Prudes Trafficking Cud

10 05 2011

Having been in the EE industry for 15+ years and regularly attending conferences around the country (for just a few years), I find myself being volunteered to contribute to these conferences with planning, presenting papers, and “peer” reviewing others’ papers.  The planning, peer reviewing, and being peer reviewed are learning experiences as I gain awareness of how others think and what they find interesting and important.  I say “awareness” and not necessarily “understanding” because quite frankly, the way some people think, baffles me.

For example, I was talking with a gun collector the other day and prior to this I had thought people collected weapons like some people collect motorcycles.  They just clean and polish them weekly, talk to them like house plants and adore their magnificence.  Wrong.  He likes going to the range and shooting them.  I can understand this because I on the other hand enjoy going to the beach and skipping silver dollars off the water.  I get a rush from feelings of wealth and power as I do this.  This is not all.  I take a Porche 911 to the beach with my rolls of silver dollars because it would be really deflating to climb into the 2002 Honda Civic after my fill of dollar skipping.

The dollar-skipping Porsche story is a lie but I was just trying to draw a comparison to the weapon thing and came up short.

I am in the midst of reviewing some papers for the International Energy Program Evaluation Conference (IEPEC), but fortunately they are not boring.  In fact, I even used the overarching results from one of them as a lever in a recent proposal I wrote.  I reviewed them and presented one round of comments to the authors and I truly hope they found my comments to be beneficial and constructive to improving their papers.  My comments included suggestions like moving and rearranging some things, rewriting some sentences I had to read several times to understand, separating these from those, and I found a few typographical errors.  I thought I had written quite a few comments and I hoped they weren’t PO’d, and after hearing back, I don’t think they were.

However, I also had the chance to review comments others had written for peer review of papers our staff (not I) wrote for the ACEEE Summer Study for Industry.  Whoa!  Some were quite nasty, and likely written by an academic / government prude, anonymously of course.  Some of the findings, paraphrased to be more like Wonder Bread than a habanero pepper, are provided below.

No references documenting similar work.

The topic of the paper included a financing program for energy efficiency programs that has worked spectacularly.  The paper essentially started by saying utility financing programs suck, which outside the program(s) discussed in the paper is a universal truth.  Do I need a reference to prove the Minnesota Vikings have never won the Super Bowl?  Do I need a reference to say they blew three conference championship games since 1998?

I use references when I’m uncertain of something or if I am saying something controversial or hard to believe or as you can see below, to make a point.  If I know what I’m talking about, I don’t bother with references.

Papers should include mostly the author’s expertise, gained knowledge, and wisdom of his experiences, not a compilation of other peoples’ work.  Do we want high school term papers or real-life EE market experiences and lessons learned?  Quite frankly, when I reviewed the IEPEC papers I paid no attention whatsoever to the references (don’t tell the prude police).  There were plenty of fresh data to chew on and sitting here today a couple weeks after those reviews, I don’t think they needed any references at all.

No data to back up the premise.

This was ridiculous.  Data were clearly provided to demonstrate the wild success of the reported “financing” program.  There wasn’t much data to show other financing programs suck, but I don’t need a study to tell me beer from a major league baseball game is more expensive than beer purchased from a grocery store either.

There is plenty of research on barriers to EE in scholarly publications from think tanks like ACEEE or from the DOE and national laboratories. 

The DOE?  Is this the same DOE that promoted the destruction of millions of dollars worth of working assets as economic stimulus – i.e., throwing rocks through windows to spur economic growth?  I used to work for the DOE.  I don’t need the DOE to tell me the barriers to EE.  Scholarly?  Ha ha.  It is to laugh.  (Daffy Duck)

I’ve seen lists of EE barriers and they typically miss one of the 800 lb gorillas.  One of the most notable lists of barriers comes from the 2009 McKinsey study.  A basic barrier I don’t see in their list is lack of time due to competing priorities of end users.  Since lack of time isn’t noted, is it therefore not a barrier?

One ACEEE paper, which in fact looks pretty good, does not mention risk aversion as a barrier.  I can tell you, risk aversion is a major barrier.  Many projects will not go forward without a performance guarantee.  Since risk aversion is not noted, is it not a barrier?  Maybe it is merely an obstacle!

Lacks the intellectual rigor that ACEEE requires.

Don’t rock the boat.  I think I’m going to throw up.

This sort of comment casts a cloud over ACEEE in my mind.  To be clear, I like ACEEE.  They put on good conferences and produce/sponsor some informative papers – stuff I can use.

Reads like an advertisement and offers no new information or analysis.

This is entirely bogus.  The word “Michaels” does not appear in the paper.  Yet I review one (1) paper from the last summer study for industry – one that is close to home involving Focus on Energy – and “Focus” is noted no fewer than 31 times.  For example, Focus:

  • promotes savings and technologies through
  • is a statewide energy conservation program (not efficiency?)
  • is managed by SAIC
  • program’s success comes through their active (should be “its”, not “their”)
  • program’s success results from leveraging
  • program tends to be vocal promoters
  • energy advisor has reviewed and blessed (blessed?  This is the intellectual rigor he talks about?)
  • absent a program such as Focus on Energy, would not have been installed
  • blah, blah, Focus, blah, blah

Nope.  No self promotion here!  I believe the prude should review some past works.

Ok.  I had to sneak a peak at one more paper; this time from one of the benevolent, intellectually superior, omniscient, and of course objective DOE laboratories.  This one was on the salvation that wireless technology will bring.  Have a seat; empty your mouth of any food or drink.  The paper was co-authored by a vendor of the technology using analysis provided by Honeywell.  Suely, there is no agenda or self interest in this one.

To once again clarify myself, I do not begrudge anyone for tooting their horn.  Anyone who thinks busy professionals write papers and present results at conferences with no self interest is a naïve stupe.

There is limited evidence to support the conclusions.  There is a small out of date case study but it lacks justification for any of the assertions.

C’mon dude!  The results:  Traditional financing programs: 0.  Subject “financing” program: savings of 1.5% of sales for many years.  In case you are new to EE program goals, 1.5% is enormous, like the Oregon Ducks averaging 47 points per football game or the Badgers scoring 83 points in one football game last year.  Both are incredible.  Don’t believe it?  Look it up yourself, prude!

I do not want to read high school term papers of reconstituted cud.  I do not want to read a doctoral thesis or six-line sentences full of four syllable words.  I want to read something I can use or at least find interesting.

written by Jeffrey L. Ihnen, P.E., LEED AP

Green Jacket, Cigar, Gold Rings, and Disneyland

18 01 2011

I attended the Midwest Energy Efficiency Alliance last week and it was an interesting environment, to say the least.  This was the 4th or 5th MEEA conference I have attended. 

Behavioral stuff is an up and coming topic/issue in the EE industry.  I am planning to do a rant that to save energy, people have to give a crap.  I just need something to push me over the edge.  After all, just about all lasting energy efficiency requires behavioral changes.  Only inanimate, stationary, non-energy consuming stuff, e.g., insulation, doesn’t require behavior change.  Everything else has a behavioral component for maintenance, avoiding rebound and things like that.

What was probably most interesting to me was the political environment addressed by speakers at the conference.  For whatever reason, MEEA likes to attract people from Washington DC to discuss current events.  Essentially, people from the Department of Energy, Alliance to Save Energy, and Center for American Progress, to name a few, are on the defensive with the congressional wipeout last fall.  The theme I absorbed was one of playing defense and riding out this storm.  The mood for some was as though their dog had just left them and passed on to k9 heaven. 

One speaker was afraid of the jobs that were going to be lost but also threw wild numbers around – like the energy efficiency portion of the stimulus produced $50 billion in economic activity and that the regulation put in place and on auto pilot will produce billions of baskets of bread from the heavens in the next couple years. 

Energy efficiency is not like giving a child an immunization.  I’m a member of Rotary International and one of Rotary’s missions is to end polio worldwide.  We were down to just a few very poor and politically repressed countries like Afghanistan and Sudan, but like anything, completely eliminating something is very difficult.  Anyway, I’ve seen many photos of children bawling their eyes out as volunteers dripped immunization in their mouth.  This may seem unpleasant to the tikes but it is obviously in their favor and has a practically infinite benefit/cost ratio. 

Conversely, we can’t ram energy efficiency down peoples’ throats.  How many times do I have to say it?  The price of ramming things down American’s throats: 63 house seats, 6 senate seats, 5 net governorships with a near sweep in the Midwest, and a tidal wave of state house flips.  Here’s how regulations work: increase the cost of doing business and businesses move out of the state or overseas and then they get blasted for being Benedict Arnolds by the very folks who impose the regulations. 

Like light bulbs I discussed last week, energy efficiency is gathering really positive momentum, not because of top down regulation, but because it’s good for business.  See Save Energy – Get Out of Jail where Wal-Mart used “green” to get thousands of critics off its back.  They in turn are requiring energy efficiency standards for their suppliers.  I just red about Holcim cement getting ENERGY STAR® ratings on five of their plants.  I can’t speak with certainty but I don’t think they are taking the time and expense to get ENERGY STAR to pump up their four-wheel-driven employees.  They are obviously doing it for marketing.

And the DOE person was concerned about the jobs that will be lost once the stimulus is gone.  What jobs?  I’ve never lived through such a bizarre two years in my life and I’ve been in business for 20 years – eewe, old codger, I am.  It’s been crazy.  Talk about modifying behavior.  Millions of people purchasing vehicles a few months before they otherwise would, leaving in its wake a predictable buying vacuum – how many jobs did that create?  I don’t know, but I just read that Ford is planning to bring on 7,000 workers about 17 months after the cash for clunkers fiasco.  The $8,000 first-time home buyer credit – same thing.  The housing market is still searching for a bottom.  Just let it bomb and let’s get on with the recovery.  With regard to EE, probably hundreds of millions of dollars have been spent pursuing federal grants.  Enormous efforts have been expended trying to get free money.  This, my friends, is not stimulative.  It’s fighting over other people’s money to be repaid sometime in the future by said people.  This too as with my rant last week was a bipartisan bad idea started by Bush. 

Meanwhile, our industry is booming but the DOE speaker doesn’t know this because she lives in the beltway bubble.  The downturn only hit our new construction and LEED services.  Our other EE services have more than made up for it and we have four engineering spots to fill but we can’t find qualified people.  How bizarre is this?!  I think I mentioned we had an outstanding candidate we spent no time giving an offer to but she already had two other offers and took one closer to the spouse’s job.  Our usual evaluation teams have had to sit out requests for proposals because some couldn’t handle the work they already had in the tank.  We’re passing on RFPs as well.  So jeezo woman, when the stimulus goes away we’ll still be working hard to find people – as will be many others in this industry.

Back to the MEEA conference:  After a series of “Oh woe is me” talks, one guy in the crowd walked up to the mic to make a suggestion.  Rather than duking it out over regulation and climate change policy, why don’t we focus on the irrefutable common benefits that everyone can buy into – that EE is cost effective and is good for business.  Give that man a standing O, a green jacket, cigar, bottle of milk, gold rings, a trophy and a trip to Disneyland.  THIS is what we ought to be doing, not battling it out over something people rank 19th out of the most critical issues of the day and something half the population opposes. 


Speaking of jobs… Note to wonks trying to “create” or “focus on” jobs:  People invest and are in business to make money; period.  They are not in business to hire people.  People are hired as necessary to make more money.  Think about that.  If the bureaucrats want more jobs, let people and companies make more money. 

And speaking of sole purpose of business is making money…  In New Years Collage I chronicled a three way fight The Wall Street Journal, several utility CEOs and the EPA were having.  Among the CEOs cheering the EPA’s increase in emissions regulation was Exelon Corporation’s John Rowe.  I was eating lunch at MEEA next to a long-time Chicagoan familiar with Mr. Rowe’s strategy for Exelon (parent of ComEd, which serves Chicago).  The gentleman said Mr. Rowe sold off all of Exelon’s coal generation, leaving it with only nuclear plants.  He said the nuclear plants had among the highest operating costs in the country, which left Exelon with a high operating cost, which had to be made up by higher rates.  The gentleman explained how Mr. Rowe brought on a former Naval Nuclear engineer (Yeah!  Go Navy!) to improve the “efficiency” of the nuclear fleet.  And so he turned them around overnight.  As a result Exelon has virtually no coal generation, very efficient nuclear plants, and the highest return on capital of any utility in the business.  As I mentioned above and in several other rants, CEOs report to shareholders.  Shareholders rule.  Profit is king.  I have no problem with any of this except, I think lobbying for government to regulate a competitive advantage for yourself is not something I would do.  Preparing for and reacting to policy, good or bad policy, is fine, and indeed smart business to me.  Otherwise you might find yourself on a street corner with a tin cup. 

BTW, this was not a wild eyed ideologue I was enjoying lunch with, but I did check the facts and what he told me was pretty well right in line with an article by Forbes magazine

written by Jeffrey L. Ihnen, P.E., LEED AP

Porcupine or Super Bowl, I Doubt It

4 01 2011

Although it’s a bit like the chicken and egg, my most important task is recruiting and retaining top talent.  We have a machine in place to land top talent from college campuses.  I’m quite convinced of that.  But with the sort of growth we are undergoing, we also need to recruit staff, primarily engineers at this point, with substantial experience and expertise in energy-using systems.  This would be easy if there were engineers in the market with 5-10 years experience like guys we have in that range.  It isn’t the case.

I work extensively with a recruiter and I provide constant feedback on candidates she forwards to help her better understand what we are looking for.  I’ve also written rambling explanations of what we are looking for.  Sometimes I get concerned that she thinks we are impossible to satisfy.  Well, we are almost impossible to satisfy.

First, a mini rant on recruiters.  I’ve been told by probably three recruiters that they, unlike their competition, will thoroughly vet candidates, ensure they meet our every qualification and then after a few weeks they will present a miracle list of 4-5 candidates all of whom we would just love to have on staff.  They would be so good, we might take two – even if we only need one and then we would be crying because we’d have to turn the other three down.  Fuggedabahdit!  The recruiter’s selling point is that they are supposed to save me time by not having to wade through a few dozen candidates.  Bull.  All this miracle recruiting service does is delay the process because the dream team they present to me has no more usable talent on average than 50 people a neophyte recruiter fresh out of college could find for us.  Give me the 50.

Back to my recruiting exploits; last week I was writing up a two column table for our recruiter, with one column describing what we want and the other what we want to avoid.  In the “don’t bother” column I essentially concluded we don’t want anyone from the competition, which generally speaking is where one should first look.  I’m talking about competition in the energy efficiency program business.

Why is this?  Quite frankly, because the engineering on average in this industry is poor, but it is also poor to a large extent in the systems design industry.  On the other hand, at least in the design industry, things have to be made to somehow work.  They may work like crap and waste energy up the wazoo but at least there is a required problem “solving” element.  In the EE sector, engineers can operate in a parallel universe their entire career – which brings to mind the myth of experience, a topic of another rant.

How do I know the engineering in the EE industry is poor?  Because we do a lot of program evaluation across the country, from east coast to great lakes to the west coast and beyond  – close to 20 utilities in about a dozen states.  Even stuff that a sociologist should be able to pull off is screwed up – like verifying a variable freq drive has auto controls installed, or knowing the difference between a heat recovery wheel for fresh air and a heat recovery wheel for dehumidification unit installed (unit is a god-awful pick for a northern climate anyway – design engineer should be fined, maybe spend a couple nights in jail too).  The latter resulted in a massive incentive for gas savings in a new construction program.  Uh, ouch!

So what sort of experienced people are we looking for?  Smart engineers with high GPAs but not too much experience; generally engineers who understand how systems work, how they use energy, and how they should be controlled – really understand it.  In general, best candidates come from smaller firms where they have interaction with the guy at the top and mentoring by people who know what they are doing.  On the flip side, competition sets up offices in states where they start running programs and they hire “experienced” engineers to work in those branch offices.  All I’ll say is it’s not worth looking at these candidates.  It’s probably as hard as finding a porcupine in my woods – I did experience a real live (and real big!) porcupine in the wild here in cheesehead land so although not impossible I’m not sure whether I’ll see another one or see the ViQueenies win a super bowl in my lifetime.

Why not too experienced?  Because engineers are either good or crappy and if they are good, they care about what their clients think and after being taken to the woodshed a few times for things the client doesn’t like they become calloused cynical curmudgeons unwilling to bend or change.  They play it safe.  This is typically not conducive to saving energy.  Let me know if you need an explanation as to why experienced but crappy engineers are no good.

To be sure, there are definitely excellent engineers in the industry.  We work for some of them as subs.  Others have reviewed our work for program QC and they are very good.  After throwing stones in my glass house I must break a few windows.  Admittedly, we’ve gotten comments back from outside engineering firms that make me think the guy on the other end must think we’re idiots.  However, rather than whining, crying, and denying, we get the things resolved and take long term corrective action.

written by Jeffrey L. Ihnen, P.E., LEED AP

Playing with Fire

9 11 2010

I was pretty much like every other 12 year old boy.  I liked fire, explosions, and crashes.  If you think I’m crazy, why are movies sometimes beginning to end filled with the same?  Enough said.  Growing up on the farm there were always plenty of things to burn.  One time I asked my dad if I could burn an old cattle feeder that we no longer used.  No problem.

You never see these things anymore but they were wood structures, like a weekend cabin that could withstand an F4 tornado, except it was all wood, nails and fasteners – solid fuel.  So I loaded it up with 40 or 50 paper feed bags – like the big dog food bags.  This probably would have been enough to get it going and burn it down.  But I’m impatient and I want a big fire.  So I grabbed a milk jug and put some diesel fuel in it and thought, eh, what the heck.  I’ll go half and half with gasoline.  I knew gasoline was risky.

So I sprinkled that all over the pile of paper bags and lit a bag (there was a door on the end about waste high).  I watched the flame creep up the paper until it got into the fuel-soaked portion of the bag.  That started to burn as I watched and then, Fahwoom!  A giant fireball blew up and rolled me back, bass over teakettle like when I was kicked one time by a cow – which may explain my dementia.  Fortunately, I knew I was playing with fire and I was prepared to backpedal real fast.  All I got was singed hair on my arms, knuckles, and eyebrows.  I got what I wanted though!  It was a hell of a fire.

As I mentioned a while back, I’m an efficiency freak, and not just for energy.  I also get riled up regarding economic efficiency and how it could impact our industry.  There are many things that apply the brakes and throw sand in the gears of the economy but I’ll get to that later.

This week, I want to discuss the Federal Reserve (Fed) rather than energy efficiency directly because the stakes are enormous and I think everyone should know what is happening.  For years and years (forever) there has been a lot of concern about the nation’s debt.  Why?  I would guess that 99.9% of Americans think we will need to pay it off sooner or later and that’s going to hurt like a tooth extraction with no painkiller.  If only.

Last week beneath all the election buzz the Fed announced it would buy $600 billion in U.S. Treasuries over the next six or nine months.  This is on top of the $1.3 Trillion it’s already purchased.  These numbers, by the way, are staggeringly incomprehensible.  See what a trillion dollars looks like.   I did a little “measurement and verification” on this and it appears to be fairly accurate.  Furthermore, companies in the U.S. have a total of $800 billion cash on hand.  So in the end, we are talking 2.5x companies’ cash on hand.

What is the Fed?  It’s a mysterious central bank with twelve regional banks run by appointed egg heads who are accountable to no one.  Typically, these people have spent their entire lives in academia, politics, think tanks – i.e., a parallel universe.  They set the federal funds rate – the rate central banks charge one another for overnight loans.  When they talk about cutting or raising interest rates, this is it.  The Fed’s mission is supposed to be monetary stability; to avoid extreme fluctuations in inflation, deflation and the exchange rate of the dollar.  If you have an interest bearing money market fund or certificate of deposit, you already know these interest rates are zero.  Controlling the federal funds rate is all they normally do, but they are now going crazy.

Real lending rates (personal/business loans) for all of us track interest/yield on federal Treasury bonds.  For example, the 30-year mortgage tracks in step with the 10 year Treasury bond (I think).  The 15 year mortgage tracks the 5 year Treasury and so on.  “Real” interest rates are set by the marketplace by buying and selling bonds and other debt.

Never think you can’t lose money in bonds.  Bond prices and interest rates move in opposite directions.  For example, a thousand dollar bond may be issued at 5% interest.  Consider the $50 payout fixed.  In this simple example, it would pay $50 per year in return for your cash and risk.  When interest rates go up to 7%, the value of your bond drops because it’s paying you only $50 per year and the bond price will adjust to reflect the current 7%.  The value of the bond would drop to something probably in the $70s.  The opposite would occur if interest rates drop.

It’s all supply and demand.  If there is tremendous demand for bonds, the bond price is high relative to the interest rate.  Enter the Fed.

The nearly $2 trillion in bonds the fed will own will be purchased with freshly printed money.  They are buying U.S. bonds with funny money.  Why?  To “stimulate” the economy.  By sopping up bonds like crazy, they get very low interest rates.  The borrower (U.S. Treasury) wants to sell bonds with the lowest possible yield and as long as they have the Fed throwing gazillions at them, it’s easy.

Many of you have probably refinanced your homes at unheard of rates lately as a result of this Fed activity.  That’s great and you should do it but don’t for a minute think the ball-peen hammer isn’t coming around.

Here is the risk.  The huge gamble the Fed is making is artificially driving down the cost of borrowing to spur the economy so people buy stuff.  They hope the economy will get going and people will pay taxes to lower the deficit/debt and have money to invest in U.S. bonds, rather than the Fed doing it all with funny money.

Injecting all this cash into the world economy and “monetizing our debt” is driving down the dollar.  Supply and demand.  More dollars floating around, more supply, means the value declines.  All you have to do is watch commodity prices for the results.  Comparing to a year ago:  Gasoline up 10%, Gold up 23%, Silver up 42%, Copper up 27%, Corn up 55%, Soybeans up 22%, Beef up 13%, Cotton up 117%.  Do you think this escalation is due to supply/demand (although cotton, used to make the greenback is really up)?  No.  They are up in large part because of a weak dollar.  It’s inflationary for us.  You can easily find information on rising food prices in case your trip to the store doesn’t do it for you.

A weak currency is good for trade to a certain extent.  A week dollar generally means a strong yen, euro, franc, pound, etc.  Strong currency means people from these countries can buy American goods for cheap because they exchange their highly valued currency for a lot of our currency and buy our stuff.  The opposite is true for us.  Imports are expensive, which also puts upward pressure on inflation.  This is great until the people buying our debt start to squeal.  Go back to that thousand dollar Treasury bond.  If that is purchased with Japanese yen and the dollar subsequently drops 20% against the yen, the Japanese guy is stuck with crappy dollars so when he cashes out, he gets 20% fewer yen than he would without the devaluing.  Or he can just keep his crappy dollars and hope for the best.

So what the fed is doing is very dangerous.  They are devaluing the dollar.  The Fed can’t keep printing money to buy bonds.  Sooner or later the debt will need to be financed with real money from real investors seeking what has been the safest investment on the planet.  Continuing to use printed money, the currency will continue to fall until foreign investors that are buying like 40% of our debt give us the middle digit and pull out.  Then what?!!  Trillions of dollars will be lying about.  Everyone has cashed out and the U.S. dollar won’t be worth anything because nobody wants them and there are gazillions of them.  Compounding the problem, interest rates will go sky high because the Treasury can’t find people to buy their debt that melts faster than a Klondike Bar in downtown Bagdad on a summer day.  Inflating our way out of debt is easy but devastating.

The Fed and the government have to stop treating employers and investors like lab rats.  We are not stupid.  We can see the lunacy.  And they wonder why they can’t “create jobs”.

I’ll be out buying gold bullion at $1,400 an ounce to hide in an undisclosed location.  Once it takes a grocery cart full of cash to buy a loaf of bread, I’ll be able to buy the bakery with an ounce of gold.[1]


There are other very negative consequences of buying debt with printed money.  First, it takes a lot of pressure off free wheeling congress to control the deficit.  Second, what is the Fed going to do with all these bonds that pay extremely low yields once interest rates start rising?  They are going to lose a gazillion dollars selling worthless bonds, that is if the economy ever gets going.  Who will take that hit?  Sounds a bit like Fannie and Freddie to me.  Taxpayers will be stuck with that bag.

Since we lab rats won’t behave like they do in a text book, things may not pick up for years and years.  See Japan which has tried this for what, 20 years?  They have enormous debt.  Government tried to stimulate the economy about a dozen times.  People aren’t spending due to deflation.  Stuff just keeps getting cheaper as they sit on their cash.  This with the Fed’s activity has dropped the value of the dollar by 15% against the yen since April of this year.

U.S. officials are being lectured around the world about these reckless policies.  The death spiral of 2008 was all due to ruthless, evil banks, we are told.  Well the Fed has had interest rates very low for a long time, in addition to congress pushing home ownership onto people who can’t afford them.  We had a stock market bubble in the late 1990s.  A commodity bubble just before the 2008 collapse and the housing bubble just popped.  Another commodity bubble is building and I would say the late stock market run-up is building a bubble as well.  Stocks are rising as companies are improving earnings by slashing costs – laying off people.  This won’t last as companies have limited costs to cut.

When will these people look at past policies and the ensuing results and learn from history, rather than their bogus theories?  The economy is not like physics where there are laws like gravity, speed of sound, and conservation of energy.  The economy has a huge macro human element.  The most accurate prediction of what will happen can be found by looking back at history.  I remember as I sat on the sidelines in the late 1990s while people were paying insane prices for stocks.  Valuations were far, far outside historic norms.  But we were in a different era.  Sure, Sonny.  The NASDAQ composite has gained minus 50% since then.

Thinking hyperinflation could never happen here is short sighted and dangerous.  Nobody imagined 9/11, the submersion of New Orleans, or last summer’s unstoppable oil spill.  The Fed didn’t prevent the 1930s from happening and they won’t stop the next one either.  In response to the 1929 stock market crash and recession, Hoover did exactly what gave us 10 years of misery; raised taxes sharply to cut the deficit and Smoot Hawley to cut off trade with the rest of the world.  We are trending toward the same thing all over again.  HELLO!

Lastly, I’ve said before that we need a strong economy and demand for energy to have a strong EE industry.  We’ve done ok through this recession but no one will care about EE when the dollar isn’t worth the paper it’s printed on, or we spend the rest of my career in a grinding contraction like Japan.


Back in March I railed against daylight savings time because it doesn’t save energy.   National Geographic referenced reports saying the same.  But one study claimed there was savings: The Department of Energy.  The hell you say!  It saves precisely 0.02% total energy consumption.  This reminds me of predicting CO2 levels by viewing 500 year old tree rings.  The reported precision is about 1000X greater than they can possibly measure or calculate with confidence.  I wonder how many millions of dollars somebody got to build a model that would support the answer they pulled out of the air to start with.

[1] Do not construe this as investment advice.  Roll your own dice at the casino of the Federal Reserve.

written by Jeffrey L. Ihnen, P.E., LEED AP