View Full Version : Where do we go from here?

Glenn Black
11-22-08, 10:09 PM
More and more people will hear about iTulip and Ka-Poom. Will anybody in power listen?

Mistakes have been made. More mistakes are yet to come? EJ says we should react (ie. protect ourselves) to what those in power will naturally do, not try to change their minds.

Whether it's to guarantee someone a place in history, or gain the world's biggest "I told 'ya so!", or arrogance, or maybe, just maybe, something different will happen, if those in power decide to listen, or not be so gung-ho on their natural instincts and plans. Whatever reason, I feel a sense of duty to point the direction, as best we can, to get us all save from this disaster.

Is it necessary for us to "pay the price" by taking everyone back to the economic stone age and start all over? First, I don't believe everyone will go there, but many will. I think those who profited most during the last 20 years of excesses will lose the most in actual $, but not on a percentage basis. The poor don't have that much to lose in the first place. It is the majority, the "middle class" who will suffer the most in this economic hole we have fallen into.

As I am one of those who risk is the highest, I have started this thread to put forward my ideas, to encourage others to add theirs, and perhaps we, acting together, can cobble together something worthwhile that others can use as a seed to plant and grow as helping find a solution to this mess.

Some may say a parent can warn a child about a hot stove, but some children never listen until they have burnt themselves. That may be true. However, holding a child's finger on a hot burner to teach them a lesson they will never forget is abuse, causing permanent damage on a physical and mental basis.

Similarly, some degree of pain and fear, for some significant duration may be necessary to maximize the long term learning from this economic meltdown. However, we need a plan for when those limits have been passed. I hope this thread helps towards that plan.

The government, in my mind, is best to co-ordinate, facilitate, and act when the private sector hesitates, or wanders aimlessly. Some seed capital may be necessary, and the government can spend this themselves on everyone's best interest, or offer it to others as an incentive to start moving in the right direction.

Any economic activity during times of pending deflation can help slow or minimize that death spiral. However, choosing random projects will produce few long term benefits. So what should we do?

During the Great Depression, the Hoover Dam was built. Some environmentalists feel that was a huge mistake, but it permitted Las Vegas to occur, and electrified California, allowing it to grow and prosper. Both of these permitted/caused huge economic engine to develop and flourish for more than 50 years. Similarly, roads and bridges were constructed, leading to the Interstate highways many years later. That infrastructure has paid benefits every year for decades through greater mobility, leisure, inter-state commerce, etc.

If that is true now, then what should we work on?

Crumbling bridges, some which have collapsed in recent decades, is an on-going project. They exist, they need to be replaced every 50 to 100 years, painted on a regular basis, etc. That isn't new, nor building new economic engines, it's just doing what should have been done all along. Rules & regulations need to be changed to ensure that we do this necessary maintenance on a regular, consistent basis.

The auto sector is in collapse. For the environment and energy efficiency, we probably need fewer cars, more rational and prudent use of the vehicle, walk & bike more, share cars, rental rather than own, and similar concepts. All that means fewer cars, longer life.

Ten years ago, the average age of a N. American car was 7.5 years (ie. at 7.5 years, half of the cars were in the auto wreckers, half still on the road licensed). Over the past 10 years, the average age has gone to 8.5 years. That means fewer cars being made, better reliability, more maintenance. Same for radial tires. Michelin made a decision in the 1950's to develop radial technology even though it doubled tire life expectancy, meaning fewer tires would be required per customer. They trusted that it was right for the customer, right for the industry, and they would gain more market share that would more than compensate for the loss in tire consumption by each customer individually.

The typical N. American car dealership makes $800 to $1,500 profit when they sell a brand new car. The servicing of that brand new car over its 7.5 year life (now 8.5 years) is ~$60,000 income. Those numbers may be apples and oranges, but instructive. The dealers want to service, not sell. The best of them have realized that for decades.

One idea floated decades ago is that dealerships would just rent cars for a day, week, month. When you get tired of what you're driving, or your needs change (I usually drive a micro compact for fuel efficiency to commute, but need a pickup truck this weekend for some special tasks), you bring it back to the dealership, it's assessed, you pay for the use, and pick out something else. Your trade-in is rapidly repaired & cleaned, and set back out on the lot for others to come by & choose. All this is done as easily as renting a carpet shampoo machine to clean your rugs do-it-yourself; no fuss, no muss.

In an economic downturn, it may be easier to sell a car for a day, rather than a lifetime. If dealer mechanics service a dealership's rent-for-a-day cars, the dealer will eventually ensure the mechanics work more efficiently, and get it done right the first time. These skills will be a benefit to those who still own, and come to this A-1 dealer to get service on their privately owned vehicle.

According to the Architecture 2030, all residential, commercial and industrial building operations consume 76% of total electricity generation.

The typical electric generation plant is only 35% to 42% efficient, the rest is given off as waste heat. Transmission losses in the wires loses another 9 to 15% (wire resistance, transformer losses, etc.), so our electricity is only about 30% efficient by the time it gets to the user's building.

The automotive industry has great technology for engines, vibration control, dashboards and cowlings, exhaust systems, fuel delivery, alternators & generators, and micro-computers for controlling those engines. With waste heat recovery, these engines can be made to be 92% efficient.

Alternatively, we can modify Detroit's technology to place a super quiet, super efficient gas or diesel engine in the basement of every building. When you need electricity and heat (ie. winter), the engine is started. If you need electricity & cooling (ie. hot summer), the engine is started. If you just need electricity, you can take from the grid. Generate excess electricity? Push it back to the grid for others to use.

The problem with wind and solar farms is that they are often at the wrong location. Electrical distribution systems are built like trees. There is a massive trunk to which a power plant is attached. There are a few major branches attached to the trunk, and hundreds of small branches, and thousands of slender twigs, one twig to each user. You cannot place a large power producer (ie. a 1,000 wind turbines at 1,500 kW each for a total of 1.5 MW) at the end of a twig, and push the electricity back to the trunk. Unfortunately, good wind sites are usually remote, at the twig end of the electrical grid.

With a small generator in everyone's basement, the house still has 100 amp service, but the power sometimes comes in at 100 amps, sometimes it goes back to the grid at 100 amps.

Space heating represents 57% of a buildings total energy consumption. Add domestic hot water at 25%, and we have a total of 82% of the total energy consumption. This is the lion's share, approx. 69% of all electricity-equivalent energy consumption.

For that housing boom/bubble, the state can buy all of these surplus homes, and re-sell them to those who will convert them to solar powered with internal combustion engine in every basement, or similar technology.

Japan, Germany, and other countries have already adopted these technologies. China is the world's leading nation for the % and number of houses that use solar water heating. If they can do it, why not us?

That combines our housing bubble with the economic collapse, and makes EJ's next bubble prediction (Alternative energy) all reinforce each other. Everyone's a winner.

Other ideas?

11-23-08, 05:17 AM
The problem with most people renting a car when needed is that you'll need a very big number of rental locations. This will only be cost efficient in densely populated areas. Will not be an option in rural areas.
Decentralised electricity/heat generation is a current option and applied in Germany blockwise, so not for every single house because this isn't cost efficient. However this will not be an option in 20-30 years time (using fossil fuels).
You don't need wind farms, you can spread the windmills, or you can build a big branch to your windfarm if/when cost efficient.
Household energy need can be met through diversification in the future.
Predominantly solar in the sunny areas, windmills in the windy, biomass (wood etc.) in the rural. You'll have to build a new grid on this new layout. Central in your grid you can then place a few nuclear or coal plants.

11-23-08, 08:40 AM
Decentralised electricity/heat generation is a current option and applied in Germany blockwise, so not for every single house because this isn't cost efficient. However this will not be an option in 20-30 years time (using fossil fuels).

Some homes in Germany have GHP