.

The US consumption is the low hanging fruit to change things. We might be facing a recession (SUV sits in driveway with out of work owner getting infinite MPG). The number of SUVs is high so the change in use is dramatic. Finally we might be facing peak population and there will be a decline over the next 20-30 years. China will also have a peak population phenomena as well as you have pointed out in your blog.

Anyhow, people purchased smaller more efficient cars for a long time after we had the last big gas problem. I could see it happening again and lasting longer. So my guess is a lot of the consumption models might be way way off.

I'm expecting an oil price collapse in the next 3-4 years.

Thanks for the great web site.

Michael Goodfellow

RE: Scapegoating China (June 13, 2008):

Actually, I was thinking about this while I made breakfast, and it's the kind of thing I would have said back in the 1980's. There was the same defeatism running through the country back then. I was working at IBM and a lot of us wondered what was going to happen to the company, and the economy in general. It just didn't seem like anyone was trying to fix the basic problems! IBM was bleeding money, had no answer to the early PC products, and was hopeless in software and services.

When I bought my first car in 1982, I couldn't find anything American I liked. I wasn't trying too hard though, since my previous car (bought by my parents) was an AMC Matador. Imports looked pretty good! I bought a new Toyota Celica, which ran flawlessly the whole time I had it, despite abuse (I neglected to put oil in it for about five years.) In 1991, I looked around again, and it was hopeless. American companies were shipping trucks and minivans, and neglecting sedans, especially two doors. I looked at the European cars, but they were really pricey. I bought an Acura Integra, and was amazed. It performed really well, and made anything American in that same price range look like crap. I bought another in 1999, which I had up until I switched to my Ford van in 2002. The van was the same price as my last Integra, but was just embarrassing in comparison. It's been a continual source of minor problems, all related to quality control. I'd switch back to imports in a heartbeat if I didn't need the wheelchair lift.

In the 90's, the computer industry took off, and we weren't so worried about foreign competition. We all wrote off the car industry and other manufacturing as "old thinking" though. It didn't look like it had gotten any better, and I would not have been surprised by an auto industry bankruptcy. IBM pulled it's act together, shed something like half its workforce, switched its focus to services away from manufacturing, and managed to survive. It's nowhere near the force that it was in the 1970's, when they described the industry as "IBM and the seven dwarves."

Clearly technology marched on. A more complete statement of our problems now would include automation. I'd also point out that the kids who come out of college or high school and do "McJobs" involving nothing more than waiting on people and running the cash register, are doing the same things the auto workers did before them. They are assuming they can't be replaced, and that someone owes them a decent living. Although today's slackers probably think that sometime towards the end of their 20's, they'll go get a "real job" and it will all change. They are wasting their prime eduction years doing crap.

Economists say that automation has had more effect on manufacturing employment than imports. I'm not so sure, given the huge quality differences at the same price. I have no idea why anyone buys Fords that cost the same (or more!) than Acuras of the same class. Every time I look at the paint which has all peeled off my rear bumper, the "check engine" light that comes on every few months (because of a bad sensor) and the 1970's vintage radio, I'm actually slightly ashamed to have bought the thing. It feels like the product of a third world country.

You complain about Chinese quality, but they build things like Lenovo laptops that are as good as it gets. They can build quality when they need to in order to compete. In cheap plastic crap, they have the entire market, so I don't think there's much competition to worry about.

Don E.

really, chas., it ain't nobody's "fault". i am not overly omniscient, nor i am given to amazing predictive bursts, but when i came back from traveling the globe, about 1968, i understood one thing clearly. the world was an uneven playing field that had, absolutely had, to level out. i didn't understand economics or have insight into trade policies, but i did travel around india in third class railway cars. when you are packed into a victorian british carriage which seats 16 with 80 - 100 other souls and every stop is a fistfight to keep others from entering your car you see that the world must change. when i was in india every anglo, no matter how shabby and shoddy, was 'sahib'. there was either respect or fear present; i sat with lepers and watched the dogs at khalighat in calcutta getting fat off the burning corpses, and i knew things would change. i don't know how else to say it. others i traveled with and met on the road didn't seem to grasp the situation. i talked endlessly to folk about it in the u.s. when i came back and started school. nobody paid any mind. it was all there as obvious and the fat dog and missing nose. maybe it's the fault of the john company and british hegemony.

we are just riding along on history's tides. it won't be any worse than others have gotten. get over it.

Thank you, readers, for such thoughtful contributions.

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