Bucyrus's last posting makes me think of business growth in another way. All businesses begin at point A and move forward through stages. At each stage there is a shifting of gears, so to speak; to promulgate progress. That "shifiting" get one to the change but not without a short pause, a brief period of confusion and dissarray, and then steady movement to the next shifting point. It happened as the Industrial reveloution supplanted agriculture, as railroads succeeded canals and dirt roads, as the personal moter vehicle supplanted the railraods, as steam gave way to diesel, etc....each business has these "shift" points as does overall progress of any endeavor. As does the society and commerce of the United States. We are at one of those shift points with the need for safer environmental controls. In the long run it will be better for individuals as well as business: both with thrive with time, just not like we've become comfortable with. Its change, its somebody moving the cheese. Change is inevitable (except from vending machines)! We have lived with constant change since July 4, 1776 and we will live with more constant changes after July 4, 2009.
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Bucyrus (and others): I acknowledge what you're saying. This thread has not crossed that line. I'm just asking that we stay on course. In the past, discussions like this start well, as this one has, but evolve into the *Hatfields & McCoys*, and "So's your mother" hissing match type threads. I think you'd agree, that once a thread hits that point, all the positive, thoughtfull discussion is over. Therefore, I ask- can we please keep this thread on the up & up? Thanks-Norris
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding Fellas- can we please try to keep this on-topic (Energy Bill's Impact on the Railroads), so it doesn't drift into troubled areas of politics? Thanks
Fellas- can we please try to keep this on-topic (Energy Bill's Impact on the Railroads), so it doesn't drift into troubled areas of politics? Thanks
I am not sure where the line is drawn in this thread between politics and non-politics. Nobody has named politicians or mentioned a political party. However a person believes the bill will effect railroads depends on what that person believes about the greater, overall effect of the bill. You cannot opine about how the bill will affect the rail industry without doing so through the prism of how you view the bill. And there is great controversy about the bill with it being perceived by the public in generally two diametrically opposed ways:
1) As proclaimed by the proponents, the bill will usher in a new era of economic prosperity by forcing the country away from the carbon energy based economy and into a clean, efficient, renewable energy based economy.
2) Contrary to the proclamation of the proponents, there is no market for the new renewable energy economy because of its higher cost, so it will require a public subsidy by taxpayers in order to create an artificial market. The burden of paying this subsidy will severely depress the economy. The promise that this will lead us to prosperity sounds like an economic perpetual motion machine.
Are these two viewpoints political expressions or are they merely expressions of economic and scientific analysis?
Is one view a political expression and the other not? If so, which is which?
Call me a pessimist-I prefer realist- but this is the world I see after C&T (it is a tax bill with energy being the means not the ends):
If this C&T bill becomes law, today's economy will be the new normal at best. Every consumer, rich or poor, will have less discretionary income. Less discretionary income for consumers means less freight for the railroads.
As I stated earlier, the total consumer spending will not be reduced per government stats. The taxes hidden in every item purchased by consumers as a result of this potential legislation will mask the reduction in sales of discretionary items consumers otherwise would have bought with that $100-200 per month.
Coal will be the proverbial frog in the warming cooking pot. At first the railroads won't notice the effects but over time that stalwart of income will be reduced significantly. What will replace it?
Without that volume of coal business, the overhead costs for railroads will be be split over fewer total carloadings thus driving up rates for grain, aggregate, intermodal, chemicals, garbage, plastics, etc.
Hauling people will not be the answer. Hauling hineys has never been a long term profitable venture for railroads or any other form of transportation for that matter except in very niche markets.
I don't think we have been off topic as far as railroads are concerned. Any time in history other than war time, reduced discretionary income for a population has always resulted in reduced traffic for railroads, airlines, buses, pony rides at the county fair, or any other form of transportation.
Jay
henry6 Americans have always been able to pick and choose their welfare recipients depending on religion, politics, and geography and tell a convinceing story that it is good for the country because it is for defense. Or for holding down prices for the little guy. Or for holding up prices for the farmer. Or for making it possible for businesses to move products to their consumer. The list goes on, but it is all pick and choose for the current purpose, to be paid for later; rationalizing, thats all it is. And it always has been done. We go either far to the left or far to the right, but never enough in the middle.
Americans have always been able to pick and choose their welfare recipients depending on religion, politics, and geography and tell a convinceing story that it is good for the country because it is for defense. Or for holding down prices for the little guy. Or for holding up prices for the farmer. Or for making it possible for businesses to move products to their consumer. The list goes on, but it is all pick and choose for the current purpose, to be paid for later; rationalizing, thats all it is. And it always has been done. We go either far to the left or far to the right, but never enough in the middle.
I don't follow what you are saying.
henry6New government initiativs are not stifling free enterprise but rather increasing it. The green movement has spawned a lot of new industries and services; even older businesses and industries have found economy and safety (also leads to economy) in this "green" invironment. And if we are so hell bent for eliminating government interference in business and industry, why isn't there a cry to eliminate agricultural subsidies, price supports, even food stamps (which is an agriculture subisidy)? Why not get rid of the Federal Communications Commission, the Federal Aviation Agency,....any agency which funnels money into any special industry? Forget about R&D for aircraft for the military, have the manufacturers bring their blueprints and the government buy off the shelf? How far can I go here.....to make my point. Either the government is or it isn't. It is what we've made it, how do you undo it and still continue to progress?
New government initiativs are not stifling free enterprise but rather increasing it. The green movement has spawned a lot of new industries and services; even older businesses and industries have found economy and safety (also leads to economy) in this "green" invironment.
And if we are so hell bent for eliminating government interference in business and industry, why isn't there a cry to eliminate agricultural subsidies, price supports, even food stamps (which is an agriculture subisidy)? Why not get rid of the Federal Communications Commission, the Federal Aviation Agency,....any agency which funnels money into any special industry? Forget about R&D for aircraft for the military, have the manufacturers bring their blueprints and the government buy off the shelf? How far can I go here.....to make my point. Either the government is or it isn't. It is what we've made it, how do you undo it and still continue to progress?
Believe what you want, but who do you think is going to be paying the new cap and trade taxes? Some may think the businesses are, but 100% of the increased taxes from C&T will be passed on to the consumer who happens to be us.
Maybe for you it won't be an issue, but for most Americans an increased cost of living will affect their spending. An additional $100-200 of hidden taxes, i.e. cap and trade passed down costs, per month will mean they no longer have the choice of braces for the kids, a vacation or railfan trip, extra Christmas presents,--heck even a new model railroad item.
This is a direct influence on our economy. It won't show as decreased consumer spending in the government stats but it will have profound affects on companies selling products that the consumer no longer has the option to purchase because of the increased cost of living from the C&T taxes.
The federal government has constitutional mandates. Defense is one of them. I have no problem with most of the money spent protecting our freedoms. It is when the federal government oversteps its mandates that I have a problem.
There have been cries to eliminate or drastically reduce everything you listed. But in the nanny state society we have become, they go unheard.
But who cares-- when it is going tobe our children and grand children paying the tab. I am sure they will be happy to have their tax freedom day moved from mid-April to September. Everyone can live on 1/3rd of their salary.
henry6And if we are so hell bent for eliminating government interference in business and industry, why isn't there a cry to eliminate agricultural subsidies, price supports, even food stamps (which is an agriculture subisidy)? Why not get rid of the Federal Communications Commission, the Federal Aviation Agency,....any agency which funnels money into any special industry? Forget about R&D for aircraft for the military, have the manufacturers bring their blueprints and the government buy off the shelf? How far can I go here.....to make my point. Either the government is or it isn't. It is what we've made it, how do you undo it and still continue to progress?
I think that is a false characterization of the position of those who oppose cap and trade. For the most part, they are not asking to discontinue all government involvement with the business of the private sector. All they are asking is that we don’t go ahead with cap and trade. While they might be opposed to expanding the role of the public sector, it is a matter of proportion that makes cap and trade so objectionable. Ag subsidies, food stamps, F.C.C., national highway programs, space program—the effect of these things and everything else all added together are chump change compared to cap and trade and the effect it will have on our economy and standard of living.
henry6But Jay, you're proving my point: the government deveoped the projects and payed the private enterprises to do the work, i.e., the catylist. And the Wright Bros. falls outside of this discussion as does Henry Ford, John Stevens, and Robert Foulton for that matter. You are comparing apples to oranges.
But Jay, you're proving my point: the government deveoped the projects and payed the private enterprises to do the work, i.e., the catylist.
And the Wright Bros. falls outside of this discussion as does Henry Ford, John Stevens, and Robert Foulton for that matter. You are comparing apples to oranges.
Only helped prove your point in a small number of government actions. The vast majority of what the federal government does today is the stifle the free enterprise system.
The government may provide the catalyst in certain instances, but they also retard an even faster result with regulation. Sort of like driving with your foot on the accelerator and brake at the same time.
Why do you think there are so many US assets, i.e. corporate profits, that never see the light of day within the US proper?
The Wright Bros do matter, without their development of the first step in manned aviation, there is no further advancement. This big step was privately done.
garr Unfortunately the environment has become the free-pass for the anti-capitalist in our society. "It is for the environment" seems to have replaced the old mantra of "It is for the children". Whenever I hear either statement from the government or anti-capitalist my suspensions are raised about the true motive of the proposed legislation.
Unfortunately the environment has become the free-pass for the anti-capitalist in our society. "It is for the environment" seems to have replaced the old mantra of "It is for the children". Whenever I hear either statement from the government or anti-capitalist my suspensions are raised about the true motive of the proposed legislation.
The "Green" movement: *Soccer moms and dads driving their three-ton Land Bruiser to the environmental rally; *Buying ten pounds of red meat at the grocery store then putting all that meat in a "environmentally-friendly" shopping bag; *Watching reality shows on their 60" hi-def tv, while the a/c is cranked to 70 degrees, and lighting the house with "eco-friendly" flourescent bulbs;
Acting as a catalyst is one thing, but forcing a mandate for which no market exists or funding that mandate with public money is an entirely different thing. The electric car in general, falls into the latter of the two choices. So do much of the renewable energy mandates.
However large or small the market is for an electric car, the private sector will fulfill that market perfectly by building electric cars with its own capital investment. There is absolutely no need for the government to be involved with mandates and public funding. Their participation will only drive up the cost.
Another example of the government acting as a catylist was the electric car. Vehicles like the GM EV1 and the Toyota RAV4 EV only came about because of California's Zero-Emission Vehicle mandate. If CA had stuck to their guns and not repealed the mandate (And allowed those innovative cars to be taken away from their owners and crushed), we'd be well down the road to energy independence by now.
Modeling the Pennsylvania Railroad in N Scale.
www.prr-nscale.blogspot.com
henry6 As for the government as a catylist, I forgot to mention, way above someplace, that the airline industry, has been manufactured by government armed service contracts and reasearch and development. The airline industry and others have also gained by the research and development of the space program.
As for the government as a catylist, I forgot to mention, way above someplace, that the airline industry, has been manufactured by government armed service contracts and reasearch and development. The airline industry and others have also gained by the research and development of the space program.
I agree the government did a speedy job with the space program, but did the government fund the Wrights when they were developing manned flight in the bicycle shop?
The government did a good job with the interstate highway system which was funded as it was built, but it took contracts with private companies to do the actual construction.
I firmly believe America is great because of our freedoms, private enterprise, and private ownership of property -- not because of government(other than the form, a representative republic, that we have). Remember, every law that is passed has freedom limiting aspects to one side of it.
But for an organization with trillions of dollars of debt, there are few great efficient success stories. The old adage that an organization gets dumber as it gets larger is definitely illustrated with our federal government. Remember the ICC? Read "Brosnan, The Railroads' Messiah" to see some of the fights over that brilliant organization.
As far as being an inhibitor, why has it been over two decades since a new nuclear electric plant has been constructed in the US while European countries are enjoying the benefits of nuclear plants constructed during that time?
Ask some of the land owners who have fought the government over developing their property only to be told that a hole the landowner dug which happens to hold water is now a wetland or that rat which happened to take residence on ones land is endangered.
Bernie Marcus, the co-founder of Home Depot, has stated that with today's government it would be impossible to do what they accomplished in the late '70s and early '80s in the embryonic stages of Home Depot.
The real problem of moving jobs off shore is that leaves fewer and fewer able to buy the products our investment oriented big business people proport to be manufacturing. I have always said you need as many keys to the executive washrooms as you do to the janitor's closets to make an organization work efficiently and effectively. Workers cannot work and earn money where there are no jobs, therefore cannot purchase anything in the economy. But investors cannot earn a return on the investment if nobody is earning enough to afford their product or service. Once either labor or capital become more powerful, more in control, than the other, the house caves in on itself. Greed is has been in both parties of this equation. But so have marks of progress.
Now, although it is an amendment to the Transportation bill, congressmen from a Maine and California have introduced an amendment which will allow 97,000lb trucks on our interstate highways taking away the value of private enterprise investment of the railroads in interstate commerce. This is not a good energy move, not a good safety move, and certainly not one in favor of private investment unless you include the Highway lobby's investment in congress!
Bucyrus:Well stated. This is the tip of the iceberg. Lets all change our light bulbs and everything should be ok. OK? Well, perhaps not.
ed
MP173 Bucyrus: You are making a leap of faith here. It seems the assumption is that a company will move it's manufacturing offshore or remain here. There is nothing to guarantee that the domestic company will remain in business here. That is the great divide which requires an enormous amount of faith. Another provision which I heard today was that if you sell your house, it must pass a government test which insures the house is properly weather proofed. What happens if it doesnt pass the government test? Who determines the factors for the testing? My house has something like 48 windows. It is nearly 100 years old with many of the original windows that are part of the architecture of the house. Energy efficient? No. However I compensate by burning wood and by keeping the thermostat at 60 degrees during several months. Then, during the summer the 48 windows provide natural cooling. My guess is my energy consumption is quite similar to other houses, but if I dont sell me house soon, I will be penalized, probably severly (moving is in my plans). Again, I would strongly recommend that anyone listen to the January 8, 2009 interview with then Candidate Obama. ed
Bucyrus:
You are making a leap of faith here. It seems the assumption is that a company will move it's manufacturing offshore or remain here. There is nothing to guarantee that the domestic company will remain in business here. That is the great divide which requires an enormous amount of faith.
Another provision which I heard today was that if you sell your house, it must pass a government test which insures the house is properly weather proofed. What happens if it doesnt pass the government test? Who determines the factors for the testing?
My house has something like 48 windows. It is nearly 100 years old with many of the original windows that are part of the architecture of the house. Energy efficient? No. However I compensate by burning wood and by keeping the thermostat at 60 degrees during several months. Then, during the summer the 48 windows provide natural cooling. My guess is my energy consumption is quite similar to other houses, but if I dont sell me house soon, I will be penalized, probably severly (moving is in my plans).
Again, I would strongly recommend that anyone listen to the January 8, 2009 interview with then Candidate Obama.
Ed,
I did not mean to make the leap of faith you suggest. Sorry if I was not clear. When I was talking about companies either staying here of fleeing the cost of cap and trade, I did not mean to exclude the possibility that some will go out of business rather than staying or fleeing. Indeed, going out of business will be an inevitable consequence of cap and trade for some companies. It may be that the cost of fleeing cap and trade will be too high to justify them fleeing, while staying will price them out of their market. Or it may be that import tariffs will prevent them from fleeing cap and trade, while staying will price them out of their market. In either case, they will go out of business or re-organize to shrink their business. Consumers will simply abandon the consumption of certain products or find substitutions rather than pay higher prices imposed by cap and trade.
And yes I have heard about the provision mandating that your house pass a federal test of energy efficiency before you can sell it. This is just the tip of the iceberg of what is intended in re-ordering our society in the name of sustainability. It is neatly summed up in stated goals to reduce CO2 within certain timeframes. But to actually achieve this will require heavy lifting that is far beyond what the average consumer expects. So far, it has been made to appear painless—a little weather-stripping, a little more efficiency in our appliances, different light bulbs, and problem solved. But these little measures do not begin to match the sacrifice that will be required to meet the CO2 reduction targets that may soon become law.
I cannot cite the source at this point, but I have heard that the bill includes provisions for tariffs on imports of goods made by manufacturing that will be moved off shore in order to dodge the carbon caps in the U.S. So the bill itself anticipates causing manufacturing to flee the higher manufacturing costs that the bill will impose, and the bill closes that loophole by the use of import tariffs to cancel the economic advantage of leaving the country to flee cap and trade. So whether or not there will be sufficient economic incentive for manufacturing to flee cap and trade, the point might be moot if import tariffs cancel out that incentive.
Manufacturing was allowed to move off shore in order to pursue lower labor costs. But the point of cap and trade is to reduce our carbon footprint, and apparently it will not be acceptable to simply move part of that footprint to another country and continue our consumption at normal levels. Instead, manufacturing will be forced to stay here, pay the added cost for carbon credits, and pass it along to the consumers. Consumers will thus reduce their consumption due to the higher costs. That, after all, is part of the basic point of cap and trade.
Henry:He had a labor savings of 67% by having it produced overseas. That is serious $$$$.
President Reagan didnt kick the union out of the towers....they called a strike which was illegal. He enforced the law.
If the reasons for moving work off shore were only because of labor costs, however! There is also taxes, facilities, energy, transportation and the need to make an extroadenary high return on investment (I know a guy who patented a device, engineered it here, etc. Could have had it manufactured here for 3 bucks but sent it overseas to get it done for less than a buck. He still charged his aimed for retail price at $10) and quickly. Labor is a neat target which is no longer a threat. Since Royal Ron kicked the union out of the control towers, labor is not the force it once was, and therefore should no longer be the whipping boy for the Greedy Old Patriarchs!
Great point regarding India and China not signing up. They have said to our diplomats...dont mess with OUR industrial revolution. It doesnt hurt their cause when they are sitting on a large amount of our treasury debt.
President Obama recently indicated he is against tariffs on imported goods which have been produced in co2 emitting nations such as China. Ok...where is the leveling of the playing field?
My guess is the enormous amounts of tax revenue generated by this bill will be used to pay for health care reform.
Paul_D_North_Jr And - if the business goes overseas, it's certainly going to release CO-2 just as much - if not more, plus different pollutants as well - as it would have here. So viewed world-wide, what will have been gained [Q] Same amount of CO-2, just in a different place - but it's a global phenomenon, and the air currents and wind patterns will bring it back here anyway before too long.
And - if the business goes overseas, it's certainly going to release CO-2 just as much - if not more, plus different pollutants as well - as it would have here.
So viewed world-wide, what will have been gained [Q] Same amount of CO-2, just in a different place - but it's a global phenomenon, and the air currents and wind patterns will bring it back here anyway before too long.
The greater objective of cap and trade is that it be international in scope. Indeed, whatever embodiment of the concept that becomes law in this country will inevitably become linked to other countries either at the outset or soon thereafter. But we are a long way from agreement on worldwide participation. That raises this question that is essential to ask if one is to fully understand the cap and trade concept and its objective: If cap and trade is beneficial, why do whole countries such as China and India refuse to participate?
Paul_D_North_Jrseparate the CO-2 from the exhaust gases and make something useful out of it, like bricks -
BuckyBall bricks?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
BucyrusIf manufacturers are motivated to move their business offshore to avoid higher domestic labor costs, I don’t see why they would not be likewise motivated to do so to avoid the domestic cost of carbon credits.
Scale. Labor cost difference is big % of value added. CO2 taxsmall. Labor cost differential will determine manufacturing site much, much more than CO2 tax. It may tip the balance for some, but it won't be the driver.
But the jobs and business tax revenue will be gone, and the economy damaged to some extent as well. How that affects the railroads will depend on the business and its raw materials and finished products.
In some instances, this kind of result has been called a 'race to the bottom', or 'to the least common denominator'. Unless something is done pro-actively so that there practically isn't any other place for a carbon-emitting business to move to to escape whatever is put in place here, then we're vulnerable to that. But it will take a lot more understanding and analysis than we have space for here to get a handle on all of that.
Finally, keep in mind the points mentioned above regarding our forebear's experiences 150 years ago or so. They thought whale oil was the only possible source of light - then petroleum - kerosene/ naptha became possible - then electricity was discovered, and the light bulb invented. All it takes is for some genius to figure out a way to use the Carbon in the coal some other way than burning it = oxidation = combining Carbon with Oxygen to make heat plus CO-2, and/ or to sequester = separate the CO-2 from the exhaust gases and make something useful out of it, like bricks - - and this will be the problem that was. Until then - who knows [Q]
- Paul North.
If manufacturers are motivated to move their business offshore to avoid higher domestic labor costs, I don’t see why they would not be likewise motivated to do so to avoid the domestic cost of carbon credits. In either case, the motive comes from the need to be able to compete with foreign-based manufacturers who are not hampered by our labor or carbon credit costs.
There are also business costs that rise from moving operations offshore, so a business must weigh that against the lower costs offshore such as labor costs. If domestic labor costs were to rise here, it would further tip the balance in favor of moving offshore, and more businesses would do so. Likewise, if you add carbon credit costs to manufacturing, it will tip the balance in favor of moving offshore, and more businesses would do so.
Certainly this cap and trade bill will be a powerful motivator that will result in businesses moving their manufacturing to countries which are exempt from such economic burdens. I do agree that there are some types of business that will not move offshore because it would not be practical and/or the added cost would outweigh the savings from lower labor cost and avoiding cap and trade. But I am sure that there is much business remaining in the U.S. that will find it economically attractive to leave, and will do so, once this new carbon credit burden is applied here.
When manufacturing moves out of the country, we lose manufacturing jobs. When that happens, it lowers peoples' standard of living and they lower their consumption. When that happens, it eliminates the need to transport those things that are no longer consumed.
Date: ca.1835 Note to Congress from the canal companies:
Government! do something to stop these railroads. If they succeed we may be out of business! That would be the end of the good ole' US (or is it "us"?) if we allow them to continue building into our communities, hauling freight and passengers at ungodly speeds. Just what will happen to the US economy if there are no canals? The rails will bring criminals into our towns and pour soot and fire thoughout the land! God created water for us to ride on, if He wanted us to ride trains he would have created track! Canals are doomed if the railroads are not stopped.
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