US Automobile Sales for May 2009

[Copyright 2009© by Russell S. Kim | Word Count: 1,085 | Created/Published Date: 6/4/2009 | http://econarkay.blogspot.com ]

Auto sale's number, a mobility acquirement is one of the leading economic indicator, which I follow on monthly basis. At the current auto sales pace, US will have about 8 million. However, consequences of dooms of GM and Chrysler doom are unknown. Any acute oscillating sales numbers are not good indicator for next 24 to 36 months outcome. As GM has become the Government Motors with the government's insistent on higher CAFE standard, the US automakers will be in a weaker position. Partly, heavy cost of its legacy and on-going social welfare program costs of these automakers have force to rely on heavier cars. The cost is driven by the very notion that some entity should "take care of" some masses have placed these automakers in these situations which is very reminiscent of British automakers of 80s and S. Korean automaker's ongoing struggle with their militant unions. Thus as of last year, S. Korean automakers produced more cars from abroad than inside of S. Korea. The Hyundai Kia Automotive Group will have capacity to produce 1 million cars in US by year 2012. Like Honda, Toyota, Nissan, and other foreign automakers, labor cost is lower than the US automakers where they do not have unions, collectivists. This allows very flexible resources planning whereas the US automaker's cost due to over-burdensome costs have and are crippling their operations. The US government created regressive business environment with its willing accomplices in the media and the docile populace for US automakers to fail.

What drives people to push for higher CAFE standard? Do people think such edicts will relieve US from the dependence on fossil fuel? How would this allow President Obama's "Hope and Change" of "End Oil Dependency" to be realized? [1] USA uses 24.8 bbl/year per capita.[2] Over 40% of the US energy comes from petroleum. Only 6.8% of the energy comes from so-called renewable resources, which mainly comes from hydroelectric dams. This means almost no energy comes from the solar or wind power. The commercials where you see all these windmills and solar panels that appear on TV commercials during the election cycles are just pipe dreams. They are not reality. In 2006, Wind and Solar energy just occupied 0.8% of the total energy.[3]

 

Scenario

In typical house with a small air-conditioner, you would need about 1,200 watts per hour.[4] If you only use air conditioner just ¼ of the time, this would be adjusted to 750 watts per hour. So, you would use 750 x 24 = 18,000 watt-hours per day or 18 kWh per day. In Texas, from January to December, an average solar radiation that is capable of feeding the solar radiation to the panel is about 4.79 hour per day. 18/5 = 3.6 or 3,600 watts. Multiply this by 1.15, it gives 4,140 watts of solar panel needs.[5] How much the solar panels alone will cost you? If you get 210 Watt Panel, you need 20 of these for $13,776, which does not include the battery and other essential controllers. According to various solar panel websites, setting up the panel will cost around $7 to $9 per watts. Therefore, for 4,140 watts, you will need $28,980 to $37,260. There are over 127,901,934 housing units in US as of 2007. [6] If every house had one of these things installed to realize the Hope and Change, it would cost $3,837,058,020,000 or $3.8 trillion. Maybe the President would pass an End of Oil Dependency Act where he would pass $3.8 trillion program, which he will have hard time controlling it like his $800 trillion + stimulus package where only 10% are actually going into the actual stimulus activities.

 

Now, this does not include cars. If the electricity were the fuel for cars, cost of the solar energy system would rise. For example, at best and liberal estimation, Tesla Roadster uses 53 kWh for 227 miles.[7] Therefore, a car driven for 12,000 mile per year, it would use 2,800 kWh or 234 kWh per month or $1,867 additional cost to the solar panel system for a single housing unit.

 

At 18 kWh consumption, Texans would pay about $1.76 per day @ $0.097 kWh rate. In 2001, an average household used 10,653 kWh per year.[9] This comes about $1033.341 or $86.11175. If this figure were a base for the cost analysis, $30,000 expenditure on solar panel would require 29 years just to break even. By then, the world's technology would have advanced significantly. Such panel would look like an audio cassette deck system. Average electricity consumption in USA from 1949 to 2005 has risen at 5.6% a year. Meeting the growing need of energy needs is one of the primary method in which people are better off than they were before. The government's insistent on stifling this very need in order to realize their wanton fantasy is destructive and regressive.

 

Where would they propose to place all these panels? Apparently, nowhere. Recently, Senator DiFi of California [D] begged that no solar panels to be placed in the Mojave Desert by raising NIMBYs in which the anemic Governator responded by saying, "If we cannot put solar power plants in the Mojave desert, I don't know where the hell we can put it." [10] They want all of the benefits without any cost. This is how these people work.

 

You see folks; there is no Hope and Change. The Hope and Change is a nicer word for the Doom and Gloom. Everywhere you turn where you hear their complaints, stories, wants, desires, and others, they are filled with doom and gloom. The declaration of "hope" is a dream. It is neither something that has been realized nor will likely be realized. Rich people do not say, 'I hope to be rich someday.' Wise do no declare themselves as educated. In economics, I cannot think of very many liberal economic policies that have improved lives. Their policies are the sister of fascism, Marxism, and socialism. The record is very clear, as we know today. As of 2009, places where government is absent from our lives, people are better off. Places where government has heavy hand in it people are worse off. (I am echoing the statement of Milton Friedman) I think we should strive for betterment, not regression in the name of progress by the progressives who holds no progressive ideas. Would these progressives leave people and this country alone if we give them drugs, entertainments, and sex? No, they will not. They will simply discover new things which they can direct their complaints. That is how they work.

 

 

[1, Obama pledges to end oil dependency | 8/29/2008 : http://abclocal.go.com/kgo/story?section=news/politics&id=6359976 ]

[2, US Oil Usage: http://tonto.eia.doe.gov/country/index.cfm ]

[3, US Energy Sources: http://en.wikipedia.org/wiki/Energy_in_the_United_States ]

[4, Solar PVWatt: http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/US/code/pvwattsv1.cgi ]

[5, Solar kWh cost: http://www.solar-electric.com/solar_system_costs.htm]

[6, Number of houses in Texas : http://quickfacts.census.gov/qfd/states/48000.html]

[7. Tesla Roadster: http://en.wikipedia.org/wiki/Tesla_Roadster ]

[8. Energy Usage from 1949 to 2006: http://www.eia.doe.gov/emeu/aer/txt/ptb0809.html ]

[9. Electricity Usage Per House Hold in 2001: http://www.eia.doe.gov/emeu/reps/enduse/er01_us_tab1.html ]

[10. Senator Diane Feinstein. No Solar on Mojave Desert: http://www.foxnews.com/politics/2009/03/21/feinstein-dont-spoil-desert-solar-panels/]