RadioBanter - N3CVJ denies failures, while Presidential Commission admitsfailures.

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On Fri, 10 Jun 2005 13:44:01 -0400, Dave Hall
wrote in :

On Thu, 09 Jun 2005 20:56:30 -0700, Frank Gilliland
wrote:

If you have a hammer made in China and a hammer made in the USA, the
price is going to be the same because the market dictates the price.

Right, and when a hammer can be made cheaper in China, it forces the
American company to lower its price (Often resulting in sharp
reductions in overhead to keep a reasonable profit margin). At some
point the American company will no longer be able to compete.

Hence the success of Wally World.

Thank you for conceding my point. And with a perfect example.

And to expand further on your point, you left out the part about the
reduction of average income of American workers as a result of lost
jobs, thereby reducing overall spending in the economy (-including-
the sales of cheap imported products), shifting more people into the
no-tax bracket and -increasing- the tax burden on everyone else.

Lessening of consumers' purchasing power causes a reduction of demand,
and therefore the prices will drop further, which then leads to
deflation, which was a very real fear a few years back. Which is one
reason why the fed chopped interest rates so much.

Greenspan chopped the prime rate after Bush's tax "rebates" because
the expected revenue wasn't coming back -- instead of spending that
money people were paying down their credit cards. So the Fed dropped
the prime rate to encourage people to borrow and spend -more- money.
IOW, the Fed was bailing out the economy after Bush ****ed it up.

snip
The
price is set by the lowest price that someone is will to sell it for.

Wrong. It's set, as I stated before, by the laws of supply and demand.

That's too overly simplistic.

Not according to Friedman, Lindahl, Svennilsson, Myrdal, Ohlin,
Lundberg, etc, etc. But if -you- say so then it must be true.

I'm sure that none of them put it as simply as you did. They know, as
you should, that there are many mitigating factors that also influence
where a price is set. Think about things like monopolies and economic
collusion.

Think about taking a couple semesters of economics.

snip
Wrong again, Dave. The recommended fuel for the Model T was alcohol,

No Frank, the Model "T" had the capability to run on alcohol "as an
alternative" to gasoline. Henry Ford felt that allowing the car to run
on alcohol would sit well with local farmers who produced it. It was a
"bell and whistle" not a mandatory requirement.

Wrong, Dave. The preferred fuel for the Model T was ethanol, and any
Model T fanatic or Ford historian will tell you the same thing. In
fact, Henry Ford called alcohol "the fuel of the future. There are
more stills in this country than filling stations."

and that's what automobiles were built to use back in the early years
of their history. And it was great because there were a whole bunch of
backyard stills that were pumping out gallon after gallon of good ol'
moonshine. But along came a big foreign oil company that decided to
take a risk by dumping cheap gasoline on the market (at a net loss), a
move which shut down the stills and convinced auto manufacturers to
build their engines to run only on gasoline.

Titusville Pa. (Not all that far from me) is a foreign oil company?
We were producing "cheap" oil since 1859.

Except that it wasn't refined for gasoline until much later. Otto
invented the IC engine to run on alcohol, not oil or gas.

We didn't start importing oil on a large scale until 1970.

The world's first oil tanker was built in 1877. Henry Ford continued
to push for alcohol fuel until the 40's, even though big-time oil was
discovered in the middle east a decade earlier. The rest is history
(that you never learned).

Try entering "US first imported oil" into google and see what you
find.

You really should stop with the conspiracy theories Frank.....

Go back to school.

snip
If, back in the early 1900's, the alcohol producers were able to stay
in business (in a fair and competitive market, protected by import
tariffs) they most likely would have developed the technology to
produce much cheaper alcohol, technology that is only -now- being
developed. We now know that fuel-grade ethanol can be produced cheaply
on a large scale using specially developed yeasts & enzymes and vacuum
distillation, but there are no 'refineries' large enough to make it
profitably.

You also discount the potential environmental impact that large scale
raw material farms, as well as the effect of production emissions and
byproducts of the process might have on pollution.

The environmental impact of farming? That's a -real- stretch, Dave.
FYI, gasoline was originally just a worthless byproduct of refining
kerosene from crude oil. Regardless, part of the 'byproducts' left
over from the fermentation process of alcohol are left in the vats to
ferment the next batch of mash, while the rest is almost a perfect
fertilizer (and sometimes used as hog chow). Ethanol burns cooler so
there are no NO emissions (thereby reducing ozone pollution), there
are almost no hydrocarbon emissions, no need for lead or other
additives, no cyclic carcinogens, and the fuel burns more efficiently
than gasoline. Ethanol is clean at both ends. Get educated, Dave.

snip
Hindsight is always 20/20. We didn't know about such things as global
warming, ozone depletion, the finite availability of fossil fuel, and
the need for truly renewable fuel sources back in the early 1900's.
Oil was cheap, easy to extract, and plentiful. It was a no-brainer
back then.

Wrong again, Dave. Read up on the Free Alcohol Bill of 1906.

snip
I'm not nearsighted. No, in fact, I am a realist. Like you once told
me, change is inevitable. We can't go back to what we once were, so
our best chance is to adapt to what we will become.

Wrong -again-, Dave. Our best chance is to make decisions that will
provide the most benefit for us -as- those changes occur.

snip
Wrong again. Oil is inelastic because the -demand- remains constant
-regardless- of the price.

Demand is never constant. Demand changes with the season, economic and
social conditions around the world, and emerging technology in
developing nations. Overall, demand has been steadily increasing for
the last several years.

geez U R dum:

http://www.netmba.com/econ/micro/dem...sticity/price/

I'm tired of educating you, Dave. I think I'll let Twisty or someone
else do it for a while.

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Frank Gilliland wrote:
I'm tired of educating you, Dave. I think I'll let Twisty or someone
else do it for a while.

Well, shake it up, baby, now, (shake it up, baby)
TWIST and shout. (TWIST and shout)
C’mon c’mon, c’mon, c’mon, baby, now, (come on baby)
Come on and work it on out. (work it on out)

(1$ fab four)

Steveo wrote:
Frank Gilliland wrote:
I'm tired of educating you, Dave. I think I'll let Twisty or someone
else do it for a while.

Well, shake it up, baby, now, (shake it up, baby)
TWIST and shout. (TWIST and shout)
C'mon c'mon, c'mon, c'mon, baby, now, (come on baby)
Come on and work it on out. (work it on out)

(1$ fab four)

mopathetic, do you sing and dance to that at the truckstops?

On Fri, 10 Jun 2005 15:26:18 -0700, Frank Gilliland
wrote:

Greenspan chopped the prime rate after Bush's tax "rebates" because
the expected revenue wasn't coming back -- instead of spending that
money people were paying down their credit cards. So the Fed dropped
the prime rate to encourage people to borrow and spend -more- money.
IOW, the Fed was bailing out the economy after Bush ****ed it up.
++++++++++++++

Actually the Federal Reserve chopped the Federal Funds Rate during
2000 to 2003 period. This in turned caused banks to lower the prime
rate.

The process of controlling the Fed Rates is to pump in or take out
liquidity in the markets. Lower rates in a recession to stave off
defaltion. Raise rates when teh economy starts to heat up to controll
inflation. The Federal Reserve was very scared in 2000 that the US
would follow Japan. The consumer stimulation in the economy was
purposely done so that Deflation and Fed Rates would not fall below
1%. During Japan's deepest deflation period of 1997 to 2000 their
Central Bank rated never got abor 0.5%. The lower rate was as low
0.01%. The Japan Central Bank at times was literally giveing money
away and few one were taking then up on their offer.

One can debate the merits of teh Fed's move on money policy over the
past five yrs. In doing so you must consider which of the two evils in
worse? Between two and three yrs of deflation or four to five yrs of
stagnation? The Fed took the road of Stagnation considering the
wholesale lack of control on the part of Government to curtail
spending. Funny how the Republicans always criticized the Democrats on
their spending habits! I thought Republicans were supposed to fiscal
responsible? They spend money just as fast if not faster than
democrats.

james

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

Tariffs have nothing to do with inflation directly. But it can
stimulate it by initiating price increases.
******

Tariffs if used on short term basis will have small effects on
inflation. When used as a part of long term policy and become over
bearing then they can become a direct cause and effect to inflation.
Producers can absorb costs spikes that are one time occuring or short
term. If they remain long term then the producer must pass the cost of
tariffs on to the consumer in higher prices. Thus infaltion.

james

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

No, they were expensive because the cost to manufacture them was much
higher. Both advances in technology and in manufacturing as well as
finding cheaper sources of labor have resulted in price reductions.
*****

Having worked in consumer electronics manufactoring here in the US and
abroad, I would hardly believe that the material cost for the most
expensive CB radio to exceed $50. Labor another $10 per unit. Most
likely the material cost is between $20 and $40 and labor about $3 to
$4. Manufacturer's markup is more likely 300% to 500%. Considering
that marketing and shipping costs will equal the sum total of direct
material and direct labor costs.

The last consumer electronic product that I worked on had a material
cost of $26 and a US labor cost of $7 per unit. Foreign labor cost in
Mexico only reduced labor to about $5 per unit. We were doing about 1+
million units per year. In high volume, high automated manufacturing,
labor is not your major cost factor. It is overhead and variations.
Overhead in the US has gone ape in the past ten yrs. This includes
electricity, insurance, worker training and other items. Variation is
the changes in cost of piece parts due to volitility in shipping cost
due mainly to variations in oil prices.

james

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

That is why competition is so important for a free market economy.
******

Actually in a free market society I often find that the manufacturer
that has deep pockets has distinct advantages over smaller less
affluent manufacturers. They can afford to sell at rediculously low
profit margins to drive competition out or to control who gets into
the market.

james

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

I think you need to go back to school. You don't quite have a complete
grasp of global economics and the dynamics of the free market and the
effects of competition on the selling price. Demand causes the price
to rise. Competition causes the price to fall.
********

Demand and shortages influence pricing.

Dumping will cause prices to fall. Companies with deep pockets can
afford to dump product on the market for very low profit margins to
either gain market share or drive competition from the market. Thus in
hopes that they can recover profits in the near future with higher
prices and the resulting higher profit margins.

All too often in global economics discussions is that in the
manufacturering of consumer products one forgets that the consumer is
a fad conscience buyer. Getting to market to late or to early too many
times and you are staring bankruptcy head on. Life cycles of many fad
products may be as little as six months. Often it is two yrs. Even at
this rate so much has to be rolled into R&D to pump out the next
generation of products. R&D is paid for by profits. That is why deep
pocket corporations that can affors low profit margins and still fund
R&D will ultimately drive smaller less affluent companies out of some
of the consumer market.

THe saving grace to competiton is when a product is so low a run rate
that large companies find it not worth their time to get into such a
market. A free market society does not insure smooth steady even
prices. Instead it better marries high production companies with high
running products and low running products with companies that
specialize in small production. 30,000 units per year would be
considered in most circles small production. 5,000 units per yr would
be almost a cottage industry. Large mass production would be in the 1
million per yr run rates and higher.

Also remember this to stay in a market it is necessary that profit be
at least what one could get in a passbook savings account for the
value of all capital assets of the company. IF a company had 1 billion
in assets and a passbook savings account is 2%, then the company
making a product would need to make 20 million or it is better to sell
the assets and go find something else to do.

james

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

If you are trying to say that we can't really control inflation as
well as some might like to believe, then I agree with you.
****

The best we can do is to stay ahead of it.

james

On Sat, 11 Jun 2005 17:29:11 GMT, james wrote
in :

On Fri, 10 Jun 2005 15:26:18 -0700, Frank Gilliland
wrote:

Greenspan chopped the prime rate after Bush's tax "rebates" because
the expected revenue wasn't coming back -- instead of spending that
money people were paying down their credit cards. So the Fed dropped
the prime rate to encourage people to borrow and spend -more- money.
IOW, the Fed was bailing out the economy after Bush ****ed it up.
++++++++++++++

Actually the Federal Reserve chopped the Federal Funds Rate during
2000 to 2003 period. This in turned caused banks to lower the prime
rate.

The "prime rate" is set by Greenspan, not the banks -- it is the rate
at which the Fed loans money -to- the banks. Greenspan started cutting
the prime rate back in 1998 because the financial crises of Asia and
Russia threatened to destabilize the global economy. Ironically, it
was mostly because of those cuts that our trade with China turned from
a 300 billion dollar surplus into a 250 billion dollar deficit in just
a few years.

The process of controlling the Fed Rates is to pump in or take out
liquidity in the markets. Lower rates in a recession to stave off
defaltion. Raise rates when teh economy starts to heat up to controll
inflation. The Federal Reserve was very scared in 2000 that the US
would follow Japan. The consumer stimulation in the economy was
purposely done so that Deflation and Fed Rates would not fall below
1%. During Japan's deepest deflation period of 1997 to 2000 their
Central Bank rated never got abor 0.5%. The lower rate was as low
0.01%. The Japan Central Bank at times was literally giveing money
away and few one were taking then up on their offer.

One can debate the merits of teh Fed's move on money policy over the
past five yrs. In doing so you must consider which of the two evils in
worse? Between two and three yrs of deflation or four to five yrs of
stagnation? The Fed took the road of Stagnation considering the
wholesale lack of control on the part of Government to curtail
spending. Funny how the Republicans always criticized the Democrats on
their spending habits! I thought Republicans were supposed to fiscal
responsible? They spend money just as fast if not faster than
democrats.

No doubt.

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On Sat, 11 Jun 2005 17:34:04 GMT, james wrote
in :

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

Tariffs have nothing to do with inflation directly. But it can
stimulate it by initiating price increases.
******

Tariffs if used on short term basis will have small effects on
inflation. When used as a part of long term policy and become over
bearing then they can become a direct cause and effect to inflation.
Producers can absorb costs spikes that are one time occuring or short
term. If they remain long term then the producer must pass the cost of
tariffs on to the consumer in higher prices. Thus infaltion.

The price of foreign products goes up as a result of import tariffs,
which encourages increased domestic production and the creation of
more jobs. The higher prices are therefore offset by the resulting
stimulation of the domestic economy. The important thing to note here
is that import tariffs don't stimulate the economy if they are used
for just one or two products -- it needs to be a comprehensive package
that includes across-the-board import tariffs on finished products,
export restrictions on raw materials, tax incentives/penaties against
US coroporations that operate mostly inside/outside the border, etc.

The problem with such a package would be that certain treaties and
trade agreements would need to be repealed. But since most of those
agreements were made at the prompting of politicians that were later
hired by foreign corps (or US shell corps) that directly benefited
from those agreements, dropping those trade agreements shouldn't be a
problem after a little public education campaign.

But hey, it's never going to happen so I'll just go replace a few
hoses in the truck and be quiet.

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On Sat, 11 Jun 2005 13:01:52 -0700, Frank Gilliland
wrote:

The "prime rate" is set by Greenspan, not the banks -- it is the rate
at which the Fed loans money -to- the banks. Greenspan started cutting
the prime rate back in 1998 because the financial crises of Asia and
Russia threatened to destabilize the global economy. Ironically, it
was mostly because of those cuts that our trade with China turned from
a 300 billion dollar surplus into a 250 billion dollar deficit in just
a few years.
****
Greenspan is the chairman of the Federal Reserve System and also
serves as head of the FOMC. Grenspan himself does not change the
Federal Funds Rate, but instead it is a vote of the FOMC, Federal Open
Market Committe. The Federal Funds Rate may also be known as the
Discount Rate. The Discount Rate or Federal Funds Rate has three
categories. This is on money that the Federal Reserve System lends to
member depository banks depending on their dredit worthyness. The best
or primary discount rate is an overnight interest rate given to the
best banks. The Seconbdary credit is for a longer period, up to 30
days, given to banks with less than exemplary credit ratings. The
Secondary Credit rate is also higher. Then there is the sessonal rate
which is above the secondary credit rate and below the Prime Rate.

The Prime Rate is the interest rate charged by banks for short-term
loans to their most creditworthy customers whose credit standing is so
high that little risk to the lender is involved.

From that the rest of the interest rates are set.

Yes you are correct that the Fed Funds Rates were cut 50 basis points
in 1998. Again it was with pressure from the Asian and Russian
markets. You also failed to mention that in 1999 and in 2000 the FOMC
raised Funds Rates 50 and 75 basis points respectively. I doubt that
these had much affect on the trade deficit. Instead I would more
attribute them to the fact that major high tech corporations and
automotive corporations were pumping well in excess of 100 billion
dollars in capital investments into China from 1998 to 2003. Add to
that the falling dollar with respect to the Euro and the Cinese Yuan
is pegged to our dollar has not helped the US trade deficit with
China.

Sorry I cannot accept the FOMC rate reductions in 2001 to 2003 as a
reason for the increase in the trade deficit.

james

On Sun, 12 Jun 2005 01:04:08 GMT, james wrote
in :

On Sat, 11 Jun 2005 13:01:52 -0700, Frank Gilliland
wrote:

The "prime rate" is set by Greenspan, not the banks -- it is the rate
at which the Fed loans money -to- the banks. Greenspan started cutting
the prime rate back in 1998 because the financial crises of Asia and
Russia threatened to destabilize the global economy. Ironically, it
was mostly because of those cuts that our trade with China turned from
a 300 billion dollar surplus into a 250 billion dollar deficit in just
a few years.
****
Greenspan is the chairman of the Federal Reserve System and also
serves as head of the FOMC. Grenspan himself does not change the
Federal Funds Rate, but instead it is a vote of the FOMC, Federal Open
Market Committe.

A vote based on the recommendation of the Chairman. And I might be
mistaken about this, but I don't recall the Fed ever voting against
any of Greenspan's recommendations.

The Federal Funds Rate may also be known as the
Discount Rate. The Discount Rate or Federal Funds Rate has three
categories. This is on money that the Federal Reserve System lends to
member depository banks depending on their dredit worthyness. The best
or primary discount rate is an overnight interest rate given to the
best banks. The Seconbdary credit is for a longer period, up to 30
days, given to banks with less than exemplary credit ratings. The
Secondary Credit rate is also higher. Then there is the sessonal rate
which is above the secondary credit rate and below the Prime Rate.

The Prime Rate is the interest rate charged by banks for short-term
loans to their most creditworthy customers whose credit standing is so
high that little risk to the lender is involved.

From that the rest of the interest rates are set.

I learned it a little different. I'll check my book-learnin' and get
back to you on this.

Yes you are correct that the Fed Funds Rates were cut 50 basis points
in 1998. Again it was with pressure from the Asian and Russian
markets. You also failed to mention that in 1999 and in 2000 the FOMC
raised Funds Rates 50 and 75 basis points respectively. I doubt that
these had much affect on the trade deficit.

That's why I didn't bother mentioning them. I also didn't bother
mentioning Greenspan's appointment and quick action after the crash of
1987 (during Reagan's term, just to refresh Dave's memory).

Instead I would more
attribute them to the fact that major high tech corporations and
automotive corporations were pumping well in excess of 100 billion
dollars in capital investments into China from 1998 to 2003. Add to
that the falling dollar with respect to the Euro and the Cinese Yuan
is pegged to our dollar has not helped the US trade deficit with
China.

Sorry I cannot accept the FOMC rate reductions in 2001 to 2003 as a
reason for the increase in the trade deficit.

Because too much of the money that's being borrowed at the lower rates
is being funneled out of the country as foreign investment capital,
which explains why it's having almost no effect at stimulating the
economy -- it's not ending up in the hands of American consumers as
was expected. This also explains why the rate has been held so low for
such an unprecedented length of time. But the Fed doesn't establish
foreign policy, and they can't hold the interest rates down forever.
Something has to break pretty soon. Kinda like the hoses in my truck
if I hadn't replaced them today.

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On Sat, 11 Jun 2005 20:56:54 -0700, Frank Gilliland
wrote:

Because too much of the money that's being borrowed at the lower rates
is being funneled out of the country as foreign investment capital,
which explains why it's having almost no effect at stimulating the
economy -- it's not ending up in the hands of American consumers as
was expected. This also explains why the rate has been held so low for
such an unprecedented length of time. But the Fed doesn't establish
foreign policy, and they can't hold the interest rates down forever.
Something has to break pretty soon. Kinda like the hoses in my truck
if I hadn't replaced them today.
*******

And not to mention that the FMOC has rasied rates eight times in their
last eight meetings. I guess inflation is not heating up?

No, the trade deficit with China is due to China pegging their
currency to ours. This sets a fixed currency exchange rate that has
existed now for about ten yrs. China can pump goods into the US and
not loose value in currency exchange. The US consumer has borrowed
totheir friggin eyeballs and about 60% of their spending has gone into
buying Chinese goods simply because they are affordable and now have
relatively decent quality.

Yes the borrowing has gone to China in the flow of currency for goods.
You ought to look at some data on the US economy lately and not dwell
on what happened 6 yrs ago. Look at trends of government spending,
consumer debt, employment numbers.

james

On Sun, 12 Jun 2005 23:18:59 GMT, james wrote
in :

On Sat, 11 Jun 2005 20:56:54 -0700, Frank Gilliland
wrote:

Because too much of the money that's being borrowed at the lower rates
is being funneled out of the country as foreign investment capital,
which explains why it's having almost no effect at stimulating the
economy -- it's not ending up in the hands of American consumers as
was expected. This also explains why the rate has been held so low for
such an unprecedented length of time. But the Fed doesn't establish
foreign policy, and they can't hold the interest rates down forever.
Something has to break pretty soon. Kinda like the hoses in my truck
if I hadn't replaced them today.
*******

And not to mention that the FMOC has rasied rates eight times in their
last eight meetings. I guess inflation is not heating up?

The few recent and paltry increases hardly compare to the impact
caused from the length of time it has been held extraordinarily low.
And since the economy is being manipulated by the Fed, there isn't
much point in speculating whether inflation is bad or good since the
results won't follow their natural economic course -- the end result
is that it's good for the banks of the Fed.

No, the trade deficit with China is due to China pegging their
currency to ours. This sets a fixed currency exchange rate that has
existed now for about ten yrs.

I've never heard that. Got a link?

China can pump goods into the US and
not loose value in currency exchange. The US consumer has borrowed
totheir friggin eyeballs and about 60% of their spending has gone into
buying Chinese goods simply because they are affordable and now have
relatively decent quality.

The US consumer doesn't borrow money at the prime interest rate.

Yes the borrowing has gone to China in the flow of currency for goods.

But consumers spend money that is borrowed from consumer lenders at
consumer interest rates. If any of that money came from the Fed it did
so indirectly.

You ought to look at some data on the US economy lately and not dwell
on what happened 6 yrs ago. Look at trends of government spending,
consumer debt, employment numbers.

I look at a lot of numbers, including the ones you mentioned. But
while many of those numbers look good on the bottom line, they are
terribly misleading (as I'm sure you are already aware).

For example, Bush claimed to have created a total of 9 million new
jobs at the end of 2004. Now a person is employed (according to the
executive administration) if he/she works no less than one hour a
month. IOW, those 9 million new jobs could be the economic equivalent
of only a million or so full-time jobs. And that doesn't account for
the wages earned at these jobs, many (or perhaps most) of which are at
or near minimum wage. Nor does it account for lost pensions, wage and
benefit cutbacks, people that were forced into lower-paying jobs, or a
host of other employment statistics that don't show up in Bush's count
of 9 million new jobs. So the -real- issue is -not- how many new jobs
have been created, but what the effect has been on the GNP per capita,
and the effect hasn't been positive. Bush may have created 9 million
new jobs but the average household income -DROPPED- by 9%. In my book
that's called a 'loss', especially when prices have actually increased
in the same time period. But then you have to look at how inflation is
calculated, which is another horribly misleading statistic.....

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On Fri, 10 Jun 2005 15:26:18 -0700, Frank Gilliland
wrote:

Lessening of consumers' purchasing power causes a reduction of demand,
and therefore the prices will drop further, which then leads to
deflation, which was a very real fear a few years back. Which is one
reason why the fed chopped interest rates so much.

Greenspan chopped the prime rate after Bush's tax "rebates" because
the expected revenue wasn't coming back -- instead of spending that
money people were paying down their credit cards. So the Fed dropped
the prime rate to encourage people to borrow and spend -more- money.
IOW, the Fed was bailing out the economy after Bush ****ed it up.

Well, that's certainly your opinion. Even if it is wrong. Look up
"deflation" as it related to the recent recession and see what you
find.

I'm sure that none of them put it as simply as you did. They know, as
you should, that there are many mitigating factors that also influence
where a price is set. Think about things like monopolies and economic
collusion.

Think about taking a couple semesters of economics.

Why? I understand the process.

snip
Wrong again, Dave. The recommended fuel for the Model T was alcohol,

No Frank, the Model "T" had the capability to run on alcohol "as an
alternative" to gasoline. Henry Ford felt that allowing the car to run
on alcohol would sit well with local farmers who produced it. It was a
"bell and whistle" not a mandatory requirement.

Wrong, Dave. The preferred fuel for the Model T was ethanol, and any
Model T fanatic or Ford historian will tell you the same thing.

From:
http://www.ford.com/en/vehicles/spec...al/ethanol.htm

"Ford's interest in using ethanol as an alternative fuel goes back to
the days of Henry Ford. Ford planned to use ethanol as the primary
fuel for his Model T, however, the less expensive gasoline emerged as
the dominant fuel."

You win a point for getting it almost right. Yes, it would seem that
they planned to use alcohol, but Ford soon realized that the less
expensive gasoline would become the dominant fuel.

In
fact, Henry Ford called alcohol "the fuel of the future. There are
more stills in this country than filling stations."

He sure missed the call on that one......

and that's what automobiles were built to use back in the early years
of their history. And it was great because there were a whole bunch of
backyard stills that were pumping out gallon after gallon of good ol'
moonshine. But along came a big foreign oil company that decided to
take a risk by dumping cheap gasoline on the market (at a net loss), a
move which shut down the stills and convinced auto manufacturers to
build their engines to run only on gasoline.

Titusville Pa. (Not all that far from me) is a foreign oil company?
We were producing "cheap" oil since 1859.

Except that it wasn't refined for gasoline until much later. Otto
invented the IC engine to run on alcohol, not oil or gas.

It doesn't matter what the I.C. engine was invented to run on
initially. It's what it eventually ran on as a practical motor car
engine that matters.

From:
http://www.radford.edu/~wkovarik/papers/fuel.html

"Another early developer of the internal combustion engine was German
inventor Nicholas August Otto. In 1860, Otto used ethyl alcohol as a
fuel in an early engine because it was widely available for spirit
lamps throughout Europe. He devised a carburetor which, like Morey's,
heated the alcohol to help it vaporize as the engine was being
started. But a January 1861 patent application with the Kingdom of
Prussia was turned down, probably because heated alcohol carburetion
was already being widely used in spirit lamps.32 It is interesting to
note that Otto's initial financing came from Eugen Langen, who owned a
a sugar refining company that probably had links to the alcohol
markets of Europe. Of course, the Otto & Langen company went on to
success in the 1870s by producing stationary gas engines (usually
powered by coal gas) and the later "Otto-cycle" engine was fueled
primarily with gasoline but was still adaptable to alcohol or benzene
from coal."

We didn't start importing oil on a large scale until 1970.

The world's first oil tanker was built in 1877. Henry Ford continued
to push for alcohol fuel until the 40's, even though big-time oil was
discovered in the middle east a decade earlier. The rest is history
(that you never learned).

Until 1970, we relied on our own sources of oil. American oil
production peaked then. It has been falling ever since as we have
become more dependant on foreign oil.

Try entering "US first imported oil" into google and see what you
find.

You really should stop with the conspiracy theories Frank.....

snip
If, back in the early 1900's, the alcohol producers were able to stay
in business (in a fair and competitive market, protected by import
tariffs) they most likely would have developed the technology to
produce much cheaper alcohol, technology that is only -now- being
developed. We now know that fuel-grade ethanol can be produced cheaply
on a large scale using specially developed yeasts & enzymes and vacuum
distillation, but there are no 'refineries' large enough to make it
profitably.

You also discount the potential environmental impact that large scale
raw material farms, as well as the effect of production emissions and
byproducts of the process might have on pollution.

The environmental impact of farming? That's a -real- stretch, Dave.

It's true nonetheless. Ethanol comes primarily from corn. Corn needs
to be grown. Acreage used for ethanol production would be unavailable
for food growth. Also fertilizers used for corn, could cause a local
runoff problem in nearby waterways (as a boater I am conscious of
these). Excess nitrogen in ponds and lakes has a damaging effect on
the eco-system of that waterway.

FYI, gasoline was originally just a worthless byproduct of refining
kerosene from crude oil.

I see you've been doing a little crash internet researching. (What
happened to those wonderful books?) That's almost word for word the
description used on one site.

Here's some mo
http://www.ethanol-gec.org/corn_eth.htm

It would seem that there have been some improvements in the efficiency
in the production of alcohol in the last 10 years or so. But there are
still some issues. Still, I agree that we should look into it. I owe
no allegience to gasoline. I tend to favor that which is cheap.

Regardless, part of the 'byproducts' left
over from the fermentation process of alcohol are left in the vats to
ferment the next batch of mash, while the rest is almost a perfect
fertilizer (and sometimes used as hog chow). Ethanol burns cooler so
there are no NO emissions

Wrong. There are "less" of some emissions, like hydrocarbons, but
there are still some VOC's and other byproducts.

(thereby reducing ozone pollution), there
are almost no hydrocarbon emissions,

Wait, you just said above that there are NO emissions. Make up your
mind Frank.

no need for lead or other
additives, no cyclic carcinogens, and the fuel burns more efficiently
than gasoline. Ethanol is clean at both ends. Get educated, Dave.

How's this for education:

From:
http://www.dep.state.pa.us/dep/deput...ons_062596.htm

"Alcohol fuels provide America a way to reduce our oil dependence, but
concerning exhaust emissions, test results are disappointing.
Alcohol-fueled vehicles emit large amounts of some of the most
reactive VOCs, particularly formaldehyde and acetaldehyde.
Formaldehyde, acetaldehyde, benzene, and 1,3-butadiene are VOCs
considered to be air toxics. Air toxics are known cancer-causing
chemicals. Alcohol-fueled vehicles usually produce more air toxics
than any other vehicle fuel."

Hindsight is always 20/20. We didn't know about such things as global
warming, ozone depletion, the finite availability of fossil fuel, and
the need for truly renewable fuel sources back in the early 1900's.
Oil was cheap, easy to extract, and plentiful. It was a no-brainer
back then.

Wrong again, Dave. Read up on the Free Alcohol Bill of 1906.

So you're denying that oil was cheaper to produce?

Read into the term "Net Energy Value" and then see how it has applied
to alcohol over the years. Only recently has the technology advanced
to the point where the NEV value is significantly positive.

If you would agree to back off on your blind, relentless quest to call
me wrong at every turn, I can certainly agree that alcohol has the
potential of augmenting and offsetting our need for oil. At the
current high oil prices, alcohol may be able to compete on a price
basis. But cars cannot run on pure alcohol without modifications.
Alcohol attracts and retains water, which cause the corrosion of metal
parts. Alcohol also deteriorates rubber parts. Some changes would also
have to be made to find the optimal stoichiometric air fuel ratio for
proper combustion. For gasoline it is currently around 14.7:1. For
newer cars with fuel injection systems and OBD-II Engine management
systems, the changes could be made in firmware. For older cars with
carburetors, the changes would have to be done by changing jets and
metering rods (After replacing all the rubber parts).

snip
I'm not nearsighted. No, in fact, I am a realist. Like you once told
me, change is inevitable. We can't go back to what we once were, so
our best chance is to adapt to what we will become.

Wrong -again-, Dave. Our best chance is to make decisions that will
provide the most benefit for us -as- those changes occur.

Which is what I meant when I said to anticipate and "adapt" to those
changes. For instance, if I was a "young-un" in school right now, I
would not pick manufacturing as a career path. Right now your best bet
seems to be to pick a career that deals with either information,
technology, entertainment, or professional services.

snip
Wrong again. Oil is inelastic because the -demand- remains constant
-regardless- of the price.

Demand is never constant. Demand changes with the season, economic and
social conditions around the world, and emerging technology in
developing nations. Overall, demand has been steadily increasing for
the last several years.

geez U R dum:

http://www.netmba.com/econ/micro/dem...sticity/price/

Nice site. But it does not address my claim that factors other than
price can affect demand.

I'm tired of educating you, Dave. I think I'll let Twisty or someone
else do it for a while.

Maybe you should. You're doing a **** poor job of it.

That 20 year old obsolete education you have is showing.

Dave
"Sandbagger"

On Sat, 11 Jun 2005 17:34:04 GMT, james wrote:

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

Tariffs have nothing to do with inflation directly. But it can
stimulate it by initiating price increases.
******

Tariffs if used on short term basis will have small effects on
inflation. When used as a part of long term policy and become over
bearing then they can become a direct cause and effect to inflation.
Producers can absorb costs spikes that are one time occuring or short
term. If they remain long term then the producer must pass the cost of
tariffs on to the consumer in higher prices. Thus infaltion.

Thank you for explaining it in a far more comprehensive way than I
did.

Tariff are a cause, not an effect.

Dave
"Sandbagger"

On Sat, 11 Jun 2005 17:50:18 GMT, james wrote:

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

No, they were expensive because the cost to manufacture them was much
higher. Both advances in technology and in manufacturing as well as
finding cheaper sources of labor have resulted in price reductions.
*****

Having worked in consumer electronics manufactoring here in the US and
abroad, I would hardly believe that the material cost for the most
expensive CB radio to exceed $50.

At what point in time? Today, it's probably even less than that.

Labor another $10 per unit. Most
likely the material cost is between $20 and $40 and labor about $3 to
$4. Manufacturer's markup is more likely 300% to 500%. Considering
that marketing and shipping costs will equal the sum total of direct
material and direct labor costs.

And include any taxes or duties that might apply from the country of
origin.

The last consumer electronic product that I worked on had a material
cost of $26 and a US labor cost of $7 per unit. Foreign labor cost in
Mexico only reduced labor to about $5 per unit. We were doing about 1+
million units per year. In high volume, high automated manufacturing,
labor is not your major cost factor. It is overhead and variations.

No argument. Overhead,as well as direct labor,is cheaper in 3rd world
countries. My company moved a bunch of product lines from Taiwan to
Mexico, just to save a buck or two. When you make millions of items
that adds up to a substantial profit. There is no way that a U.S.
factory could compete under those cutthroat conditions.

One of our products had a BOM of $43. We sold it for $99. Even
considering shipping, R&D and other absorbed costs, that's a healthy
margin. But when we started a new advanced product, the BOM was
initially over $70 (due mostly to brand new VLSI chips) and market
research showed that we could only expect to sell it for $115 max.
When other costs were factored in, we were actually selling it at a
loss (In order to get market exposure). So we had to start an
aggressive cost reduction program to cut both material and labor costs
to bring our margins back in line. And we already manufactured
overseas. Such is the nature of high volume, low margin products.

Overhead in the US has gone ape in the past ten yrs. This includes
electricity, insurance, worker training and other items. Variation is
the changes in cost of piece parts due to volitility in shipping cost
due mainly to variations in oil prices.

Yes, this is very true. But shipping costs and the effects of oil
prices should be the same no matter where you make it. Those factors
are just as volatile here as there are in China.

Dave
"Sandbagger"

On Sat, 11 Jun 2005 17:55:33 GMT, james wrote:

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

That is why competition is so important for a free market economy.
******

Actually in a free market society I often find that the manufacturer
that has deep pockets has distinct advantages over smaller less
affluent manufacturers. They can afford to sell at rediculously low
profit margins to drive competition out or to control who gets into
the market.

That's also true. That's what some accuse Wal-Mart of doing right now.

Dave
"Sandbagger"

On Sat, 11 Jun 2005 18:23:49 GMT, james wrote:

On Wed, 08 Jun 2005 08:59:32 -0400, Dave Hall
wrote:

I think you need to go back to school. You don't quite have a complete
grasp of global economics and the dynamics of the free market and the
effects of competition on the selling price. Demand causes the price
to rise. Competition causes the price to fall.
********

Demand and shortages influence pricing.

Dumping will cause prices to fall. Companies with deep pockets can
afford to dump product on the market for very low profit margins to
either gain market share or drive competition from the market. Thus in
hopes that they can recover profits in the near future with higher
prices and the resulting higher profit margins.

Applied on a larger scale, that's known as deficit spending..... ;-)
Invest now, and recover more later.

All too often in global economics discussions is that in the
manufacturering of consumer products one forgets that the consumer is
a fad conscience buyer. Getting to market to late or to early too many
times and you are staring bankruptcy head on. Life cycles of many fad
products may be as little as six months.

Just look at the personal computer. (or the pet rock)

Often it is two yrs. Even at
this rate so much has to be rolled into R&D to pump out the next
generation of products. R&D is paid for by profits. That is why deep
pocket corporations that can affors low profit margins and still fund
R&D will ultimately drive smaller less affluent companies out of some
of the consumer market.

Or take my company. The unofficial motto is, "If you can't beat 'em,
Buy 'em".

THe saving grace to competiton is when a product is so low a run rate
that large companies find it not worth their time to get into such a
market. A free market society does not insure smooth steady even
prices. Instead it better marries high production companies with high
running products and low running products with companies that
specialize in small production. 30,000 units per year would be
considered in most circles small production. 5,000 units per yr would
be almost a cottage industry. Large mass production would be in the 1
million per yr run rates and higher.

Demand is what sometimes caused small companies to make those small
runs. If people need it and are willing to pay for it, SOMEONE will
make it.

Also remember this to stay in a market it is necessary that profit be
at least what one could get in a passbook savings account for the
value of all capital assets of the company. IF a company had 1 billion
in assets and a passbook savings account is 2%, then the company
making a product would need to make 20 million or it is better to sell
the assets and go find something else to do.

Commonly referred to as "return on investment" or ROI. It makes no
sense to go through all the trouble of manufacturing a product, when
you can take all of your startup capital and drop it into a securities
account and make more in return.

Dave
"Sandbagger"

On 13 Jun 2005 11:37:53 GMT, Steveo wrote:

That's one of my most fold memories of the 70's CB boom. Some of the
"breaks" were pretty large and a ton of fun. The best one in my area
was held at a small local amusement park, which was great for us
teenaged kids at the time.

There were always vendors hawking their latest equipment and
accessories. Then there were those guys selling amps out of their
trunks ;-)...

Dave
"Sandbagger"
http://home.ptd.net/~n3cvj

They had a big one monthly at the local ponderosa steak house near
here..same deal with the bootleg trunk sales. There was always the rumor
that 'Charlie' was in town too. g

About once a month, there would be those rumors of "Uncle Charlie" or
the "Candyman" as the FCC was known as back then, coming to town. It
was always a third hand account of someone's brother's cousin's friend
getting busted. But no one even knew the person directly. But just to
be safe, everyone stashed their amps, kept off the "extras", and toned
it down a notch or two.

Even during the coffee breaks the rumor mongers told of the FCC
raiding the coffee breaks looking for illegal stuff, and writing down
license plate numbers. No one ever saw them doing it though. I guess
some people just liked spoiling other people's fun.......

Dave
"Sandbagger"

On Mon, 13 Jun 2005 11:01:35 -0400, Dave Hall
wrote in :

On Fri, 10 Jun 2005 15:26:18 -0700, Frank Gilliland
wrote:

Lessening of consumers' purchasing power causes a reduction of demand,
and therefore the prices will drop further, which then leads to
deflation, which was a very real fear a few years back. Which is one
reason why the fed chopped interest rates so much.

Greenspan chopped the prime rate after Bush's tax "rebates" because
the expected revenue wasn't coming back -- instead of spending that
money people were paying down their credit cards. So the Fed dropped
the prime rate to encourage people to borrow and spend -more- money.
IOW, the Fed was bailing out the economy after Bush ****ed it up.

Well, that's certainly your opinion. Even if it is wrong. Look up
"deflation" as it related to the recent recession and see what you
find.

Like I said before, go take a couple semesters of economics.

I'm sure that none of them put it as simply as you did. They know, as
you should, that there are many mitigating factors that also influence
where a price is set. Think about things like monopolies and economic
collusion.

Think about taking a couple semesters of economics.

Why? I understand the process.

No, you don't.

snip
Wrong again, Dave. The recommended fuel for the Model T was alcohol,

No Frank, the Model "T" had the capability to run on alcohol "as an
alternative" to gasoline. Henry Ford felt that allowing the car to run
on alcohol would sit well with local farmers who produced it. It was a
"bell and whistle" not a mandatory requirement.

Wrong, Dave. The preferred fuel for the Model T was ethanol, and any
Model T fanatic or Ford historian will tell you the same thing.

From:
http://www.ford.com/en/vehicles/spec...al/ethanol.htm

"Ford's interest in using ethanol as an alternative fuel goes back to
the days of Henry Ford. Ford planned to use ethanol as the primary
fuel for his Model T, however, the less expensive gasoline emerged as
the dominant fuel."

You win a point for getting it almost right. Yes, it would seem that
they planned to use alcohol, but Ford soon realized that the less
expensive gasoline would become the dominant fuel.

Really? I seem to recall reading that he pushed for ethanol fuel well
into the 1940's. And didn't both the Germans and Japanese use alcohol
as their staple fuel during WWII?

In
fact, Henry Ford called alcohol "the fuel of the future. There are
more stills in this country than filling stations."

He sure missed the call on that one......

Some say that he was a couple steps ahead of his time.

and that's what automobiles were built to use back in the early years
of their history. And it was great because there were a whole bunch of
backyard stills that were pumping out gallon after gallon of good ol'
moonshine. But along came a big foreign oil company that decided to
take a risk by dumping cheap gasoline on the market (at a net loss), a
move which shut down the stills and convinced auto manufacturers to
build their engines to run only on gasoline.

Titusville Pa. (Not all that far from me) is a foreign oil company?
We were producing "cheap" oil since 1859.

Except that it wasn't refined for gasoline until much later. Otto
invented the IC engine to run on alcohol, not oil or gas.

It doesn't matter what the I.C. engine was invented to run on
initially. It's what it eventually ran on as a practical motor car
engine that matters.

From:
http://www.radford.edu/~wkovarik/papers/fuel.html

"Another early developer of the internal combustion engine was German
inventor Nicholas August Otto. In 1860, Otto used ethyl alcohol as a
fuel in an early engine because it was widely available for spirit
lamps throughout Europe. He devised a carburetor which, like Morey's,
heated the alcohol to help it vaporize as the engine was being
started. But a January 1861 patent application with the Kingdom of
Prussia was turned down, probably because heated alcohol carburetion
was already being widely used in spirit lamps.32 It is interesting to
note that Otto's initial financing came from Eugen Langen, who owned a
a sugar refining company that probably had links to the alcohol
markets of Europe. Of course, the Otto & Langen company went on to
success in the 1870s by producing stationary gas engines (usually
powered by coal gas) and the later "Otto-cycle" engine was fueled
primarily with gasoline but was still adaptable to alcohol or benzene
from coal."

Ok. So?

We didn't start importing oil on a large scale until 1970.

The world's first oil tanker was built in 1877. Henry Ford continued
to push for alcohol fuel until the 40's, even though big-time oil was
discovered in the middle east a decade earlier. The rest is history
(that you never learned).

Until 1970, we relied on our own sources of oil. American oil
production peaked then. It has been falling ever since as we have
become more dependant on foreign oil.

Production consumption. Foreign oil companies have held a sizeable
share of the market since the early 50's.

Try entering "US first imported oil" into google and see what you
find.

You really should stop with the conspiracy theories Frank.....

snip
If, back in the early 1900's, the alcohol producers were able to stay
in business (in a fair and competitive market, protected by import
tariffs) they most likely would have developed the technology to
produce much cheaper alcohol, technology that is only -now- being
developed. We now know that fuel-grade ethanol can be produced cheaply
on a large scale using specially developed yeasts & enzymes and vacuum
distillation, but there are no 'refineries' large enough to make it
profitably.

You also discount the potential environmental impact that large scale
raw material farms, as well as the effect of production emissions and
byproducts of the process might have on pollution.

The environmental impact of farming? That's a -real- stretch, Dave.

It's true nonetheless. Ethanol comes primarily from corn. Corn needs
to be grown. Acreage used for ethanol production would be unavailable
for food growth.

Wonderful! I guess that means the government won't be subsidizing any
more farmers to grow crops that will just end up rotting in waste
heaps, which should be -good- news to Republicans since they don't
like spending money on government handouts. By golly, farming could
finally go back to a free-market economy!

Also fertilizers used for corn, could cause a local
runoff problem in nearby waterways (as a boater I am conscious of
these). Excess nitrogen in ponds and lakes has a damaging effect on
the eco-system of that waterway.

I don't suppose you've ever heard of crop rotation..... doubtful,
since you haven't heard of anything else related to the subject. Ok,
the lesson for today is "Peas: Organic Nitrogen Replenishment". And
yes, peas can be fermented for ethanol just like any other veggie high
in carbs. And if you are worried about polluting the ponds and lakes,
don't you think it's time to switch to a fuel that doesn't dump acids
and carcinogens into the air where they are washed out by rain which
runs into rivers and streams that feed those ponds and lakes?

FYI, gasoline was originally just a worthless byproduct of refining
kerosene from crude oil.

I see you've been doing a little crash internet researching. (What
happened to those wonderful books?) That's almost word for word the
description used on one site.

Actually, it's almost a direct quote from a 1941 college chemistry
textbook. Looks like the author of the internet site has been doing
some reading at the library. Do you think the info on the internet
comes out of thin air? Well, in some cases it does, such as your
preposterous political propoganda. In other cases it comes from info
available at the library or learned at an institution of higher
education (which explains why you have such a hard time understanding
more advanced concepts). Try a library, Dave. Don't worry, the
librarians won't bite your head off for being ignorant -- they are
there to -help- developmentally disabled people such as yourself.

Here's some mo
http://www.ethanol-gec.org/corn_eth.htm

Interesting report. Now if you had actually read it you wouldn't have
bothered typing some of the rubbish you used earlier in your post and
in your previous post.

It would seem that there have been some improvements in the efficiency
in the production of alcohol in the last 10 years or so. But there are
still some issues. Still, I agree that we should look into it. I owe
no allegience to gasoline.

Who does? Well, except for some greedy oil barons.... a few crooked
politicians.... and maybe the spoiled offspring of someone with
careers in both fields....

I tend to favor that which is cheap.

This we already know, Dave.

Regardless, part of the 'byproducts' left
over from the fermentation process of alcohol are left in the vats to
ferment the next batch of mash, while the rest is almost a perfect
fertilizer (and sometimes used as hog chow). Ethanol burns cooler so
there are no NO emissions

Wrong. There are "less" of some emissions, like hydrocarbons, but
there are still some VOC's and other byproducts.

NO = Nitric Oxide, a product of air combustion at high temperatures.
And ethanol only has two carbon atoms -- so if the engine is running
rich, the only emissions you could get are a little C-water (CH2O, aka
Formaldehyde) and/or Formic acid, but those are catalyzed into CO2 and
H2O -much- easier than hydrocarbon emissions from gasoline. So do you
want to challenge me on chemistry too, Dave?

(thereby reducing ozone pollution), there
are almost no hydrocarbon emissions,

Wait, you just said above that there are NO emissions. Make up your
mind Frank.

I said there are no NO emissions. If you had known anything about the
subject before your recent crash-course on the internet you would have
known that what I wrote wasn't a typo.

no need for lead or other
additives, no cyclic carcinogens, and the fuel burns more efficiently
than gasoline. Ethanol is clean at both ends. Get educated, Dave.

How's this for education:

From:
http://www.dep.state.pa.us/dep/deput...ons_062596.htm

"Alcohol fuels provide America a way to reduce our oil dependence, but
concerning exhaust emissions, test results are disappointing.
Alcohol-fueled vehicles emit large amounts of some of the most
reactive VOCs, particularly formaldehyde and acetaldehyde.
Formaldehyde, acetaldehyde, benzene, and 1,3-butadiene are VOCs
considered to be air toxics. Air toxics are known cancer-causing
chemicals. Alcohol-fueled vehicles usually produce more air toxics
than any other vehicle fuel."

Wrong. Your source implies that benzene and other cyclic hydrocarbons
are products of alcohol combustion, which is simply not possible.
Those emissions are common to gasoline and -especially- diesel, but
not ethanol. As I said before, emissions from incomplete ethanol
combustion are easily catalyzed -- just like the catalytic converter
that's already in your car but much smaller and much more efficient.
And your quote makes no mention of the quantities of emissions which,
from an ethanol engine, are -much- lower than from an equivalent
gasoline engine.

If you want more info on the subject I suggest you look for info that
wasn't solicited by politicians.

Hindsight is always 20/20. We didn't know about such things as global
warming, ozone depletion, the finite availability of fossil fuel, and
the need for truly renewable fuel sources back in the early 1900's.
Oil was cheap, easy to extract, and plentiful. It was a no-brainer
back then.

Wrong again, Dave. Read up on the Free Alcohol Bill of 1906.

So you're denying that oil was cheaper to produce?

Is that what I said? Hmmm..... let's see now..... You said that "we
didn't know about such things as..... the finite availability of
fossil fuel, and the need for truly renewable fuel sources back in the
early 1900's". I replied with a reference that disputes what I just
quoted from your statement of ignorance. Yet you used that statement
to support your argument that the choice of gasoline (oil) over
ethanol was a "no-brainer" when, in fact, it was hotly disputed.
Gasoline -was- cheap and easy to produce from oil back then; but, as
Ford professed for decades, as shown by the Free Alcohol Bill of 1906,
and as demonstrated by your profound ignorance of the subject, it
certainly wasn't a "no-brainer".

Read into the term "Net Energy Value" and then see how it has applied
to alcohol over the years. Only recently has the technology advanced
to the point where the NEV value is significantly positive.

Just as stated in the article you cited, the NEV has changed because
of obsolete information.

For example, the energy available from an engine running ethanol was
thought to be low because the compression ratio of the early engines
were so low. The fact is that ethanol engines burn more efficiently
with a higher compression ratio, but gasoline had already cornered the
market when engines with high compression ratios became available. The
solution is to simply build an engine with a higher compression ratio
and reset the timing. It's a procedure that's been done for decades
with race cars. Or are you under the presumption that gasoline is the
fuel used at Daytona and Indy? It isn't. They use methanol, which is
just another type of alcohol (and, ironically, more oxygenated).

There is also the issue of low-pressure distillation, which yields
fuel-grade ethanol (99.5%) at a fraction of the cost of distillation
at normal atmospheric pressure because the desired azeotrope boils at
a much lower temperature (33.4C @ 95mm). In addition to a higher
boiling point, problems with distillation at atmospheric pressure
include the requirement for additional dehydration, and therefore more
energy and expense. The biggest expense of low-pressure distillation
is the capital outlay required to build an industrial-sized vacuum
still that won't implode, but that shouldn't be a problem unless the
government throws a monkey wrench in the works at the prompting of oil
lobbyists.

Etc, etc. So once again your argument is bogus.

If you would agree to back off on your blind, relentless quest to call
me wrong at every turn,

I can't help it, Dave -- you -ARE- wrong at every turn! Maybe I
wouldn't be so willing to point that out if you weren't so quick to
spew forth your opinions of things about which you know little or
nothing at all. At the very least you could take a day or two before
you rattle off a reply in order to do some research -- even if it's on
the internet -- and get your story right the -first- time. Maybe then
you wouldn't spend so much time trying to defend your speculative
rants with contradictions and lies, and more time staying on topic
with the issues. Maybe even providing a few facts to back up your
arguments..... aw hell, who am I kidding? LOL!

I can certainly agree that alcohol has the
potential of augmenting and offsetting our need for oil. At the
current high oil prices, alcohol may be able to compete on a price
basis. But cars cannot run on pure alcohol without modifications.

Some popular cars are currently manufactured as "dual-fuel" vehicles;
they can run on gasoline, alcohol, or any mixture of the two just like
the old Model-T. Converting a manufacturing plant to produce alcohol
engines takes very little effort because the modifications are simple.
In fact, many weekend mechanics have modified their own engines for
alcohol (try the Mother Earth News archives). There are many alcohol
conversion kits for small engines, and at least one manufacturer of
replacement engine gaskets assures that -all- of their products are
alcohol-friendly. The process of changing over is already underway.

Alcohol attracts and retains water, which cause the corrosion of metal
parts.

Lesson #17: An 'alcohol' is a class of organic compound of which there
are many different variations. Methanol is an alcohol and is -not-
hygroscopic. Ethanol is another, and it -is- hygroscopic.

Regardless, your argument has no foundation in fact. Ethanol has been
used as a blend with gasoline in the US for a couple decades and shows
no more corrosion than unblended gasoline. Many of your 'premium'
fuels are actually ethanol blends even though they are not advertised
as such, and they are used with no problems. In fact, Brazil uses a
22% blend and they haven't had any problems. In regular use, water
simply isn't a problem.

High-ethanol blends and pure (98+%) ethanol have the ability to absorb
a lot of water and still be usable. So unless you plan to store your
gas for months in an open container, water isn't a problem with these
fuels, either. The nice thing about alcohol is that even if it -does-
absorb a lot of water it can be redistilled to make it usable as fuel.
Regardless, water isn't such a bad thing -- it can actually -increase-
the power of the engine. Water injection systems have been used as
power boosters since WWII and are still used on race cars today.

So YET AGAIN your argument is bogus.

Alcohol also deteriorates rubber parts.

Alcohols generally cannot dissolve or degrade rubber or plastics. The
fact is that most plastics can tolerate alcohol -better- than gasoline
or engine oil. The myth comes from the fact that ethanol and methanol
molecules are smaller than the hydrocarbon molecules in gasoline and
oil, and can penetrate some pourous materials that are impervious to
gas or oil. Common problems are with cardboard gaskets and cracked or
hardened seals. The resulting leakage led some "experts" to believe
that the alcohol was degrading the gaskets and seals, but in fact it
wasn't -- either they were not designed to be impervious to alcohol or
they had already deteriorated to some degree (usually from age, but
sometimes even on the shelf). People should be more worried about the
atmosphere which contains ozone and Nitrogen oxides that are far more
destructive to rubber and plastics than alcohol, oil -or- gasoline.
And to further emphasize this point, propylene glycol (common auto
antifreeze) is a large-molecule alcohol that is used in almost every
water-cooled engine without any problems.

Another alcohol myth busted.

Some changes would also
have to be made to find the optimal stoichiometric air fuel ratio for
proper combustion. For gasoline it is currently around 14.7:1. For
newer cars with fuel injection systems and OBD-II Engine management
systems, the changes could be made in firmware.

If you want to use the big words then use them correctly: either use
"stoichiometric" or "air/fuel", but not both -- that's like saying
something like, "....the standing wave SWR ratio is....".

The stoichiometric ratio for ethanol is 9.0:1; for methanol it's
6.4:1. And like I said before, several cars are currently made for
using both ethanol and gasoline. It's done by an automatic adjustment
of the injectors based on the stoichiometric ratio of the fuel being
used. Yes, the adjustments are controlled by a computer, as are most
other vehicle systems these days. IOW, you are about 10 years behind
the times, Dave.

For older cars with
carburetors, the changes would have to be done by changing jets and
metering rods (After replacing all the rubber parts).

I don't think I would want to convert an old car to ethanol. Either
it's a classic in which case I'd pay for the gas, or it's a junker
that's got too many miles on it and wouldn't be worth the cost of
conversion. But it has been done just as you described. And it's been
done by many people for many, many years.

snip
I'm not nearsighted. No, in fact, I am a realist. Like you once told
me, change is inevitable. We can't go back to what we once were, so
our best chance is to adapt to what we will become.

Wrong -again-, Dave. Our best chance is to make decisions that will
provide the most benefit for us -as- those changes occur.

Which is what I meant when I said to anticipate and "adapt" to those
changes. For instance, if I was a "young-un" in school right now, I
would not pick manufacturing as a career path. Right now your best bet
seems to be to pick a career that deals with either information,
technology, entertainment, or professional services.

My point was that while we have the unique ability to adapt to our
environment, we can -also- adapt our environment to our benefit. Some
people want to change the environment to benefit only them. Others
want to make changes that will benefit everyone, if not now then in
the future. Color me liberal if you must, but I prefer to think in
terms of the latter.

snip
Wrong again. Oil is inelastic because the -demand- remains constant
-regardless- of the price.

Demand is never constant. Demand changes with the season, economic and
social conditions around the world, and emerging technology in
developing nations. Overall, demand has been steadily increasing for
the last several years.

geez U R dum:

http://www.netmba.com/econ/micro/dem...sticity/price/

Nice site. But it does not address my claim that factors other than
price can affect demand.

OF COURSE there are factors that affect demand. I stated the very same
point several posts ago when the topic first came up. What -you- can't
seem to understand is the concept of price inelasticity! The price of
gasoline is inelastic because price and demand have little effect on
each other. Changes in demand have little effect on price, and changes
in price have little effect on demand. This is really my fault for
expecting you to understand concepts that are beyond your ability to
look them up on google. But hey, I had to try, right?

I'm tired of educating you, Dave. I think I'll let Twisty or someone
else do it for a while.

Maybe you should. You're doing a **** poor job of it.

That 20 year old obsolete education you have is showing.

Jealosy may be one of the most difficult emotions to disguise, but I'm
confident that you can if you try just a little harder. Or, you can
try and prove me wrong.....LOL!!!

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On Thu, 16 Jun 2005 02:35:21 -0700, Frank Gilliland
wrote in
:

snip
You win a point for getting it almost right. Yes, it would seem that
they planned to use alcohol, but Ford soon realized that the less
expensive gasoline would become the dominant fuel.

Really? I seem to recall reading that he pushed for ethanol fuel well
into the 1940's. And didn't both the Germans and Japanese use alcohol
as their staple fuel during WWII?

I checked my facts on this; turns out that Germany got their oil/gas
from Romania. And with the US oil shortage during the war, ethanol was
manufactured -by the oil companies- for both the military and domestic
markets. In fact, during that time they actually -promoted- ethanol as
being a fuel that was superior to gasoline. Cars were made well into
the 40's that could run on ethanol.

snip
And your quote makes no mention of the quantities of emissions which,
from an ethanol engine, are -much- lower than from an equivalent
gasoline engine.

Correction: That should read: "....your quote makes no mention that
the quantities of emissions from an ethanol engine are -much- lower
than from an equivalent gasoline engine".

snip
Some popular cars are currently manufactured as "dual-fuel" vehicles;

More specifically they are called "Flexible-Fuel Vehicles", or FFV's,
and have been manufactured in several of the Chevy/GMC lines since at
least 2000.

snip
Alcohol also deteriorates rubber parts.

I just discovered an additional reason for the myth: some people tried
using -denatured- ethanol as fuel and ran into some problems. The
additives that are usually used to denature alcohol are compounds such
as acetone, MEK, toluene, and other solvents that do major damage to
rubber and plastics (and the human body). After this was discovered to
be the problem the government allowed ethanol to be denatured using
gasoline. More recently, regulations on the production of ethanol as a
fuel have been lifted, and you can now homebrew your own ethanol fuel
without a license.

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