Dana Blankenhorn

Lean Into $100 Oil

Markets are being spooked right now by Saudi Arabia’s decision to join Russia in cutting oil supplies. 

If oil prices stay high or go higher, analysts say, the economy may go into recession, and President Biden’s re-election will be threatened. 

I think there’s one weird trick that can prove a decisive point in world history.

Lean into it.

Accept higher oil prices. Note that American oil companies benefit. Explain that higher prices, and lower consumption, are essential in the fight against climate change. Highlight the growing cost disparity between fossil fuels and renewable energy, which continues to grow.

The Sauds and Russians think they have us over an oil barrel.

We should make this a decisive moment for putting them over one. 

There will be short-term pain because the analysts are right. Higher oil prices could tank the economy. They could cause a recession.

But, like the song says, your creature comforts aren’t the only things worth fighting for. The point of Biden’s economic policy has been to create American supply chains in energy, transportation, and manufacturing. The money to build these supply chains is being spent, supported by billions in private investment.

Meet the New Slum

Building a 21^st century city means ditching late 20^th century street plans in favor of the era before World War II.

That’s because 21^st century cities demand density, and mixed uses. The idea of fixed use zoning – offices, stores, homes separate – needs to go away. The most bike-able parts of Atlanta are on the east side, where Atlanta, Decatur, and Avondale Estates all had established street plans before Pearl Harbor. Outside that, roads are a half-mile apart, everyone is on a cul-de-sac, and you need a car to go anywhere.

Decatur can be a model, if area parking decks are organized so streets like Clairmont and Ponce de Leon can become car-free. What’s left are rows of four story blocks with homes or offices upstairs, restaurants and retail on the ground floor. This leaves room for small parks, which the nearby MARTA station delivers. It’s the best planned urban space in the Atlanta region.

DeKalb County had a chance to replicate this a few miles to the east, at the Kensington MARTA station. Instead, what’s going up are Stalinist rectangular blocks surrounded by street-level parking. It’s a 21^st century Pruitt-Igoe that will, by 2035, have the highest crime rate in the region.

The E-Bike Life

I have been an urban cyclist for 45 years.  But age is real. At 68, a short ride can easily send my heart rate to places it shouldn’t be.

The answer is an e-bike.

I have been using an e-bike we bought for my son’s commute for several months now. The e-bike I chose is the Lectric XP 3. It cost $1,000, amazing because my old road bike cost me $800 in 1981.

The Lectric is foldable. It’s too heavy for a bike rack, but it breaks at the base and the handlebars so you can get it into the trunk of a Toyota Corolla. The battery is in the down tube. You plug it into the wall. (Unplug it as soon as the light goes green.) Top speed is 20, with pedal assist, but the weight lets it run down Atlanta’s hills at 25-30. Range is estimated at 20 miles but the way I ride, which is carefully, it’s closer to 30.

Detroit Gets a Clue

Two facts have stood out in my coverage of Chinese Electric Vehicles (EVs) for InvestorPlace.

First. The most successful luxury brand in China is a hybrid. Li Auto has surged past rivals Nio and Xpeng by using a gas engine to extend range. Its latest SUVs go far enough on a charge, a few hundred miles, to do daily chores, recharging overnight. There’s a gas engine powering the battery and electric drivetrain, however, that can deliver a range of 800 miles. The Plug-in Hybrid (PHEV) approach answers the objections of families who want an electric, but also want range and all the size, bells, and whistles they’re used to.

Second. The most successful Chinese EV company serves the mid-market. That would be BYD, whose electrics sell in the range of $25,000 each. They may outproduce Tesla this year.

Food Riots

I wish I had better news today, but how can you grow food at temperatures that kill germs? 

You can’t.

Food riots are coming, all around the world, in the wake of the “new normal” that is 2023. 

With temperatures averaging over 100 in the growing regions of Europe and North America, I can’t see a big crop coming in. Those temperatures are going to move to the southern hemisphere this winter, burning Brazil, Argentina, and Australia. Everyone’s talking about El Nino. Fewer are talking about this new normal.

Food may be an inflationary story in the west, but it’s a survival story in the global south. Few are paying attention to the coming starvation. Wars, even “good wars” like the one in Ukraine, are environmental disasters on many levels. That war needs to be ended, quickly, which means a deeper involvement in the near term, and greater risk.

Car Evolution

For the last several months my editors at InvestorPlace have had me on the Electric Vehicle beat.

It’s one of the three themes for this decade, described here in 2019. 

Oil is going away. This must happen. The world can’t survive otherwise, at least the part that humans inhabit. We’re already seeing evidence.

The key to getting there is by replacing oil with renewable energy for transportation. That requires a lot of innovation.

Back in 2019 Elon Musk claimed he had the answers. He didn’t, at least for most of us.

That’s because even Tesla batteries have a problem (beyond catching fire). Their energy density is low, much lower than gasoline. A gas car is lighter than an electric and goes further on a fill-up.

This will change, but it will remain a problem for years.

The Last Conservative President

When the Greatest Generation rebelled against FDR, in the 1960s, they didn’t stop with Nixon.

Or even Goldwater.

Nixon, who had been Eisenhower’s VP when liberals dominated the political conversation, embodied the New Right’s Id but resisted implementing its worst impulses in policy. He wound up as the last “liberal” President, and the ascendent right hated him. Hates him still.

I know. I was one of them. What young conservatives wanted in 1971 was Ronald Reagan.

Can China Be Turned?

A quiet effort is underway to turn China from the path of war back to the path of prosperity.

If it works, it’s the biggest story of the decade.

Secretary of State Antony Blinken got a surprisingly warm reception in Beijing last week. He even got an audience with Xi Jinping, complete with a handshake that shows Xi as an old Chairman Mao.

China’s establishment is torn between two ambitions.

Its military and political establishment want Taiwan back. They’re willing to kill millions of their own people to get it. They see the price being paid for their depredations in Xinjiang and Hong Kong as worthwhile. They want what Japan wanted before World War II – a “Greater East Asia Co-Prosperity Sphere” that can stand as an equal to America’s dominance of Latin America.

China’s business establishment, and its people, want the deal they signed up for 45 years ago. Deng Xiaoping made a compact with his citizens in 1978, capitalist prosperity in exchange for absolutist unity. Westerners read Tiananmen as the destruction of freedom, and China’s efforts to forget it as ignoring the lessons of history. Both are true. But the other side in that exchange, an apartment, a car, and a chance at real wealth, is just as real.

America’s Two Car Markets

The U.S. has two car markets. Its auto industry serves just one of them.

This was made crystal clear recently when General Motors said it will discontinue the Chevy Bolt, its electric sedan. It did the same with gas-powered vehicles years ago.

Sedans, crossovers, and mini-SUVs are what people drive in cities. Where roads are thin, families are small, and trips are short, you don’t need anything more. A city car will sit in a driveway 23 hours out of 24. This is what I call the mid-market, cars costing $25-35,000, plus tax, title, and license.

Contrast this with the suburban and exurban car markets, which U.S. makers do serve. They’re huge, like tanks. They’re ridiculously overpowered. When they’re electric, they weigh several tons. They destroy roads, and anything else they’re driven on.

Things Are About to Happen

This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it. 

A political campaign can start only after policies are implemented.

In 2023, a lot of things are about to happen that will have profound impacts on how people vote next year.

• Ukraine is coming for Russia. We’ll know a lot more about that by fall.
• Jack Smith is coming for Trump. We’ll know a lot more about that by fall.
• Gun, abortion, and education policies are being implemented by states and we’ll know a whole lot more about their effect by fall.

I haven’t even mentioned the weather, which will show in no uncertain terms just how damaging our reliance on fossil fuels has become. Droughts and hurricanes will wreak terrible havoc on the whole planet this summer, and on Americans too.