Were the problems with the economy caused by deregulation?

I think it has more to do with greed than deregulation.

There are a few issues in the economy that have caused the downturn, but they’re generally related:

-In the last 10 years, overseas investors have put pressure on investment banking firms to give them somewhere new to invest.
-Banks respond by pushing mortgage backed securities. Tons of them.
-Virtually anyone is able to get a huge mortgage, often without proof of employment. They tend to choose (initially) adjustable rate mortgages, which have lower interest rates for a year or two, then they start rising.
-People became unable to pay their constantly-rising interest rates, which spiralled in the last several years, and so defaulted on their loans.
-A gazillion foreclosures started happening, and they haven’t stopped, but have slightly slowed.
-Banks and investors get majorly burned, as they fronted billions of dollars for houses that people couldn’t pay.
-The government buys up these debts, and invests in the banking system to get the banks to start lending again.
-They don’t start lending again, but instead use the money for internal purposes.
-Even people with great credit can’t get loans, and so can’t buy cars unless they have the cash. So they don’t buy the bloated, gas guzzling, shoddily made junk that Ford, GM, and Chrysler are hocking.
-U.S. Government gives automakers one more chance.
-Today

So, there’s a long chain of events with a lot of repercussions. Deregulation is associated with the earlier stages of the crisis, specifically, banks pushing subprime mortgages, and denying almost nobody. That is sort of the first card in the house to fall.

I know that, even though I typed a lot, I probably didn’t satisfactorily answer the question. But that’s because the question doesn’t have a yes or no answer.

There will be a lot of articles in the coming years trying to pinpoint the one thing that caused this recession. None of them will be exactly right, but it sure does sell magazines. It is never just one thing that can be identified as causing this recession. By now it should be clear that a lot of industries are linked together. Part of the car company’s problems was yes, they were making cars that people did not want to buy, whereas Toyota or Honda have been putting out cars that specifically target the market (such as the Prius or the Fit). But that’s not the only problem with the North American car industry. A big problem is that because of the United Auto Workers union, these employees get paid and compensated way more than non-North American car companies do. One part of it is that the NA companies have to pay for health insurance and health costs in the United States, whereas many of the non-NA ones don’t due to their countries having forms of social health care. But one of the biggest problems with them now is not that people don’t want to buy their cars, but people simply cannot, as the car companies’ financing divisions which fund about 70% of car purchases have not been given loans from the big banks, so now one needs to have a very high credit score to buy a car with their financing.

I do agree that the States is in for a dramatic change in the next few years, and things won’t be peachy keen for the duration of this time. I’m confident that retooling industries now will make for a stronger tomorrow… simply because that’s the only option there is. If the auto companies die, a lot more than only the car manufacturers will go down. I wonder when we’ll see the RIAA heading in to Congress to plead for a bailout due to people not buying music with the no money they have…

I think you can trace the automobile problem to deregulation, too, at least in part. The failure of government to tighten CAFE standards (mileage standards) allowed the auto industry to continue to focus on high profit margin gas guzzling vehicles (pick-up trucks, SUVs, etc), and put efforts to improve efficiency on the back burner. When the gas prices soared, the US auto industry was left without a leg to stand on.

Regulations can create a climate where people are careful, or where people take huge risks, because there is no reason not to. This affects every single sector. For example, environmental regulations were effectively gutted, because the Bush administration just used rule writing to do it. They lost every single case brought to court where people were saying the laws were not being enforced, but meanwhile, industry was free to dump as much carbon and many other pollutants into the air and water as they wanted. The EPA wasn’t going to enforce the law. This is effective deregulation.

Whether it’s contracting out (started before Bush—in the Reagan era, but continued by Clinton, too), agriculture, parks management, education, or whatever, the philosophical approach of conservative governments has lead to reduced regulations, which has lead to the current economic crisis. There are probably many more bomb shells to come in other industrial sectors.

I’d like to add that Clinton was no friend to regulations or liberals either. Indeed, Obama, for all the press he gets, seems to be fairly conservative. His appointments seem to be very conservative, and I was never much impressed with his platform, especially on health care. Then again, I don’t think any American politician has the cajones to try for the only reform that will make a difference: single-payer.

There is one aspect to deregulation in reference to mortgages that is the fault of the American people. That is just because some bank or mortgage company says you can afford something doesn’t mean you can afford it. Each of us is responsible for our own budget and we should know what we can afford and what we can’t.

When we purchased our house the mortgage company pushed and pushed and pushed for us to take an ARM (adjustable rate mortgage). I said no (at first just no, then No!, and then NO!!!) in the face of increasing insistence on their part. I knew what I could afford and, while a 5 3/4% rate was great, in two years it would shoot up to who knows what. I opted for a 6 1/2% mortgage because I knew we could afford it, and when things did go well for us I paid it off early.

The mortgage company also tried to get use to buy more house – again I had to say no because I knew what we could afford better than the mortgage company did. I have seen neighbor after neighbor get into trouble because they believed what the mortgage company said rather than their own income.

My point is that deregulation of mortgage loans allowed temptation to be dangled in front of banks and consumers both. However, the presence of temptation does not require one to give in. Hence, “lack of moral fiber” is a major contributing cause to our problems.

Personally I am not a fan of government regulation such as mandatory mileage standards, etc. I am a fan of the free market. Toyota knows that gas is limited and expensive especially in Japan, and that consumers are leaning towards more efficient cars, so they don’t produce Hummers, they produce cars that the market wants such as the Prius or the Yaris. They also sell them at a price that consumers can afford or can attain with reasonable credit requirements. Companies that manage themselves well and truly produce what the market wants succeed, those that don’t, fail…. or get a bailout to try and catch up with these industries.

One true fact is that the Big Three auto companies purposely chose to focus on making expensive minvans and SUVs during the past decade, whereas the foreign car companies continued working on their already-existent economically priced efficient fuel cars. I do not think that the foreign companies who have been so successful with their business model should be penalized by means of the government supporting the companies that chose the wrong business model. In the rest of the business world this is competition, it’s the way of life, some businesses die and some get stronger. However I do recognize the impact that letting these car companies die would have on both America and Canada. But even though I myself drive a Pontiac and thus would probably be screwed if GM dies (no mechanics to repair my car, no parts to do so, I’m forced to buy a Toyota/Honda car when mine dies which is soon), I still support not providing taxpayer money to dying companies.

Darwin raises a great point about lack of moral fiber. I think it’s a fair statement to say that many people buy a new car out of choice or features or style rather than out of necessity such as their previous car dying. It’s the same with houses, and clothing, and shoes, and furniture, and everything else – why buy something that suffices when I can buy something that excels and makes me look good! In part this mentality has been enabled by the availability of credit, in part it’s due to people being seduced by advertising, in part it’s due to the current culture that values bling and new, amongst other parts. I just got a call yesterday from a credit company asking if I had gotten their recent extended offer of $4000 credit, and “was I sure I didn’t need to use it for the holidays for extra presents?” said in a really pathetic voice. But I live within my means, so I said “yes I got it, no I don’t need the money, yes I’m sure”. Could I have used that $4000? Hells yeah, I’ve been wanting an iPod Touch and that could easily get it to me now! But I know that I don’t have money to pay it off soon, and that my impulse purchase now would end up costing me more money in the future, so I don’t give in. If more people had this mentality instead of the “oooh credit card I need a shiny new thing NOW!” mentality, I’m sure the world would be a better place, if not at least smarter.

Just so you know, I don’t support the auto industry bailout, either. Bankruptcy is not all that bad. Employment is going to be lost at the car factories whether they are bailed out or not. Bankruptcy would allow them to renegotiate contracts they shouldn’t have agreed to in the first place. The unions are against this, and support the bailout because it is the only way that UAW member wages and benefits can be preserved. I think this is the only real reason the bailout is in play. The rest of it is rhetoric.

I certainly agree with most of the comments above, and maybe I am just rephrasing them…

Deregulation in general has ushered us into the global economy. It is necessary (in most cases) in order to play in that economy (without subsidies). In some industries, that puts the American worker in direct competition with foreign workers. When that occurs there is a “leveling” that must take place in wages and benefits (and number of jobs and other factors) between American workers and their foreign counterparts.

In the general excitement over the promise of expanded markets in a global economy, I don’t think that the average American worker has ever realized this fact. I don’t think that they realize it yet, perhaps don’t want to realize it.

@dynamicduo – Actually, I must point out that while Toyota has produced the Prius, it also has been selling the Tundra ( http://www.toyota.com/tundra/index.html ) which is a monstrous pickup truck every bit as large as anything the Detroit three put out, and the Land Cruiser ( http://www.toyota.com/landcruiser/index.html ) which is in the same size and price range as the Hummers and Escalades.

I had no doubt they would be selling models like that – after all, NA consumers did want that type of car up until gas prices skyrocketed and the eco-movement got very loud, why ignore the target market. And there are of course legitimate uses for four-wheel drive cars, such as in the northern parts of Canada. It makes sense for a car company to have a fully fleshed out variety of offerings. My instinct is to say that these big cars produced by Toyota would adhere to the high standards and production effort seen in all other Toyota cars. There’s also a point to note that Toyota has never had an unprofitable year and has never laid off an employee, they can afford to take the risk of offering these cars (and according to this article they have already slowed or halted production of some of those models).

But the fact remains that Toyota didn’t only offer this style of car to consumers, they offered other cars that were appealing to consumers, whether due to a low price point, the marketing, the brand loyalty to Toyota, the features including mileage, etc. Why is it that Chevy didn’t speed up the development of their Volt offering when they saw how successful the Prius was? Only the chairmen really know. Maybe it’s simply the case that they just can’t access the battery technology that other companies can.

Regardless, it seems though that the carmakers will be given loans, although not as much as they were pleading for before and with more rules and restrictions. So they have a few years to shape up, try to catch up and regain their brand loyalty… a tough job, but not impossible if they work together.

It’s not just that people can’t pay their mortgages. The banks also packaged up the mortgages and sold them as investments to other entities (banks, people, 401k funds, etc.) in ways that were novel and didn’t really make the buyers aware that they were investing in really, really risky securities. The way that the banks did this was probably the least regulated of the activities in which banks engage. This spread the damage out around the world, so many economies are failing, and many of the sectors of the economy that didn’t think they had anything directly to do with banks.

If these securities had been regulated more effectively, they probably would not have been sold with such abandon, localizing the damage to some extent. As such, a lack of regulation is one cause (among many) for the meltdown, but not the only one.

Adam Smith’s theory of the invisible hand controlling the market-“Each individual strives to become wealthy “intending only his own gain” but to this end he must exchange what he owns or produces with others who sufficiently value what he has to offer; in this way, by division of labour and a free market, public interest is advanced.”-does not take into account that individuals will seek advantage through unethical and even criminal activity.

The purpose of regulation is to level the playing field so cheaters have less opportunity to take advantage of those of us who play fair. For example, there are regulations against corporate execs buying and selling stock based on information unknown to the general public.

There have been reultion regarding how banks can lend money so that mortgages given from my savings would be repaid and my money would be saved. However since financial entities make money (loan fees) by writing those mortgages and do not have to recognize the risks they are taking, they will put my money at risk.

If we do not have regulation to protect the little guy, we will go back to keeping our savings under the mattress and the flow of money will dry up along with the economy.

Ah, yes…The Invisible Hand

I would not say so much by deregulation as under-regulation. Most economists are blaming this on loose credit – subprime mortgages – but it cascaded into the financial markets because of the hideous amount of money invested in derivatives, which are relative newcomers, and have not been scrutinized by the SEC. You can thank the Bush Administration for that.

Ah, yes… the Invisible Hand

actually Rex we have reduced regulations as well as not enforcing current regulations. There are regulations on the creditworthness of borrowers from banks. These regulations were circumvented by financial institutions with the bundling tactics and tricky mortgages. Also mortgage brokers cheated by not being diligent. And “small govt” politicians made sure ther were not enough auditors to keep things honest.

It is amazing to me that nobody brings up so-called “Free Trade”. We’ve moved 20 million manufacturing jobs out of the USA in the last 10 years, and those were replaced with Real Estate related jobs (how did that turn out for ya?) and now those are gone. We went from one Bubble (NASDAQ) to another (Real Estate).

Now the party is over, and all there is left are a couple of dried out “Lil Smokey Weiner’s” and a half empty bottle of Zima—that is what is left of your American Dream, more like, Debt Prision.

Thank Reagan for beginning this deregulation orgy. He deregulated S & L’s. Then with all the union bashing—we will be on an economic par with China and India within 20 years. Our standard of living will lower to meet theirs, there standard of living is not rising to meet ours.

What can a nation of service related industries expect as far as decent wages?

And yes Rex, you’ve nailed in on Derivatives, wait until next year and the Dow is at 5000…..

Mizuki: Always the low price. Always. ;)

@laureth – this just in

Tee hee! It’s like WikiOnion.

It’s funny, the more people say, the further you seem to get from the truth…by that I mean the most succinct and accurate answer so far has got to be jessturtle23’s answer. It is greed that causes the problems. But not greed in and of itself, because greed also causes our prosperity (when we are fortunate enough to be living in more prosperous times). It is unchecked, or “unregulated” greed that is at the heart of our current mess, in my opinion.

Here’s what I mean. The US has a lot of natural resources, but we do not have vast oil reserves, diamond mines or huge veins of gold. We have mined a great deal of wealth from the land, but much of our prosperity comes not from the resources we have, but from our free market economic system which allows us to find the best price for our commodities. And for a free market capitalist society to prosper the way ours has, greed has to necessarily play a vital role in building the vast stores of wealth we have in our nation. Were it not for greed, we would not have seen many of the greatest advances in ingenuity, if there were no opportunity for great reward, no one would take great financial risk. Complacency is the enemy of capitalism, and if our economic culture were such that once you achieve a certain level of prosperity, that’s good enough, then the greatest risks (which if they pay off will reap the greatest rewards, not just to the individual, but to society as a whole) would never get taken.

But the problem is that greed in and of itself does not have an off switch or any way to self-regulate. As I said, our culture is one which does not want to put an upper limit on greed itself, because to do so would be to stifle ingenuity at the highest levels. But the problem becomes that unfettered greed will look for opportunities anywhere and everywhere, even in some very inappropriate places. And as such, if money can be made, greed will seek to make that money with little or no regard to non-monetary costs, or costs to others who are peripherally involved.

One example is sub-prime mortgages. Greed does not see financially struggling people who would like to own homes but who can not afford a mortgage as a potential hazard to society, greed only sees these people as a potential money making opportunity. And greed finds many machinations to squeeze out every last bit of money it can from these people. Greed then seeks to absolve itself of responsibility in the highly likely event that the house of cards it built collapses. New greed steps in and leverages these risks by slicing and dicing the problem a million different ways so the risks are obscured and highly diffuse.

So regulation, in my opinion, is meant to be a check on greed. At its worst, regulation can do what we absolutely DON’T want it to do, which is to blunt the rewards side of the equation so much that it makes the risk side seem unpalatable…in order to maintain our prosperity as a nation, we need to make sure that risk is incentivized. But in the absence of regulation, risk will become over-incentivized, because greed will find ways to mitigate those risks, and eventually that mitigation will exact an expense somewhere, usually on those in society who did not intend to take risks as great as the consequences which they bring.

In other words, we don’t regulate what is going on in the banking industry, and allow greed to find any way it wants to make money, the banking industry will come up with things like Hedge Funds, which have no regulations…no one really knows what hedge funds managers are doing, but they know they are making money. At least they THINK the hedge funds are making money.

But what about Bernard Madoff? Or Tom Petters? Here are two highly respected businessmen who had FABULOUS reputations for returning better than market income on investments for very select groups of investors. But there was NOTHING backing this up…it was all a Ponzi scheme…a house of cards which they were able to get away with, because our greed makes us look for opportunities to put our money to work for us. And though we seek ways to keep from being taken, one of those is to rely on reputations…but these reputations can be manufactured if you have a constant stream of suckers. And if no one is watching to make sure that this is not all you are doing, you can get away with it for a very long time and make an awful lot of money. Sure Madoff was caugh, but he’s 70, he’s been running his investment business for 48 years, he’s had a damn good run, so what if he has to pay the piper now? But one intersting aspect to Madoff in particular is that either his clients didn’t get statements, or when they did get them, they were unreadable, and our society said, this is OK. Why? Well because surely someone is minding the store. Surely his reputation didn’t come from nothing! He has a great track record. He’s always paid his investors when they sold their holding and has always returned a profit. We’re making money, who cares how we’re making it, let’s just keep making it.

In this case both the investor and the con man were greedy, just in varying degrees and with varying levels of integrity. The investor’s greed is normal, it’s what makes capitalism work, it’s what makes people part with their money long enough so that it can be used to drive the economy. But again, someone has to be looking at these things and making sure that it’s NOT all a house of cards. Because essentially any investment there is can be replicated by a house of cards.

A year or two ago, some of the biggest movers and shakers were executives in banking. They were the ones authorizing loans to anyone and everyone. They were not even requiring proof of income and actually upselling people on how much house they could buy. They had no interest in selling people mortgages they could afford, because they knew that what they had was essentially another Ponzi scheme. If we sell mortgages to everyone, we’ll collect on most of them, some will default. So, we’ll spread the risk by creating these derivatives, so overall, even if you get some defaults, you still make money, and you have something of value that can be sold to someone else, who can then pool all their deriviatives together and create derivatives out of them, spreading the wealth even further. And just like any Ponzi scheme, the only problem comes when too many people try to take money out at once. Well, in this case, the housing market crashed and IT took too much of the equity that backed all these mortgages out all at once, and the time came to pay the piper…and there was nothing there to pay him with.

Had our economy been chugging along just nicely and we’d had a normal number of defaults, and houses kept gaining in value, it would have been just fine. But much of this was done under the assumption that even in the case of a default, there was still value in these homes, they could reposess and auction and recover most of the loss. But people were loaned SO much money on houses, and the housing values were SO inflated that when the value started dropping out, people ended up owing a LOT more one their houses than they could ever sell those houses for, so they stopped paying their mortgages, even if they personally were solvent. And banks had to reposess, but they now have these houses that are worth a fraction of what they essentially paid for them and there is no new stream of suckers lining up to pay off the losses of the previous investors.

So, what regulation SHOULD do at its best is to set some rules and standards for any given industry. And these standards should be there to protect the economy as a whole, and the individuals in our society. They should not be so strict that they will discourage innovation and risk taking, but they should nonetheless make sure that someone is minding the store and that entire industries aren’t setting up structures that are only stable in a certain set of circumstances. Industries should be based on solid foundations, so that if the unexpected does occur, they will be able to ride it out. And the problem is that every time business gets hurt, what ends up happening is that pain trickles down to the little guy. A business loses money, it lays people off, people then can’t buy things or pay their bills which hurts even more companies that rely on those consumers, and those companies have to lay people off who in turn can’t buy things or pay their bills, and so on and so forth.

So the problems are caused because of how inter-related things are because our entire society is in and of itself a house of cards….if our economy is stable the house can stand indefinitely, but if there’s a shake up, that house of cards starts to crumble. Greed has the power to keep our economy stable and working, but the problem is that greed can (and does) lead to these shake ups if we don’t put some limits on what it can do. If we don’t put some sort of a framework around greed to stop it from taking any opportunity that presents itself, potential costs be damned, then we’re going to keep seeing this.

So yes, deregulation can be a bad thing, and certainly, we saw this happen many times throughout the Bush administration, yet we didn’t learn our lesson. What was the first thing Bush did when he got into office? He replaced the heads of all the agencies which regulate industry with heads of those industries. Overnight, the goal of regulators when from “protecting the public interest” to “serving the needs of these industries”. And so pollution has stepped up, and we’ve got a global climate change crisis. Energy regulation was turned over to guys from Enron, and they destroyed the retirement hopes of thousands of people.

As with so many of the pressing problems we’re facing today, I think the President Elect showed the proper attitude towards industry regulation, when he said during the campaign about industry’s role in creating regulations, “they’ll have a seat at the table, but they won’t be able to buy every chair.” That’s the sensible way to approach it. Because if you have too much regulation, you will completely take away any incentive for people to innovate within their industries, we will stagnate and we will NOT be able to compete in a global economy. BUT, if you turn over the writing of the regulations to the captains of the industries you are trying to regulate, you will continue to see an emphasis on creating the highest profits while just pushing the liabilities of risk taking off on society, and society will continue to pay a heavy price time and again.

So yes, deregulation though not itself a bad thing…indeed sometimes a very necessary thing, is primarily responsible for weakening the limitations we MUST put on greed to make sure that it remains a productive and not destructive force in our capitalist, market driven society. Again, jessturtle23 had it just about right, and said it in a few thousand fewer words.

@DalePetrie: You made two points (among many) but I’d like to point out how they’re related.

1. The US has a lot of natural resources, but ...much of our prosperity comes not from the resources we have, but from our free market economic system which allows us to find the best price for our commodities.

2. So the problems are caused because of how inter-related things are because our entire society is in and of itself a house of cards…

There are three ways to generate true wealth: agriculture (including things like fishing and forestry), mining, and adding value to those things by manufacturing. For the most part, in the U.S., we’ve sent our manufacturing jobs elsewhere, and we’re squeezing farmers pretty hard, too. But people thought that it would still be okay if less than 20% of the economy is based on generating material wealth, because we’d just make up the difference by having a service based economy, full of waitrons and tattoo artists and retail workers, and we could use the “wealth” generated to buy the raw materials from other lands.

However, it hasn’t quite worked out like that. We don’t really generate much wealth here in America. We just mark up and speculate and otherwise live on the wealth generated by others. And there comes a time (like now) when that smoke and mirror show falls apart, and then what? We have very little of the GDP based on making wealth, so we don’t really have anything to fall back on. (One industry that does create some kind of wealth, the car manufacturers, are seen as far less worthy of government intervention than the industries, like banking, that push pixels around.)

What we need to do in America, if we want to base our economy on something real again, is to generate real wealth instead of creating “jobs” by inserting more and more middlemen into the business of wealth distribution. However, like you said, we don’t have lots of oil, gold, and diamonds. Our fields are getting farmed out. Our fisheries are down the tubes. The only tricks we have to fall back on are things that don’t do the trick.

@laureth – I’ll agree with everything you said. Though I do think there are two things I’d add. One is that you can base the economy in some part on services. But one thing e’ve done is to outsource many of the services as well. I think really what we need to become is a technology based economy, that is where our greatest potential strengths are, but we cede so much of that to outsourcing as well. I do think Obama has a very good plan to create a green technology sector that will produce and be based on things of value. The second thing is that natural resources and agriculture are not the only things that we could produce rather than inflate, but again, it circles back to point one, because pretty much everything we COULD be producing we’ve outsourced.

What can we base a service economy on, if we import everything material – and suddenly can’t, because of unrest or expense?

Laureth—you’ve nailed it. We Americans will pay the price for giving up our manufacturing base for decades—the American standard of living is gone.

It is just that only a few of us realize it, so shhhhh! The others will figure it out when layoffs come to their town.

@Dale “a technology based economy” requires cheap energy, which after a few months we will not have.

Don’t forget that services include the entertainment industry, which includes tourism and hospitality, as well as movies, books, performances, etc.

Services also include design, planning, etc. The services we provide will be those requiring serious education. Oh yeah. Education is another service. Tons of people come from all over the world to attend our universities. More would come, but we don’t let them in.

These sectors can grow quickly, and take up the slack as the old smokestack and manufacturing jobs go overseas.

And of course, some industry can’t be exported—transporation, electricity production, construction, and probably many more. Material resources are a fairly trivial part of an economy, I think. The really important stuff happens in people’s brains.

Well, a technology based economy would require us to bring some manufacturing back in house, I thought that was implied.

As for cheap energy, if we adopted a Manhattan Project approach to making renewable energy from natural sources cheaper and more readily available (hell, if we could just figure out how to build a halfway decent battery), we could have that cheap energy. That’s what I mean, we need to move away from oil 100% and you may not know this, but one 92 square mile solar panel using EXISTING technology could replace 100% the United States’ energy needs. If we’re at the forefront of green technology to produce virtually free energy that will never run out, we’ll remain the pre-eminent economic superpower.

Ok Daloon, Let’s make America the Spring Break Capital of the world. The tourism idea is the best shot we’ve got. We can get the unemployeed UAW workers to walk up and down the street selling T-Shirts to Saudi’s, Chinese, and Indian middle class vacationers. You know, those middle class folks that do our accounting, computer programming, X Ray reading, manufacturing, telemarketing, sales, and mortgage underwriting, and corporate customer service. I will be happy to shine their shoes (do they wear shoes?) drive taxi for them, and tell them how wonderful their English is, and hopefull they will remember to give me a dollar gratuity so I can afford the card board box behind the Hilton.

The contiguous U.S. used 760,108 megawatts of electricity in 2006. That’s a lot of solar panel.

@dalepetrie: I found the article you’re talking about. Apparently it’s not as good as all that.

@laureth – I did just give the 5,000 mile view on this one. You couldn’t just build a 92 sq mi panel, you COULD produce as much energy as the US needs with one from what I’ve read (a number of articles actually cite this, though some dispute it), but distribution and storage would be a problem But if you were to break this huge panel up into several thousand smaller ones and put them at equaly spaced distribution points around the US in areas to optimize daylight, worked o teh sotrage and distribution issues, etc. you could do it. You could also add in geothermal, wave and wind power. It cold be done, it would take a LARGE investment up front and a great deal of R&D, but I think like I said if we had a Manhattan Project style apprach, we could get there in a decade, no problem.

As long as we’re talking about the Manhattan Project, is there even a thought of putting new nuclear plants into this mix? The notion of bringing even one new nuke plant on line will send every Greenpeace activist running into the streets at once, but consider the facts:

Chernobyl was built by the old Soviet Union with little regard for safety. Had the plant been better designed, the disaster would never have happened.

Three Mile Island was almost 30 years ago. The computers in your cell phone and your iPod are more sophisticated than the ones that ran that entire complex. If we can build sensor arrays that allow a 500-horsepower V8 engine to pass emissions standards, I would think we could build better monitoring systems for nuclear reactors.

We already know how to build them. We can build them safely. The French have been so successful at it that they are no longer mining coal.

I do think that from what I’ve read, nuclear may not be the boogeyman everyone is describing and I’ve heard well respected scientists say in no uncertain terms that we HAVE solved the storage problem, we just need a leader like Obama to communicate that to people so they will understand and believe it. I’m open to it, I think we really have to think outside the box now.

dalepetrie, indeed. More than 50% of Canada’s electricity requirements are being supplied by 3 nuclear power plants. Three. And we have not had any freak babies coming out of wombs or other issues commonly brought up by the anti-Nuclear brigade. I am a strong supporter of nuclear power, it IS a serious solution towards producing cleaner energy. It’s a shame the other energy industries have bigger budgets to pay lobbyists. Hopefully the Obama administration will help with this issue.

Canada only has around 30 million people and Canada is much larger geographically than the US.

Why don’t we build power plants in Canada?

…because Canada is not your land to build on? :)

Actually if we were wise we’d be building more plants of all types (especially wind) and selling surplus energy back to you guys. But keep in mind, while we do have nuclear here, we aren’t free of nuclear paranoia, sadly.

I lived through the 3 Mile Island accident in 1978. I fear you do not know of which you speak.

Just because I wasn’t alive or personally lived through the event doesn’t mean I haven’t studied it thoroughly in developing my opinions of the technology. I think it’s foolish to ignore the 20 plus years of development that’s been done with nuclear technology because of a few accidents that have happened in the past. With great risk comes great rewards. I also think it’s foolish to abandon all nuclear technology because of these accidents and the perceived risks associated with the technology.

the 20 years of so called study and research was funded by the industry. This is like getting research about Solar funded by Exxon. Or pharma saftey studies funded by Merck.

You cannot take the wolf’s opinion that the hen-house is safe under his watch.

I am all for building Nuclear Plants in Canada in someone elses back yard.

A nuclear plant a couple of miles from your home does not bother you then? I’m good with that…

Ah, Mizuki, you’re a true NIMBY (not in my back yard).

If we’ve solved the radioactive waste storage problem, why aren’t we storing it there? Where is “there?”

@laureth – Yucca Mountain in Nevada.

Nobody wants trains laden with nuclear waste running on tracks near their communities. That is more of a problem than storing it.

@Mizuki – the Three Mile Island disaster occurred on March 28, 1979, not in 1978 as you so confidently proclaimed. I’m usually pretty aware of what I’m saying, even on line. From the article referenced in the link:

“The accident at the Three Mile Island Unit 2 (TMI-2) nuclear power plant near Middletown, Pennsylvania, on March 28, 1979, was the most serious in U.S. commercial nuclear power plant operating history(1), even though it led to no deaths or injuries to plant workers or members of the nearby community.” (Italics mine). The movie The China Syndrome ironically was playing in theatres at the same time as the accident, which no doubt added to the hysteria. It was only a movie.

Last point: What don’t nuclear plants produce? Greenhouse gasses.

TMI is history. This is the future, baby, get used to it.

listen—anyone that remember’s the 70’s was not there! 1978–1979 WGAF?

And thousands of children got cancer, learning disabilities, and developmental problems, thousands of old people died, animals were born with unimaginable defects (I saw 6 legged cows and deer and thousands of stillborn animals on the farms)—this is what the Nuclear Industry’s Funded study you quoted left out. If you did not live there, you did not see it. If you lived it you saw it.

All the corporate funded propaganda that those who were born yesterday quote will not change what I say with my eyes.

I am sure that those who revise history appreciate you carrying their water.

Mizuki, are you implying that there’s been a massive coverup regarding the actual extent of harm and damage caused by the Three Mile Island accident in which no actual radioactive material of damaging value to a grown human escaped, and that not only did many people die because of it but many wildlife animal were mutated and many children were harmed permanently?

Because if you are, you must have such strong wings to fly in the face of science so boldly. Don’t go too near to the sun now…

I will accept that some harm was caused by it, pregnant women and elderly being the most likely target for not only this but pretty much any illness. And I wouldn’t even discount thousands of stillborn animals. But the simple fact is that this has had no real effect on humanity whatsoever, let alone cancer deaths in the directly affected area after 20 years. You want to talk about dangerous radiation fallout results, let’s talk about the close to a quarter million Hibakusha resulting from the explosion of the atomic bombs, and the damage caused to their unborn children and offspring. And even there, with so many affected people, there are no differences in mortality rates in the children of hibakusha. Ah, science. Always a breath of fresh air.

All I am telling you is what I personally witnessed in the late 1970’s and early 1980’s when I lived in Lancaster Penn.

I am aware that the Nuclear industry can create “science” saying that Nuclear will make your breasts nicer, and penis bigger—but that does not make it so. The nuclear industry says the same thing about Chernobl.

Because nuclear waste makes childern stronger, like Wheaties.

re: Yucca Mountain, from here:

“At current rates of spent fuel production,” Guinn told the committee, “if Yucca Mountain were to open and be filled to capacity by around 2036, there would still be just about as much spent fuel stored at reactors sites as there is today.”

“If DOE meets its shipping targets, it will take approximately 25 years to fill Yucca Mountain with 77,000 tons of waste and spent fuel,” the governor testified. “But by then, operating reactors will have produced an extra 50,000 tons, leaving approximately 37,000 tons of spent fuel still sitting at reactor sites across America – a mere 9,000 tons less than we have today,” said Guinn.

@laureth, which is worse, nuclear waste contained at the sites, or CO2 distributed throughout the world’s atmosphere?

We all should cut consumption and sing cumbaya, but it is not going to happen.

@Mizuki, you should cite references when you make such strong statements.

@IchtheosaurusRex: I would greatly prefer a carbon sequestation operation, although fossil fuels can’t last forever. However, did you check the article I linked? My objection is not that we’d be using nukes, it’s that Yucca Mountain would only be useful until it’s filled up (in less than a generation), but it’ll be dangerous pretty much forever.

If only we could do with our waste what the French do with theirs – refine it further and use it again. However, Americans don’t like that because the end product is something you can make bombs with. If we did this instead of just storing first-generation waste, it would make the amount we have to store much smaller, rendering places like Yucca Mountain far more useful.

IchtheosaurusRex—I am referring to the 10 years of my life I spent living in Eastern Penn, from 1977–1988. Google does not have links to my life, or my nieghbors, and it was not in the interests of Industry to document the death and disease caused by the 3 mile Island accident?

Can you distingush between science and Corporate propaganda?

@Laureth, it is an imperfect solution, but the cost of doing nothing is too high, and quibbling over what to do – especially if you involve the courts – is the same as doing nothing. It’s my hope that by the mid-21st century, we will have a better solution yet – solar arrays or even controlled fusion.

@Mizuki, I do make distinctions. You have already contradicted yourself; you were wrong about the year TMI occurred, and you said if you remember the ‘70’s you weren’t there. Well, were you there or weren’t you, and what exactly do you remember?

BTW, that was the 60’s and Robin Williams said it.

If you want to be in a serious debate, you’re going to have to do better that bandy about phrases like “Corporate Propaganda,” all right?

It is hard to have a serious debate with a little green fish I guess.

ichthe: Blowing off the past is a sure way to experience it all over again. How do you know nobody died because of TMI or any other environmental “accidents”. Just necause some nuclear shill says that cancer clusters are coincidences?

@GG – There are nuclear power plants all over the world. About half the electricity in the Chicago area, where I live, comes from nuclear plants. There aren’t any new ones being built in the U.S., but I refuse to believe that TMI #2 is the best we can do in terms of design and operations.

I would like to see the data on cancer clusters believed to be associated with TMI (I already know how bad Chernobyl was). So far, all I have heard is personal opinion.

To reiterate, we have to do something. The alternative to oil is electricity. Hydrogen is a pie in the sky, and everything else means you still have to burn carbon. If there were any simple solutions, they would be implemented already. I’m not saying we should build 1000 new nuke plants and abandon every other effort. I’m saying we should think about them again.

The idea that we will be able to live in the future the way we lived in the past (with car’s and cheap fuel) as the center of our lives and surburbia I believe is built on a faulty assumption. I think we are entering a period of upheaval and change, painful change. We will have to be come more regional, food will be grown closer to home, people will need to resettle smaller towns and grow food for survival.

so many folks think that technology will save us, but technology does not equal cheap petro fuel.

@Mizuki – can we wear plain black clothes and some of those cute little white lace hats for our womenfolk? Do we have to use those reflective triangles on the back of our horse-drawn buggies? Ruins the quaintness of the whole thing.

Tech is the freight train, dude, get on board or get out of the way. It ain’t gonna stop for you just cuz you tie yourself to the tracks.

The tech of the future is not decayed dinosaurs, ich. It will probably be updating the thrifty attitudes of the past.

Re “The alternative to oil is electricity”

It is for some things. You can’t make plastic heart valves or fertilizer out of electricity, though.

@Laureth, no you can’t, but we don’t burn the heart valves. No CO2, no problem.
@GG – I want oil (as fuel) to go away, so no disagreement there.

I don’t even want to drive an electric car to work. I want to ride an electric train, or better yet, walk or ride my bike. But it’s too late to fix up our mismanaged infrastructure, so we have to be pragmatic. Nobody wants to be, but we have to be.

IchtheosaurusRex—how old are you anyway?

59. 60 in June.