Dana Blankenhorn

Today in the War Against Oil: Turning Commercial Engines into Hybrids

HPEV  is among the many companies trying to transform transport by making it more efficient.

CEO Tim Hassett said his Hybrid Plugin Electric Vehicle has patents on a technique for using heat pipes to turn engine waste heat into electricity, which can then help power the vehicle. The electric motor acts as a “load assist,”  meaning the main engine doesn't work as hard and uses less fuel. It all gets attached to your rear axle.

Hassett, who turned around a company called Hawk Motors after working for GE, is working with a vehicle control company called Inverom in Chicago on the retrofits, focusing on vehicles the size of the Ford F350-550 or Dodge RAM 5500, which presently have mileage ratings in the single digits. (The company says it can turn around a vehicle in a single day.)

Ultra-Bear Hugs: Your Assurance of a Bull Run

Think of this as Volume 16, Number 13 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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I like to joke that I've predicted nine of the last four recessions. Most who follow the market can probably make the same claim.

There are always Cassandras out there, like Peter Schiff, convinced that the end is near. Every once in a while, as in 2007, they are right. Usually, they are wrong.

Some 35 years as a business reporter has convinced me that the market's main danger signal comes when people like Schiff are disdained or, worse, ignored. That's an indication that everyone is in the market and buying, that no one is considering possible trouble ahead and selling, so the next step is inevitably going to be a trip and fall.

Schiff's bearish call is based on Austrian school economics , the idea that government should have no role in the market, and that ultimately the only cure for excess is austerity. He blames government policies for the last crash, and believes all intervention since then assures another crash, this time based in lack of faith in government.

I disagree. I admit there is danger in continuing to run huge deficits. But growth provides a glide path toward balance, and moves toward balance reduce the ratio between GDP and total debt, as Fed chair Ben Bernanke says, and as we found in the 1990s. I think we're more likely at the start of something than the end.

Besides, technology is naturally deflationary, and deflation is a far greater danger to any economy than moderate inflation. Efficiency technologies create commodity deflation, just as Moore's Law created deflation in goods production and transport. The Austrian School not only defies Keynes, with no explanation for the growth of either the 1930s or the post-war era, but Moore as well.

But if Schiff's concerns were ignored, or dismissed, if there were no stories about ultra-bears sounding alarms, then I would be bearish. Because everyone was boosting Internet stocks in 1999. And everyone was telling us to buy housing in 2006. Anyone who disagreed – and I disagreed quite loudly in the first instance – was dismissed as a crank.

Ignoring warnings is a sure sign a market crash is near.

The Blackboard Jungle

Blackboard is the Oracle of online testing systems.

Most big colleges use it to give students homework, even conduct tests. My son has it at Georgia State and is prone to using the name as a verb -- "the professor decided to blackboard that."

Since it's proprietary, and there's an itch among many colleges for open source alternatives to everything, there has been an assumption in the open source community that it's going to get hit, like Microsoft was hit, by an open source alternative (like Linux).

One way to forestall that is to do what Oracle did, essentially buy out the competition. Oracle's purchase of Sun brought it mySQL, Java, OpenOffice, and a ton of bad publicity, giving Larry Ellison the kind of tsuris Bill Gates had to get used to back in the day. (Of course, that means he's crying all the way to the bank about his fee-fees being hurt.)

So Blackboard has chosen another path. Rather than buy out an open source project like Moodle, they bought two of Moodle's big support organizations, MoodleRooms and NetSpot. It created an "Open Services Support Group" specifically to sell colleges support for these open source projects.

The reaction of the open source community was kind of -- "uh-waah? Waah!"

Why ObamaCare Will Be Upheld

All the TV analysts are agreed that the Affordable Care Act, aka ObamaCare, is going to be struck down by the Supreme Court.

The attitude is based on oral arguments in which all five conservatives asked skeptical questions, including the presumed “swing vote,” Anthony Kennedy, who seemed to see this as a basic question of liberty, the freedom not to participate in the market.

But here's my prediction, for what it is worth. The law will be upheld. Most likely, by a 6-3 vote.

The reason is basic. Without this law regulating insurance the government has no control over one-sixth of the economy, short of taking it over, which it is otherwise in the process of doing. The current law is a Republican solution, first proposed by Richard Nixon a generation ago, and implemented by Mitt Romney less than a decade ago.

Kitteh

Think of this as Volume 16, Number 12 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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After the War Against Oil is won, another great crisis will come to America, and the world.

As energy technology has been the story of my day, so this great crisis will be the story of my kids' day.

The crisis will involve terraforming this planet, taking responsibility for global climate and working to get evolution moving forward again.

Its symbol will be one of the great totems of our own time.

Kitty. Kitty cat. Kitty kitty cat cat.

The Education Revolution

Think of this as Volume 16, Number 11 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Turns out it takes two things to spur a tech revolution.

One is capability. The other is cost.

Health care resisted automation for decades after the PC. It only began succumbing (and it's a continuing struggle) after costs got so out-of-control that care became unaffordable for increasing parts of the middle class.

It didn't matter to doctors that PCs and networks could distribute data faster than their secretaries. Automation threatened their control of the customer. Not just the retention of the account, but the choices they made on treatment, their autonomy. Their power.

Some types of technology were acceptable. Systems that made it easier to get paid, new machines, these were readily accepted. But collecting and moving patient records didn't really start until the 2009 stimulus provided the money and set a firm deadline for the industry – about 2 ½ years from now. And even now progress is agonizingly slow, with doctors, clinics and hospitals making, not tech choices, but business choices. The winners in the Electronic Health Record market turn out to be the insurers and hospital networks, who are enhancing their own control over both patients and physicians.

Education has been much the same. Even after the Internet, and wi-fi, broke the cost barrier for networked education, principals and administrators have resisted technology fiercely, for the same reason doctors did.

It's about control. If kids have network access, they can learn things that aren't in the textbook. They may even learn that teachers are engaging, not in education, but in political indoctrination, enforced from on high. The smart ones might resist and get away.

The same is true, doubly true, in higher education. Even though networks make it possible for anyone to learn anything at any time, credentialism has locked kids into rote classrooms taught by unsympathetic drones at ridiculous prices.

Teacher-controlled education is as unsustainable as doctor-controlled health care.

The War Against Oil is Being Won

Think of this as Volume 16, Number 10 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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With natural gas prices having tanked, and the President being given stick on the campaign trail over high gas prices and failed subsidies at Solyndra and elsewhere, it may be hard to see that the War Against Oil is being won.

But it is.

The War Against Oil is a long-term project, begun some years ago, meant to wean the market from its dependence on fossil fuels and create a new era of sustainable abundance. It is at the heart of today's politics, oil interests having taken command of our politics 12 years ago and retaining an absolute stranglehold on the Republican Party. But this is, in the end, an economic struggle, and what ultimately matters is cost.

Solyndra, and the other loan guarantee recipients who have struggled, are in fact symbols of this war being won. They failed because their low-cost technologies could not compete in the marketplace, against lower-cost technologies. Because of the pressure created by companies like Solyndra, solar panel production costs are now below $1/watt, and they continue to decline.

The ultimate goal is a cost of roughly 50 cents/watt, which would make solar energy the cheap energy for much of the electric grid. It's already the obvious choice where the grid doesn't exist (which is most of the world), and it can be delivered where it is produced, a huge cost advantage.

Right now the market is dominated by a single technology, polysilicon, and by a single country, China. But the opportunity is so huge that American innovators, working with organic compounds, mirrors, and rare earths, are poised to blow through the current cost floor over the next four years and achieve real grid parity. And it's that point that is key here, because once you're competing effectively on price with fossil fuels, all you need do is scale profitable production to knock those fuels out of the market.

The current reduction in subsidies, in Germany, England, and elsewhere, sounds like a defeat but is in fact a victory. Because these subsidies were always based on cost, and as costs for solar fall it's natural that subsidies will fall with them. Remember, the goal isn't subsidized power, but lower-cost power, without use of fossil fuels.

Wind is problematic. Over the long run, I don't think it competes with solar, because its costs fall only arithmetically, not geometrically as tech costs do. But wind is highly reliable. What's most important about it is that it has gotten buy-in from utility companies who have found markets for the resulting power, with “green credits” that draw companies like Google, Kohl's and Starbucks into paying subsidies so government doesn't have to, and which gives them an appetite for green power.

All of which brings us to cars.

US Soccer Evolves

Last night I saw the most amazing thing, although what was most amazing was how unremarked upon it was.

A record crowd filled the old Skydome in Toronto for a soccer game in March between two MLS teams, Toronto and the LA Galaxy. It wasn't even a league match, although it wasn't a friendly, either. Instead, it was a quarter-final in something called the CONCACAF Champions League, a regional competition designed to replicate what the UEFA Champions League has in Europe.

This competition has been going on for several years but Americans haven't really cared about it. Teams have almost deliberately fallen-down after being chosen, including the Galaxy, whom I once saw lose a two-legged tie to Puerto Rico's A-League outfit in front of maybe 2,000 people. 

The Conservative Altamont

Remember Altamont? If you're of a certain age, you probably remember it as the day the 1960s died. The Hells Angels were hired to do security for the Altamont festival in California  (what could go wrong) and the rest is history. 

Altamont wasn't seen as a political event, but it was. Afterward, young people turned their backs on protest and began accepting the idea that maybe being stoned all the time was a little bit crazy. The tin soldiers and Nixon coming at Kent State were actually late to the party, which was already over.

Basically, the whole society turned inward. The 1970s became the “me” decade and, when political agitprop returned, it was coming from the right, starting with California's Prop. 8, and we were off to the races.

This last week was the right's Altamont. Between the death of Andrew Breitbart, the right's favorite agent provacateur, and Rush Limbaugh finally going too far, with conservatives still too slow to condemn him, I think the wind has blown out of this hurricane.

Where Santorum Might Have Had A Point

Rick Santorum jumped the shark and sank his Presidential hopes recently by condemning college education. 

(The original of this picture is at FiscalTimes.) What he said, specifically, is dead-wrong. The idea that you're “a snob” if you support higher education is beyond stupid. He deserved what he got for it – Romney as the GOP nominee.

But beyond that, there is some truth hidden away inside his statement. Sometimes the squirrel does indeed find a nut.

We've become credential-mad in this country. What the President said, and quite rightly, is that trade schools and similar training programs, as well as college, are essential to the maintenance of a highly skilled workforce.

But should cooks really have to attend a college in order to cook? Should people running radiology machines need a degree in order to point it at people?

I don't think so. I think many programs for what are basically trades are misguided and wasteful. After due consideration, I'd add journalism to that list.