The Chinese fail Even Greater than the Americans in their Ambitious Electric Car Sales Program

Posted by PITHOCRATES - May 6th, 2012

Week in Review

Well, it appears the Chinese can do something wrong.  Guess that’s what they get for trying to follow American policy (see Not yet posted 5/5/2012 on The Economist).

THE main road at the headquarters of BYD, a Chinese car and battery firm in Shenzhen, seems to go on for ever. It winds from gleaming offices past enormous factories and dormitories to a renewable-energy plant and test track. Visitors can take the E6, the firm’s new electric car, for a drive—but try to accelerate and the engineers get nervous. Like the firm, the car is sluggish…

Three years ago, the Chinese government unveiled policies to propel sales of all-electric vehicles (ie, ones that can’t use petrol at all) to 500,000 by 2015 and 5m by 2020. But barely 8,000 electric cars were sold last year, almost all going to government fleets.

The chief snags are cost and convenience. Despite lavish subsidies—in Shenzhen, consumers were offered 120,000 yuan per vehicle—electric cars still cost more than the petrol-powered sort.  The lack of recharging stations also hurts. Hardly 16,000 were installed last year, a tenth of the official target.

So the Chinese sold barely 8,000 electric cars last year.  So to meet their target of selling 500,000 units by 2015 all they have to do is to increase sales by, let’s see…  You divide the difference of 500,000 and 8,000 by 8,000…  Multiply that by 100…   Which comes to…let’s see…6,150%.  Wow.  Even for the Chinese and their explosive economic growth that will be a tough number to reach.  And by tough I mean, of course, impossible. 

So it’s not just the Americans.  The Chinese don’t want these all-electric cars either.  Probably because like the Americans they don’t want to sweat bullets wondering whether they have enough charge to make it home.  Deciding whether to see by turning on the headlights or keeping the lights off to save charge.  Deciding whether to stay warm by using the heat or to shiver with the heat off to save charge.  Or simply saying, “The hell with this.  I’m buying a gas-powered car and not worrying about getting home.  I’m going to see where I’m going.  And I’m going to stay toasty warm while getting there.  If I run low on gas so what?  I’ll just pull into a gas station and top off my tank.  And get back on my drive home in 5 minutes or so.”  That’s why no one is buying these all-electric cars.  Because a gas-power car won’t give you ulcers worrying whether or not you will make it home before the charge runs out.

The all-electric car is purely a government phenomenon.  It can only exist with excessive government subsidies.  And only in government fleets where the commute is short.  And they will have a gas-powered bus to pick up people stranded when their car runs out of charge.  And a gas-powered tow truck to bring the all-electric car back to the garage for 8 hours or so of recharging.

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Foreigners using Britain’s Free Health Care are making that Free Health Care ever more Expensive

Posted by PITHOCRATES - May 6th, 2012

Week in Review

National health care systems are straining budgets everywhere.  As countries constantly cut costs and improve efficiencies.  To keep their floundering systems afloat.  And every time they think they’re getting their costs under control something like this comes to light (see GPs ‘threatened with legal action’ for taking failed asylum seekers off surgery lists posted 5/3/2012 on The Telegraph).

It emerged in an investigation which revealed that more than £40 million is owed to NHS hospitals by foreign patients who were not eligible for free care, research indicates…

Freedom of Information requests by Pulse revealed the average unpaid debt for the provision of care to foreign nationals was £230,000 in the 35 trusts which responded.

If this figure was the same across all 168 English acute trusts, the total debt would be almost £40 million, the magazine claimed…

In response to the figures Dr Richard Vautrey, deputy chairman of the British Medical Association’s GP committee, said trusts must put in place arrangements ”that ensure people cannot exploit the system”.

A spokesperson for St George’s told Pulse: ”A high percentage of our patients require life-saving trauma, neuroscience, cardiovascular or paediatric care…

”It is too simplistic to call it health tourism. The reality is a lot more complex.”

The investigation comes days after campaigners warned GPs had too much freedom to register sick foreigners who may not be entitled to expensive British healthcare…

The group’s chairman Sir Andrew Green said: ”To allow such easy and potentially hugely-expensive access without any entitlement must be stopped at once, otherwise the NHS risks becoming the World Health Service.”

The National Health Service (NHS) is the biggest chunk of Britain’s deficit.  So not only do they tax their people heavily they borrow heavily as they are already facing an uphill battle.  An aging population that is living longer is consuming ever more health care services.  And they don’t need to add more to a straining system.  Especially when they are not paying any taxes to fund the NHS.  Or paying any taxes to service the debt that funds the NHS.

Even when the health care is ‘free’ someone has to pay for it.  Because nothing is truly free.  All of this free health care is pushing Britain to the breaking point.  As Obamacare will push the U.S. to the breaking point.  Based on current exchange rates and population differences between the UK and the US, Obamacare could expect a foreign patient loss of approximately $325 million annually.  Or more.  Probably a lot more.  Especially if it’s treat first; bill later.  For people already travel to the US for the best in health care treatment.  Just imagine the health tourism when that care is free to American nationals.  And treat first, bill later for everyone else.  When it becomes difficult to say no.  Because saying no will bring in the lawyers with discrimination lawsuits.  So it will be treat first; bill later.  And based on the UK experience, a large percentage of those bills will go unpaid.

With a large budget deficit already exceeding one trillion dollars all of this health care spending will fall directly to the deficit.  Making it ever larger.  With no hopes of ever reducing it.  Especially when Obamacare evolves into the World Health Service.  Which we can’t afford any more than we could afford being the world’s policeman.  So when will it end?  This ever increasing government spending?  Soon.  And it won’t be pretty.  Because there just won’t be enough people to tax to service the accumulated debt.  And pay for Obamacare.  As well as everything else in the bloated federal budget.  Then the debt defaults will start.  Followed by the collapse of the banking system.  And then the depression.  Sort of like the Great Depression.  Only with a massive welfare state collapsing on top of it. 

But on they spend.  These old people.  Taking comfort in the fact they will be dead before the collapse.  So only their children will suffer through the experience of the oncoming economic carnage.  So not only are they bad stewards of the people’s trust.  They’re bad parents, too.  And if they sacrifice their own children what hope do we have?

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Universities are more Interested in Government Grant Money than Teaching their Pesky Students

Posted by PITHOCRATES - May 6th, 2012

Week in Review

Education is sacred.  For in all the budget debates.  In all the class warfare.  One field is exempt from that one most disparaging label.  Greedy.  Everyone is greedy in Western Civilization.  Except the universities and the professors.  Who make more and more while working less and less.  And hand out degrees that have little value in the modern economy.  No.  Their greed is never called out.  These people who add little to our economic wellbeing.  While those who do are called every filthy and vile name in the book.  Because education is sacred.  Apparently.  No matter how substandard it is (see Professors should teach more classes: Experts by Antonella Artuso posted 5/6/2012 on the Toronto Sun).

Ontario’s post-secondary system could improve the quality of students’ education and save money by sending more professors back to class, some experts say.

There is rising concern that hundreds of thousands of Ontario undergraduate students are being short changed by a university system that values research ahead of teaching…

Ontario undergraduate university students learn in ever larger classes and often emerge from their pricey education without the skills they need to find work in a modern economy, he said…

There has long been an informal working ratio for professors — 40% of their time spent on research, 40% on teaching and 20% on administrative duties.

Economist Don Drummond, who chaired the Dalton McGuinty government’s Commission on the Reform of Ontario’s Public Services, concluded universities — and even a few colleges — now aggressively chase provincial and federal research grants with some institutions using undergraduate tuition fees to pursue government funds…

University of Toronto Professor Ian Clark, co-author of Academic Reform, said the Ontario and federal governments have ramped up research grants in the hope — one that’s shared by most developed nations — that the investment will stimulate the economy.

Professors now spend more time on research, teaching an average of two courses a term, down from three courses a term about 20 years ago, Clark said.

At the same time, there’s been a strong public push to increase the number of Ontarians with a post-secondary education, leading to a 50% jump in undergraduate students over a decade.

“You’re getting less than half as much time per student per faculty member as there used to be. Inevitably, it’s leading to bigger classes and more use of teaching assistants,” said Clark, a former president of the Council of Ontario Universities. “That, we assert — and so do many, many others — is leading to a decline in the quality of the undergraduate education that Ontario students receive…”

Constance Adamson, president of the Ontario Confederation of University Faculty Associations (OCUFA), said professors are aware that class sizes are getting larger, but the fault lies not with the focus on research, but with chronic underfunding of the post-secondary system.

Really?  The problem is chronic underfunding?  It has nothing to do with universities running after all that free government money?  The professors are teaching one less course a term.  Why?  Because they’re too busy chasing all of that free government money.  No wonder these kids are graduating lacking the necessary skills to make it in the modern economy.  Their education is only a distraction to these professors.  Who spend as little time involved in it as possible.  Why?  Because that’s why God made graduate students.

This isn’t a problem unique to the Canadians.  Throughout the world a university degree is becoming a birthright.  More and more kids are going to university.  Because we tell them it’s the gateway to success and wealth.  The problem is that not only are we giving them a part-time, half-hearted education, a lot of the degrees we’re giving them are worthless in the modern economy.  Liberal arts.  Social sciences.  Women studies.  Etc.  None of which are in high demand in the modern high-tech economy.

Perhaps these are the reasons those angry unemployed university graduates are protesting capitalism in all of those occupy movements.  They borrowed a fortune for those degrees.   That were supposed to give them success and wealth.  Only to find that they got huge student loan debts.  For a worthless, part-time, half-hearted education.  Worse, these university graduates don’t even understand capitalism.  For it isn’t capitalism that failed them.  It was their leftist universities that failed them.  Who gave them a substandard education.  While charging them a premium for it.  But do these kids protest these universities or their professors?  No.  They’re protesting the businesses that can’t hire these graduates without spending a fortune on them.  To give them a useful education.  That their university was supposed to provide them.

That’s how bad our education systems have become.  Our universities draw these kids in.  These pesky students.  Selling them a useless degree.  That these kids should have known were worthless.  I mean, exactly what kind of high-paying job do these kids think their degrees in the liberal arts, social sciences, women studies, etc., will prepare them for?  Stock analyst?  Investment banker?  Research engineer?  Doctor?  The truth is that many of these degrees these kids are graduating with have very little if any value in the market place.  In fact the only thing they’re qualified for is to teach these worthless degrees to other unsuspecting students. 

And yet they protest capitalism.  Not the people who made them unfit to enter the world of capitalism.  Which is yet another sad commentary on today’s educational standards.

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Drilling More will Lower Oil Prices and Lower the Price at the Pump but it won’t Win Votes on the Left

Posted by PITHOCRATES - May 6th, 2012

Week in Review

Global warming alarmists and environmentalists have a friend in President Obama.  They represent a large swathe of the voting electorate.  Including some very high profile names in the entertainment industry.  Whose expertise in energy policy is nonexistent but persuasive nonetheless.  Because of an unwritten law in society.  If you sound and look good you are a de facto expert on the subject.  Which comes in very handy in making bad policy popular.  As demonstrated by the high price at the pump (see The 3 biggest benefits of producing more oil by Shawn Tully posted 5/3/2012 on Fortune CNNMoney).

President Obama argues that a campaign to substantially raise domestic crude oil production would provide miniscule benefits in lower prices and enhanced growth…

In fact, tapping the potential gusher within reach would enrich our future in three ways. First, despite the President’s declarations to the contrary, the extra output could be large enough to lower world prices by several dollars a barrel, chiefly through exploiting the enormous promise of shale oil. Second, adding to capacity would provide a sort of catastrophic insurance policy by cushioning shocks in supply that are especially damaging in the kind of tight, vulnerable market we’re experiencing today. And third, raising production means lowering our oil imports, and hence greatly improving our balance of trade. By pure GDP math, shrinking “net imports” would lift America’s growth trajectory…

Tight capacity means that almost all wells are pumping full tilt. To bring on more oil, producers that could react quickly may choose not to. A country like Saudi Arabia would need to spend lots of money uncapping old wells, and upgrading old fields, investments it’s now unwilling to make, in part from fears these high prices are temporary.

That leaves oil-hungry consumers to bid for the fixed number of barrels entering the market each day. In effect, someone commuting by car in London outbids a Chicago driver for scarce gasoline, and the Chicago driver saves by taking the train. That bidding is now driving the price far above the cost for the producer drilling the world’s most expensive oil, creating what’s called in economics a “scarcity premium.” And it’s why Exxon Mobil (XOM) and other oil giants are generating such huge profits.

How did the market reach this bind? From 2003 to 2008, demand for oil rose sharply, driven primarily by rapid industrialization in China and India. “The oil rich nations matched the rise in demand by producing more until around 2006,” says Lutz Kilian, professor of economics at the University of Michigan. “Then, production went flat, and even when demand started increasing again after the recovery began, production didn’t keep up…”

Well, there you have it.  Oil is expensive because demand is greater than supply.  So to reduce the cost of oil all we have to do is bring up supply to match or exceed demand.  And down goes the price of gasoline.  Elementary, really.  So why aren’t we doing this already? 

Because of the global warming alarmists and environmentalists who simply hate fossil fuels.  And the current president is appealing to these demographics for campaign funding.  And votes.  Neither of which he will win if he stops attacking Big Oil.  So he continues to attack Big Oil.  Buying campaign funding and votes.  All paid for by everyday Americans at the pump.  Who are cutting back everywhere in their lives to afford the high cost of gasoline the president is using as vehicle to reelection.

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Shell New Zealand spending Hundreds of Millions of Dollars looking for Something in the Great South Basin to Sell

Posted by PITHOCRATES - May 6th, 2012

Week in Review

Bringing fossil fuels to market is expensive.  People look at the profits these oil and natural gas companies make and cry foul.  But few look at the cost side.  Which is very, very steep (see Shell NZ takes control of exploration in Great South Basin by ALAN WOOD posted 5/4/2012 on Stuff.co.nz).

Shell New Zealand has taken over control of a joint venture exploration in the Great South Basin, saying there are good indications of natural gas after $100 million of exploration in the “frontier” area.

However, to push into full development the explorer would need to find a field of a similar size to Maui off Taranaki, given that it would be need to spend $10 billion-plus on a processing facility if gas was found, the chairman of the Shell companies in New Zealand, Rob Jager, said…

Shell has assumed operatorship of the New Zealand exploration licence PEP 50119 in the Great South Basin from joint venture partner OMV New Zealand. The venture partners had spent about $100m exploring the area, including $50m early on, then another $50m on a just-completed seismic survey…

The cost of drilling a single offshore well in New Zealand was in the order of $200m given the expense of bringing a specialised rig from somewhere like the Gulf of Mexico…

“Certainly we would hope that we would be in a position to start seriously thinking about looking for and contracting a rig in the next six to 12 months … so you’re not looking at drilling realistically until the summer of 2014/15.”

Let’s add up the numbers.  Just to explore cost Shell New Zealand $100 million.  Drilling a single well will cost another $200 million.  And then the special natural gas processing equipment is another $10 billion.  All of this spent, of course, before they earn a dime of revenue off of this field.  That’s a lot of money. 

When you look at profit as percentage of revenue the oil companies aren’t as profitable as some other companies.  Such as Apple or Microsoft who are by far more profitable.  Yet we attack the rich oil companies as being too rich.  Who have to risk hundreds of millions of dollars JUST to see if there is a CHANCE that there may be something down there they can sell.

Despite all of this once they find something down there to sell they can bring it to market to sell in less than a year.  And that includes that $10 billion processing facility.  Incredible.  Compare that to the ‘smart’ green energy of the future.  That the Obama administration invested heavily into.  Only to see a string of failures.  And lost taxpayer money.  Just look at what the oil companies can do without any help from the government.  Some would even say while fighting the government’s attacks on their industry.  While the ‘smart’ green energy of the future has been working on government money for close to 4 years with NOTHING to show for it.

Perhaps it’s time to stop attacking the oil companies who are giving us the oil and natural gas we crave and need without the government subsidizing it.  And turn some of our anger on all that wasted taxpayer money on the ‘smart’ green energy of the future which is proving NOT to be the smart investment.

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The NHS using Cheaper Untested Drugs to Cut Costs and make their Limited Resources Stretch Further

Posted by PITHOCRATES - May 6th, 2012

Week in Review

Who is more evil?  The pharmaceutical that has spent time and money to develop a new drug?  And then further time and money going through a lengthy clinical testing process to guarantee (as best as possible) that the new drug is safe?  When proven ‘safe’ by the regulators to sell it at a patent-protected price?  To cover all of these costs.  All the costs for the 20 new pills that failed along the way?  And the inevitable lawsuits when a proven ‘safe’ drug proves NOT to be safe after all?  Or is the health service using a cheaper drug that appears to give similar results?  That hasn’t gone through that extensive clinical testing process?  But they use the cheaper drug because they can treat more patients than they can with the more expensive but clinically tested drug?

Oh, it’s a perplexing and vexing question.  For we want new super drugs to cure all that ails us.  But we want those drugs to be cheap.  And safe.  But if they end up hurting us we’ll sue the bejesus out of everyone who allowed that drug to get into our system.  Which brings us to a great catch-22.  Drugs cannot be both cheap and safe.  For even the expensive ones sometimes prove not to be safe.  Especially if we rush them to market to save lives.  Only to find that by rushing those drugs to market they’ve harmed the lives we were trying to save.

Sadly, they have to balance the quality of health care with the cost of that health care.  Which is a never ending struggle in the NHS (see Using Avastin for eye condition wet AMD ‘could save NHS £84m’ by Branwen Jeffreys posted 5/6/2012 on BBC News Health).

The NHS could save £84m [about $135 million US] a year by using a cheaper drug to treat a leading cause of blindness, research suggests.

NHS-funded research says both Lucentis and Avastin have a similar effect in preventing loss of sight when used for wet age-related macular degeneration.

Lucentis costs about £700 an injection, and Avastin £60 – but Avastin is not officially approved for eye conditions.

Novartis, which markets Lucentis in the UK, is taking legal action against four NHS trusts for using the cheaper drug.

The company says the use of Avastin – developed to treat cancer – is undermining patient safety…

Lucentis is officially approved for use in eyes, and is the treatment recommended in England and Wales by the watchdog NICE.

Roche, which owns the rights to the similar, but cheaper, Avastin, has never sought to have it approved for use in eyes, which would involve further clinical trials.

But many doctors have been using Avastin at their clinical discretion…

As they both target blood vessels, the IVAN researchers particularly looked at whether there was an increased risk of heart attack or stroke…

Novartis argues that Lucentis has a safety profile proven in clinical trials and approved by the regulators.

It says the US research, which has just published data from the second year, highlights what it describes as “serious safety concerns” about the use of Avastin in this unlicensed treatment of eyes.

It points, for example, to a higher rate of stomach and gut disorders in patients given Avastin…

Cost pressures on the NHS have led to an increased use of Avastin…

The financial stakes are high both for the NHS and the pharmaceutical company.

Perhaps the question should be which is more evil?  The pharmaceutical industry?  Or a national health care system that has put cost considerations before patient care?  For the use of the cheaper drug is driven by the cost of the drug.  Not by the effectiveness of the treatment.  They may determine that the cheaper drug may be as safe as the more expensive drug.  The drug that was specifically clinically tested and approved by regulators for that specific use.  But this points out another issue.  Is the drug approval process not necessary for all drugs?  And, if not, why have it?  If it is only delaying bringing more life-saving drugs to market at affordable prices?  And if this is all true then should there be a ban on all lawsuits against pharmaceuticals?  Who were only doing what everyone demanded of them.  Rushing new life-saving drugs to market.

Perplexing and vexing questions, indeed.  And ones that we will hotly debate as Obamacare comes on line.  For Obamacare will have greater cost constraints than the NHS.  For Obamacare will treat far more people than the NHS.  About 5 times as many as the UK based on population sizes.  Which means the debate under Obamacare will not be about saving $135 million.   But about $683 million.  Over half a trillion dollars.  Or about half of the 2011 budget deficit.  So you know Obamacare will consider these cost savings.  And use drugs that haven’t gone through the clinical testing process like they are in the UK.  And actively search for other savings.  And place incredible pressures on the pharmaceuticals.  Making it very difficult for them to make a profit.  Or to even cover their costs.  And when that happens they will drop out of the business of finding new super drugs to cure all that ails us.  Making what ails us really ail us.  Reducing the quality of our lives.  Perhaps even killing us.

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