Not Good Enough
After watching the devastation play out in Maui over the past two weeks I was curious to see what the White Houses response would be. I was surprised by the Biden Administration complete callousness towards the people in Lahaina. To see Joe Biden, our President casually reading a book on some beach in Delaware made my skin boil. How could this man, supposed great healer, take another vacation? I just don’t get it.
Say what you will about George W. Bush, he was talking to the first responders three days after 9/11. He addressed the nation 12 hrs after it happened. There was a man of compassion, humility, honor. President Biden waited two weeks to visit the scorched Earth of Lahaina. He needed a vacation in Vegas? Or wherever he was hiding out.
It just is emblematic of the Biden administration’s direction. That is not a direction I want this country to follow.
There are so many wrongs with this whole picture, I could write three columns about it but I will keep it short.
The micro picture of what happened in Lahaina is simple. Human errors and bad decisions by local authorities had a major part in the spread of the devastation but they are not fully to blame. Climate change is not to blame either. I think climate change policy played just as big a role in this disaster.
It is pretty clear that some sparks from an overhead transmission wire set this blaze a burning. Very similar to what happens in California almost on a monthly basis. Hawaiian Electric asked the state public service commission for the ok to spend roughly 180 million dollars yearly to try and mitigate this problem. The Hawaiian PSC said no. They allowed them 1/100th of the money and continued to press Hawaiian Electric to do more in the way of renewable energy.
This push towards renewables that is being forced on this country has had devastating effects that aren’t readily apparent. If your capital budget has 500 million dollars in it and you know maintenance of the electric grid for safety and efficiency will cost 250 million dollars but the legislatures are forcing you to spend 80% of your budget on renewables, what falls to the wayside? The upkeep and replacement of faulty power lines. So, with a move towards harnessing the sun and wind we risk burning the place to the ground.
Way to go progressives.
As a little aside, I have read in several different places that the amount of pollution and carbon dioxide that has been released so far this year is more than all of the CO2 that we have saved by going renewable. Zero sum game. With lives lost and devastation around the globe.
No matter what I write and no matter what anyone tries to do, this push for renewable energy has it’s costs seen and unseen.
No matter what California attempts to do as far as going completely electric, it will fail. PGE and SCE will never be able to handle the load of energy required to charge 45 million cars, 42 million people and a 4 trillion dollar economy. As they work to build solar farms and wind farms, they will let the grid itself go into disrepair and hope they have some luck as far as weather is concerned.
For the 50th time I am not against creating a robust solar and wind energy strategy but I think that it will have to work hand in hand with Natural Gas, and Nuclear power. Until there is some massive breakthrough in fusion energy or creating much more efficient solar panels, thats the only way to go.
Now, back to business. This week is the getaway of all getaways for the elite economists and The Federal Reserve. It’s the 3 day symposium at Jackson Hole Wyoming. The highlight, of course, should be Fed Chairman Powell’s speech. Last year was a quickie and I think this may be a little longer.
Chairman Powell has at times been very blunt and to the point and at times been vague and elusive so I am hoping he will be the former.
The economy is in much better shape than anyone expected. The job market is strong, consumer spending is strong and while inflation is around 3.4% it is leveling off and coming back to Earth.
One thing that I think the Fed should do is up their accepted inflation rate to something like 2.5% or a tad higher. I think we could all live with that range and be able to survive quit nicely in the long term. Wages are catching up to inflation and corporate profits still seem to be pretty good (not great).
Will there be a rate hike in September? I highly doubt it. I think the Fed if they wanted to could halt these hikes indefinitely and things would be just fine. Mortgage rates are spiking up though and that does concern me. The bonus of that is that home prices have come down a touch from stratospheric levels so at the end of the day, you buy a cheaper house with higher interest rates and wait for the rates to come back down and refinance.
For the next 3 months I do think we need to keep an eye on the housing market and see if it soften too much. That is a recipe for a recession. I don’t expect that though.
As far as the market is concerned, I am still looking at the S&P to close at 4600-4650 at the end of the year. Roughly a 20% bounce from last year.