Monday, August 4, 2008

The Economy on Wheels

I am now seeing more evidence of my favorite indicator of economic instability--absurdly expensive exotic cars. It is now a seller's market for such vehicles as the new Ferrari 612 Scaglietti with an average price of $320000 and the Maserati Quattroporte with an average price of $112000. While the price of some of these exotics is lower than the super-rare exotics of 5 years ago (the Ferrari Enzo sold for $630000), those had extremely limited production of only 200 or 400 individual cars, world wide.

The current crop of uber-expensive cars are showing two trends that worry me: 1. they're biased towards luxury, 2. they're being produced in huge quantities that are selling out as fast as they can turn them out. What this tells me is that the more and more of the money in our economy is moving into the hands of a very small upper echelon, and it is now de-rigeur to have one of these exotics as a status symbol--yet the people who are buying them are not the expert-driver car collectors, just garden-variety ultra-millionaires who have more money than brains and need the status symbol.

When people start dropping $200,000 and $300,000 for a status symbol without caring too much about it, while a vast majority are having increasing trouble making ends meet, the economy is unbalanced and rushing headlong towards collapse.

We saw this in 1989 - 1992, with the Ferrari F40, the Bugatti EB17, the Cizetta-Moroder V16T, etc. As more and more of these $350,000-plus cars became immediate sell-out items, the economy became more and more unstable, eventually collapsing and leading to the election of Bill Clinton over Bush the 1st.

Wednesday, July 16, 2008

True Energy Conservation

First a few true statements: We live in a world that is dependent on energy. We use a tremendous amount of energy in transportation. The vast majority of that energy comes from oil. There is no-one who can argue with these facts.

There are a number of ways we can use less oil for transportation:

1. Hybrid vehicles and electric vehicles. Electric vehicles are more energy efficient that traditional gasoline or diesel powered cars, but ultimately they shift the burden of converting a fuel into energy to the power plant. In effect, electric cars run off hydroelectric power, nuclear power, natural gas or coal.

Hybrid vehicles use a gas or diesel engine more efficiently, by allowing the motor to work at its peak efficiency creating electricity and using an electric motor to apply some of that electric energy to the wheels. Depending on the design, a hybrid car can double the fuel efficiency of a traditional car design.

2. Public transportation. Even though buses and trains are heavy and use a lot of fuel, when they are used fully, they use less fuel per mile per person than the sum of the cars needed to drive all those individuals to their destinations. However, many cities these days are not designed in a way to make good public transportation easy to use. Therefore, public transportation is vastly under-utilized. It simply is not convenient enough.

3. Urban and suburban planning. No matter what transportation solution people use, a tremendous number of people move a tremendous number of miles every day in every city. To ferry kids from school to ballet lessons to soccer practice, etc, while fitting a commute to and from work in a modern US city requires traveling several tens of miles per day. In a city of only 100000 (one hundred thousand) population, that could add up to a million miles per day. Reducing the number of miles people need to move would provide a much greater savings in transportation energy than any other conservation method.

If we could redesign our urban and suburban spaces so that schools, practices, lessons, shopping, and workplaces are all within walking distance of small residential centers, then people would not be forced to burn fuel to reach their destinations. This is a radical solution that requires rethinking our civic planning. For decades cities, especially in the western United States, have evolved in parallel with the highway systems. Residential neighborhoods are concentrated away from commercial areas. Industrial and professional spaces are almost always separated from residential development by large distances. We need to redesign our cities so that most workplaces--those that don't present hazard or nuisance to the community--are dispersed in smaller concentrations no further than half a mile from the neighborhoods that could house the people who work there. Similarly, shopping and park spaces need to be dispersed among the residential areas as well.

In addition, we may see other benefits. When people are walking, they are more likely to say hello to others on the street, they are getting some degree of exercise, and they are losing less time to their daily runaround and commute.

Something to think about as we approach greater economic and political crises centered around oil.