Common Sense?

Brooklyn Skyline:The truck stops here

While most people came to air grievances about their local streets, a bigger picture emerged, according to DOT spokesman Tom Cocola.

“We got a lot of good feedback from people suggesting that the answer is we need more rail freight,” Cocola said. “And that’s true, New York doesn’t rely on rail freight the way other big cities do.”

People are stupid. There is just no other way to say it. People are stupid. If you think trucks go tooling around on surface streets in New York City from somewhere else on their way someplace else you are a putz. If you are a paid official in the "Department of Transportation" and you don't know any better, you make Michael Brown look overqualified. If a truck is on the streets of New York City they are (a) delivering something (b) picking up something or (c) hopelessly lost (I've been all three). Trust me, we aren't there because we don't have hobbies.

One of the unique things about NYC is how much light industry is still in the city. Most other places you are picking up loads out in an almost deserted industrial district. NYC you're backing off of a packed street, around the illegally parked cars, over the sidewalk, and into the building. The high density and the mixed use layout of the city makes it (in theory at least) much more walkable and amenable to mass transit use. The downside is people encounter a lot more trucks in the course of a day.

Almost all rail freight makes the journey to and from the train on a truck. Even if you forced all goods to come into NYC via train, You'd still have trucks hauling all the crap around city streets. Contrary to popular belief, train engineers can't back the boxcar up to the curb (or more often double park it) in the garment district and load up like a truck does. They also don't deliver to the local bodega. You talk about trucks on the turnpike versus freight trains, you might have a point. You complain about trucks in the City versus trains, you're just another NIMBY troll.

What a name

B.A.A.

enough to set fear in hearts of all sheepherders. Beware of trojan sheep!

Careful what you wish for

KnightTime Radio Show

11/26/05 - The Dept. of Labor has classified truck driving as unskilled labor. This unskilled labeling shapes the recruitment of new entrants as well as the training, pay, professionalism and social status of all American truck drivers. Furthermore, many other Western societies have already upgraded truck driving to a skilled occupation. Join our round-table discussion concerning the illogicality and deleterious effects of the DOL's ruling. Discussants: Owner-operators, Lyndon Nutt (30 years of experience)and Glen White (35 years of experience), Company Driver, Jimmy Frost, (15 years), Owner-operator, Ruth Jaroe, (6 years) and our new owner/operator, Warren Lark. After listening to this show, we hope that you will get involved to help us change this classification.

American Trucking Association (ATA) chairman Pat Quinn as quoted in The Trucker April 15-30,2006 "Non matter where you find Pat Quinn, He's promoting the Trucking Industry" by Lyndon Finney

"One of the issues we have with the classification of jobs in our Federal laws is that truck driving is not listed as a skilled job; therefore you cannot import legally like Canada does. .... I think that a change in the classification of the labor law could be helpful in letting us import skilled potential truck drivers for our industry."

The ATA and the Billy Big Riggers are on the same side of an issue. Unsurprisingly, the ATA's objective is not the same as the BBR's.

Would attacking Iran push them toward the West?

The Eighties Club: The USS Stark incident

The situation remained tense throughout the winter, but not until April 1988 did violence erupt once again in the Persian Gulf. Ten seamen were injured when the USN frigate Samuel B. Roberts struck an Iranian mine on April 14. Being careful to consult with Congress this time, President Reagan ordered a retaliatory strike against two Iranian oil platforms in the southern gulf -- platforms that served as bases for Iran's intelligence service. While one platform was shelled by the frigates Simpson and Bagley, Marines helicoptered to the second, seized it, planted explosive charges, and destroyed it. A few minutes later, the Simpson sank an Iranian patrol boat that had fired a missile at the USN guided-missile cruiser Wainwright. (The Wainwright defended itself by dispensing aluminum chaff in the air, which deflected the missile.) Meanwhile, near the Strait of Hormuz, two Iranian frigates and several gunboats were sunk by American warships and an F-14 Tomcat from the aircraft carrier USS Enterprise. During the day-long battle, a Cobra helicopter carrying two American crewmen was shot down by the Iranians.
This defeat at sea, coupled with grave setbacks in the land war with Iraq, persuaded Iranian leaders to seek improved relations with the West. The Ayatollah Khomeini agreed with Hashemi Rafsanjani, Speaker of the Iranian Parliament, on the need to pursue a new foreign policy that would defuse tensions in the Persian Gulf. As for the United States, its resolve in the gulf in 1987-88 improved its standing with allies, not only in the Middle East but also around the world.

Interesting. Of course, as the mutual funds all say, past returns do not guarantee future results. Japan emerged from WW II much more engaged with the West. We don't know where Iraq will ultimately land.

MS DOT head: Intermodal "cancerous"

Kevin Jones: Tranportation planners get a huge dose of major issues facing trucking industry (article not online) The Trucker, Vol 19, No. 8 April 15-30, 2006

Among other statistics indicating the critical importance of trucking, [ATA Chairman Pat] Quinn emphasized the primary role truckers play in hauling the nation's freight — noting that other transportation modes don't even come close. Indeed with more than 80 percent of America's communities served exclusively by "taken for granted" trucks, no other mode has even the potential any time soon to provide solutions to the nation's growing freight issues.

And while intermodal rail is forecast to nearly double over the next 10 years, Quinn said that the intermodal rail share of domestic tonnage will still only be 2 percent.

And one transportation official anticipated just such matters.

Speaking in the conference's opening session, Mississippi Department of Transportation Executive Director Larry L. "Butch" Brown referred to intermodal solutions as "cancerous".

Brown, who also serves on the American Association of Highway and Transportation Officials (AASHTO) board of directors and chairs the association's committee on ports and waterways, explained that discussions of river transport inevitably turned to railroads and to air freight in the Mid-South region. But the bottom line, he explained, is that what may be talked about as a solution to highway congestion — and a competitor for transportation funds — has just the opposite effect.

"The whole intermodal hub is driving an even bigger issue that's even more frightening," Brown said. "As big as it is and as fast as growing [sic], and as cancerous as it may be, intermodalism ... is making a bigger tumor and it's called highway infrastructure and we've got to deal with it."

Speaking afterward, Brown told The Trucker that his choice of words may have been inappropriate, but the idea behind it is sound: "Every time we do something [with intermodal planning], it works... but all it does is cause more movement. Instead of taking traffic off of the highways and putting it somewhere else, all we're doing is building a bigger need for the highways. Who's the largest user of rail service? The trucking industry."

It sounds like he may be a bit frustrated about the failure of America to use our waterways to full effect (which is reasonable). The problem is short a massive short line rebuilding program, rail (and waterway transport for that matter) do not have a good way to get cargo too and from small to medium shippers apart from trucks. He does have a point, though, intermodal does little where congestion is the worst—major urban centers. You still have a truck traveling on local roads to make a delivery, and perversely Sometimes chassis and container balancing issues can mean a truck has to travel to one urban railyard, then drop an empty container chassis, then bobtail across town to a second railyard and pick up the actual load which then goes on crowded urban streets to its destination, followed by a trip back to the railyard to return the empty container (and every time the truck enters and exits the railyard it is usually going to be idling for 10 minutes while it waits in line and then is inspected for damage).

Time to sell the XBox

8 year old steals teacher's minivan

(AP) MODESTO An 8-year-old boy swiped his teacher's car keys and took her minivan for a joyride, cruising safely home and into the record books as the city's youngest auto thief, police said.
......
It's no wonder that the boy's favorite video game is "Grand Theft Auto", says the boy's mom.

Profiles in Courage

To recover from the hit the President took from his base after advocating an amnesty for illegal immigrant, the Administration shows it's serious about immigration.... by taking on a German Company, who was suitably indifferent to the whole affair.

Paging Allen Drury

CNN:Protester disrupts Hu's arrival ceremony

In a surprise outburst that cast a diplomatic shadow, a screaming protester confronted President Bush and Chinese President Hu Jintao and interrupted the welcoming ceremony on the White House lawn Thursday. Bush later apologized to the Chinese leader.

"President Bush, stop him from killing," the woman shouted, to the surprise of hundreds of guests spread across the lawn on a sunny, warm day. "President Bush, stop him from persecuting the Falun Gong" -- a banned religious movement in China.

Standing beside Bush, Hu had just begun his opening remarks when the woman started yelling in Chinese and English. Bush leaned over and whispered to Hu, "You're OK," indicating the Chinese leader should proceed.

Hu, who had paused briefly, resumed speaking even though the woman kept screaming for several minutes before security officers forcibly removed her.

.....

Outside the White House gates, hundreds of banner-waving protesters loudly demonstrated against Hu's visit. The clamor could be heard faintly during an elaborate lunch Bush gave in Hu's honor.

Chinese leaders place high importance on protocol and symbolism, and Bush moved promptly to deal with the protest on the lawn. Once they reached the Oval Office, Bush apologized to his guest.

"He just said, 'This was unfortunate' and 'I'm sorry it happened,'" said Dennis Wilder, acting senior director for Asian affairs on the National Security Council staff.
.....
China permits about three dozen foreign television channels to be distributed in China, mostly entertainment channels, but also CNN and the BBC among others. Their signals, however, must first pass through a state-owned monitoring center, allowing the government to black out news stories it dislikes -- and it routinely does so.

The Secret Service identified the protester as Wang Wenyi, 47. Secret Service spokesman Jim Mackin said she had been charged with disorderly conduct and that a charge of intimidating or disrupting foreign officials also was being considered.
......
"It's hugely embarrassing," said Derek Mitchell, a former Asia adviser at the Pentagon and now an analyst at the Center for Strategic and International Studies.

China "must know that this Bush administration is good at controlling crowds for themselves, and the fact that they couldn't control this is going to play to their worst fears and suspicions about the United States, into mistrust about American intentions toward China."

Just maybe it might be good for Mr Hu to have to listen to his people, and perhaps our President ought to be sticking up for religious and political freedom in China. Oh wait, I forgot we only talk about democracy in Muslim countries. Then there's the Asia expert who thinks its a black mark that we don't run a thugocracy here. To think Drury cast the dovish Democrat as the sellout to totalitarianism.

Great quote of the Day

Christianity TodayNigerian Archbishop Demands Justice

They're simply bitter, they're simply angry. They're simply fed up with it [Muslim violence]. And they say to themselves that maybe if we fight back, the [Muslims] will know they don't have the right to take life at will. So it isn't that their Christian religion is telling them to go out and fight. You forget, in the West, the Crusades were a response to 400 years of Islamic aggression in Europe. Don't forget that. Don't you ever forget that. They didn't just happen for the fun of it.emphasis added

Of course the victims so far have by and large have only been Christians so no one in the Western media cares. If Muslims start to die it will of course be newsworthy. The rest of the interview is great stuff as well. Bishop Akinola is trying to be a voice of reason in an unreasonable place.

Reading Comprehension, or not

Capital & Crisis Ad

What does this oil-conserving company produce? Tires.I can feel you scratching your head. But remember, I warned you that the stories behind my investments aren't always ultra-sexy. However, these tires are extremely unique.

You see, it takes 22 gallons of oil to produce a standard tire. Yet this technologically advanced tire uses only seven. The result is a tire that costs 30-50% less than other competitive brands.

For most trucking fleets, tires represent the third largest item in their operating budgets, right after labor and fuel costs.

And since this specially engineered tire is of equal quality to a "regular" tire, lasts just as long, is better for the environment and cuts tire costs in half... purchasing this tire just makes sense.

Right now, the transportation industry is facing an economic crisis. Airlines, trucking fleets, bus companies, taxicab businesses and the entire automotive industry are scrambling to cut costs due to rising gas prices in an effort to stay competitive.

A breakthrough like this could help rejuvenate the ailing road transportation sector. It's not like America yet has the infrastructure to transition all that much cargo from mass truck transport to freight trains or barge transport. So this is the perfect solution for those necessary road transport companies that get squeezed by massive gas prices.

Now this guy bloviates for quite a bit about how wonderfully clever he is and how this stunning find is wonderful for our energy dependency. He's trying to get folks to sign up for his wonderful newsletter so they can learn the name of this company that can make tires with so much less oil. There's only one problem, what he is describing is retreading. (don't tell him I told you, but the longest running name in retreads is Bandag). Which, don't get me wrong retreading is a wonderful thing. But it is not the same as making new tires. The reason it takes so much less oil is only the tread is being remade around an existing casing (the sidewalls and belts). Truck tires have a stronger casing than car tires and properly maintained can last through several retreads. One could just as well say Japser Engines has found a revolutionary new way to make new cars for 90% less money (by replacing the engine in an existing car). My suspicion is this guy read and half understood some promotional literature (note the similarities between his piece and retreaders' promo piece) then proceeded to tell a bunch of folks that he can found a company that can spin straw into gold. And it just ain't so. That's the problem with today's management culture. The owners (stockholders) and their advisors (investment brokers and "stock pickers") usually don't know diddly squat about the company they are charged with. If you aren't familiar with the business it's easy to misinterpret what the company is telling you. That's part of why so many corporations have been allowed to travel on unsustainable paths for so long. The owners don't know enough about the business that they are in.

California is governed by morons and jerks

Today's trucking:Sleeper trucks now banned from idling in California dated 10/26/05

Heavy-duty trucks with sleepers are now prohibited from idling for more than 5 minutes in the Golden State.
The California Air Resources Board (CARB) has passed a regulation adding diesel trucks with sleeper cabs to the current prohibition on diesel engines. The regulation applies to current and future trucks, and will go into effect in 2008.

The rule is a follow-up to earlier regulations that limit idling but excluded diesel trucks with sleeper berths, which frequently depend on idling for cabin climate control and to run appliances.

The first part of the rule regulates new 2008 and subsequent model year heavy-duty diesel engines, requiring them to be equipped with a non-programmable engine shutdown system that automatically shuts down the engine after five minutes of continuous idling.

The second component regulates in-use sleeper berth-equipped trucks, including those registered out-of-state, requiring operators to shut off their engines before the five minute idling time is reached. The rule provides for the use of alternative technologies to provide power for cab comfort, such as auxiliary generators, and on-board accessories that would otherwise have required continuous idling of the vehicle’s main engine.

.....

About one quarter of trucks operating in California are registered out-of-state, with 90 percent of those vehicles equipped with sleeper cabs.

Of course california is talking about banning the use of APUs (i.e. the "auxiliary generators") mentioned above in 2007. So most truckers will have no legal climate control method while they sleep. That'll be for in the summer. So we'll have lots of extra tired truckers cruising the roads. I wonder how many hours of idling it takes to equal the pollution from a flaming wreck?

Of course they have now made the lucky folks who purchase trucks in their state a bit poorer. Since these controls will be non-programmable the vehicle will be less attractive to buyers out of state, so resale value will be affected. California has afflicted to auto buyers with extra cost emissions equipment for some time now. The difference is most heavy trucks do not stay in one state. Hey I wonder if more interstate operations will just buy their trucks out of state (at $90-120K a pop). That'll help the budget and the economy....of the surrounding states.

I still remember the one and only time I have been to California they had all the traffic on I-40 coming from Arizona stopping at "customs booths" before it entered the state. They really think they are their own country. Maybe if Congress sells America out again on immigration they will be.....(hey, there's a silver lining to every dark cloud)

Immigration Follies

Vox Baby: Should They Stay or Should They Go?

I start from the basic premise that a nation needs to define its borders and establish the rules for who is a citizen and who is not. Once those borders and rules are set, some people can be identified as being in the country illegally. In order to discourage illegal immigration, the nation's laws must promise severe punishment for those who are so identified. But here's the rub. Once an illegal immigrant has become an otherwise law-abiding resident, the nation should provide as much support to that person as possible. And once the illegal immigrant has a child in this country, all bets are off. Say what you want about the woman in the photo, the kid poking her in the eye is innocent in all of this and we do such children no favors by deporting or jailing their parents.

I am convinced from having worked on this briefly toward the end of my time at the CEA and from the President's remarks that the administration has its heart in the right place on this and is trying to make some progress on a very challenging issue. There are two parts of the President's rhetoric that I continue to dislike. The first is embodied in this statement from the radio address:

Finally, comprehensive immigration reform requires a temporary worker program that will relieve pressure on our borders. This program would create a legal way to match willing foreign workers with willing American employers to fill jobs that Americans will not do. [Emphasis added.]

That last phrase is a decidedly non-economic statement. Americans will not do these jobs at the prevailing wages. The appropriate response is to let the wages rise, so that the market clears without resorting to workers from abroad. That means that more Americans will do them at the higher wage and that fewer employers will demand the services. That's the way we deal with other markets--I see no reason why we should systematically undermine the wages of low-skilled workers in urban and border areas by refusing to enforce immigration laws. So I disagree with the assertion that reform should involve a guest worker program specifically to allow such jobs to be filled in some exceptional way.

Bingo! I thought in a "Free Market" system if there is an insufficient supply of a needed commodity (in this case labor for nasty jobs) that prices (i.e. wages) rise until demand and supply meet. Of course most of the "Small Government" types aren't against government at all when they can pull the levers to fatten their wallets. Brings to mind another post by my favorite new blog discovery: Dyspeptic Mutterings

Sure, the leadership talks a lot about "family values," but when it comes down to crunch time, the business wing crushes the "social conservatives." Period.

There was an anecdote in a recent Christianity Today where one of the evangelicals responsible for forming the global warming initiative discussed the icy reception the initiative received from the leadership of the GOP. A questioner asked if it was just another example of where there is a conflict between the corporate wing and the SoCons, the business interests usually win.

The evangelical leader paused, then said: "It is not the case that where there's a conflict, the business interests 'usually' win.

They always win."

Of course the Wall Street Republicans are trying to paint immigration enforcement as an electoral loser. William Kristol in the Weekly Standard writes

THE HOUSE CAUCUS TO RETURN THE REPUBLICAN PARTY TO MINORITY STATUS--also known as the House Immigration Reform Caucus--held a press conference Thursday. The GOP solons were upset. The Senate Judiciary Committee had not followed the lead of the House in adopting an "enforcement only" immigration bill.
.....
The American people are worried about immigration. In a Pew Survey released last week, 52 percent of Americans saw immigration as a burden, while 41 percent said it strengthened the country; 53 percent support sending illegals home, while 40 percent endorsed a path to citizenship.

Interestingly enough the piece was titled "Y is for Yahoo: Turning the GOP into an anti-immigration party could dash Republican hopes of becoming a long-term governing party." Takes some real chutzpah to point out a majority of the public opposes your position and the declare your position the key to maintaining majority status. May I humbly suggest a more accurate title "M is for Moron: my recipe for eliminating the working class from the Republican party ranks" Hey maybe he can get a job with the DLC.

Apparently we have 10 million illegal aliens in the US now. Our estimable leaders having failed to secure the borders now propose to declare defeat and and issue the amnesty that dares not speak its name to these lawbreakers. The logic is we can't deport them all. Well, hell, we've spent four years playing "Where's Osama?" So are we going to declare that one too hard too? As long as we keep giving out amnesties every few years "one last time" folks are going to keep crossing the border and playing Amnesty lotto (heck of a lot better odds than the Powerball tickets we gringos buy).

One last bit of Joy. A Reuters story quoting the President of Mexico on how he deals with his Southern border.

He said Mexico was doing its part to crack down on human smugglers along the U.S.-Mexican border and trying to halt the flow of Central American migrants coming across Mexico's southern border.

"With all due respect to the dignity of these people, respecting their human rights, they are stopped, they remain on temporary basis in the stations. We offer them services with dignity. And then we send them back to their communities of origin," Fox said.

I support following Mexico's leadership on this issue!

Happy thought for April

Written Testimony before a hearing of the Permanent Subcommittee on Investigations Committee on Homeland Security and Governmental Affairs United States Senate on “Neutralizing the Nuclear and Radiological Threat: Securing the Global Supply Chain” By Stephen E. Flynn, Ph.D. Commander, U.S. Coast Guard (ret.)
Jeane J. Kirkpatrick Senior Fellow in National Security Studies at the Council on Foreign Relations

Washington, D.C.

Since the container security initiatives that have been implemented by the Coast Guard and Customs and Border Protection Agency after 9/11 are not posing a meaningful barrier to determined terrorists, presumably one could look to the radiation sensors being deployed by the U.S. Department of Energy to provide a meaningful deterrent. Alas, the technology currently being deployed around the world as a part of the Second Line of Defense and Mageport programs is not up to the task of detecting a nuclear weapon, a lightly shielded “dirty bomb,” or highly enriched uranium. This is true not simply because there are problems at many foreign jurisdictions in keeping the detection equipment properly calibrated and in working condition as will be outlined in Mr. Aliose’s testimony. But there is a more basic problem which is that nuclear weapons give off very little radioactivity since they are extremely well-shielded so that they can be readily handled. In the case of a “dirty bomb”—as in the scenario I outlined at the start of my testimony—a terrorist who obtained or manufactured a dirty bomb is likely to take the necessary precaution of placing it in a container lined with lead. The result will be that even a properly calibrated radiation sensor is unlikely to be able to detect the very low levels of radioactivity to register an alarm. Finally, highly enriched uranium, which is used in the construction of a nuclear weapon, has such a long half-life that it emits too little radiation to be readily detected as well.

And of course if they used a chemical weapon or even a conventional explosive device these devices would be of no use whatsoever. Detonate a device or two on I-90/94 in Chicago in August and you could still shut down trade. Many containers are transloaded from the Western to the Eastern Rail lines by truck. Containers start blowing up or spewing toxic smoke do you think the local authorities would allow uninspected containers out of the railyards? Of course a nuclear device would cause national paralysis because of the psychological factors and even serious damage (even a device within terrorist capabilities could disable a Port or a Railyard, and we don't have that much spare capacity).

Another Day at the ice Capades

Well, the first day of Spring brought.....a snowstorm. Gotta love Indiana. As I drove across Indiana and into Ohio I saw lots of folks in the ditch or median. I even got a nice little scare when a U-Haul smacked the guardrail on the other side and then came across the median (fortunately he got it stopped just before he went English on me). That got me to thinking, my company just started using simulators to train drivers how to deal with skids, blowouts and such (stuff that isn't safe or economical to practice in real life), wouldn't it make sense to include such training in drivers ed classes? Either set up a central lab for the state and each school could take a one day field trip or use mobile labs and visit each school in the state. Of course while they're at it they should slip in a module about how to drive around trucks, but that's another story.

An act of war?

ABC News: Iraq weapons: made in Iran?

March 6, 2006 — U.S. military and intelligence officials tell ABC News that they have caught shipments of deadly new bombs at the Iran-Iraq border.

They are a very nasty piece of business, capable of penetrating U.S. troops' strongest armor.

What the United States says links them to Iran are tell-tale manufacturing signatures — certain types of machine-shop welds and material indicating they are built by the same bomb factory.

"The signature is the same because they are exactly the same in production," says explosives expert Kevin Barry. "So it's the same make and model."

U.S. officials say roadside bomb attacks against American forces in Iraq have become much more deadly as more and more of the Iran-designed and Iran-produced bombs have been smuggled in from the country since last October.

So what are we going to do about it? Iran seems to be counting on its ability to incite an uprising in the Shiite south and its ability to shut down a massive portion of the world's oil flows to deter us from responding to this and to their rapid nuclear buildup. At some point in the not too distant future we are going to have to fish or cut bait. a) Either bail out of Iraq and let a nuclear armed Iran set up a Islamofascist thugocracy in Iraq, b) bail out of Iraq and then bomb the Iranians into the stone age and then have two countries in disarray (and not pumping oil) for the foreseeable future [which would sure make our good pals Hugo Chavez and the House of Saud happy]), or c) perhaps the worst of the alternatives try to hold Iraq and invade Iran (while praying that China and North Korea behave while we are thoroughly tied down for a decade) which may have an end result not far removed from a or b.

(h/t Patterico

Is the U.S. Heavy Truck market going the way of Europe?

MergerTalk: US truck engine makers near end of road?

CHICAGO (Reuters) - Caterpillar Inc. (CAT.N: Quote, Profile, Research) and Cummins Inc. (CMI.N: Quote, Profile, Research), the two big U.S. diesel engine manufacturers, are at a crossroads, bankers say.

The dilemma: To keep their heavy-duty truck engine operations rolling, will they need to align themselves more closely with a single domestic truck maker?

In Europe, the top manufacturers of heavy-duty trucks -- Sweden's Volvo Group, and Germany's DaimlerChrysler and MAN AG -- are vertically integrated, producing both the chassis and engine.

But in North America the industry is divided.

The European players, Volvo and DaimlerChrysler's Freightliner unit, have tried in recent years to impose their vertical template on the marketplace, encouraging customers accustomed to being able to order their trucks with outsiders' engines in them to go with in-house drivetrains instead.

But the two other big manufacturers, Bellevue, Washington-based Paccar Inc. (PCAR.O: Quote, Profile, Research) and Warrenville, Illinois-based Navistar (NAV.N: Quote, Profile, Research) -- continue to outsource their so-called Class 8 heavy-duty engines, primarily to Peoria, Illinois-based Caterpillar and Columbus, Indiana-based Cummins.

But a big change -- the kind that drives deal-making -- is afoot. The wheels were set in motion in late 2004, when Navistar, Cummins' key customer, announced plans to develop a new big-bore engine with MAN.

When Navistar announced the deal, says one banker, "it sent shivers through the Cummins organization."

PACCAR makes its own engines for the European market (it owns DAF, Leyland, and Foden in Europe as well as Kenworth and Peterbilt here in the U.S.), so they have a potential Euro source as well. Cummins has more to worry about because Caterpillar engines are seen as a premium product, so drivers and owners would probably change truck brands to have a CAT motor. So any maker that chose to drop CAT would have some lost sales and perhaps many lost sales for Peterbilt, which has a "Premium truck" image. Cummins motors are more fuel efficient but don't have as devoted of a following. Right now they are the sensible fuel economy and cost choice in an IH, Kenworth, or Pete; and an alternative to the expensive to maintain Volvo motor in a Volvo. Already the market is much more fenced off than the 60s to the 90s where at most manufacturers buyers could choose Cat, Cummins or Detroit power. Detroit diesel in a typical bit of short term thinking was sold off by GM right after developing the Series 60 engine, the best fleet motor on the market, to Penske. A few years later Penske sold Detroit to DaimlerChrysler and all of the manufacturers outside the DC portfolio (Freightliner, Western Star and Sterling [formerly Ford's heavy truck unit]) dropped Detroit engines from their options list.

Until the Euro emissions standards catch up with the US 2010 standard though I don't see PACCAR moving to bring their euro product here. IF they did, it would probably slot in as the standard motor in place of Cummins with Cat motors remaining the "step up" option. Navistar seems to be struggling right now so it is hard to tell how their joint venture will shake out. Americans have traditionally resisted European diesels because of high parts costs and unfamiliarity (DC also offers Mercedes diesels in their heavy truck products but they haven't found a large following),

What a nightmare

Last weekend went on the annual shopping spree, I had planned to buy a couple of Mac minis (one for me and one for the wifey) and make the Sawtooth the kids computer and sending the Radius system 100 (which is very ready) to retirement. Get to the store, see a sonnet 1.2 Ghz G4 upgrade and a sweet Radeon, decide to upgrade the G4 and buy one mini for the wifey. The installation was mostly painless (though I don't know how on earth Sonnet thinks that a "medium" screwdriver will work, needed a pretty fine one to get to the screws in the heat sink). Start the machine up, lots of zoom zoom. Big Smile. Insert SimCity 4, start playing, go about half an hour and kernel panic, bad word, bad word, bad word. Restart and instant kernel panic. Let it cool off then double check the installation. Download the latest ROM for the vid card and flash it, download the latest drivers, check Sonnet's site, already have the latest software. Since it's mainly flaking out in 3D games (takes about an hour in normal operation, 20-30 minutes in Simcity 4, 2-3 minutes in 4x4 evo 2) pull the Radeon 9800 and reinstall the Rage 128 :-( . Still no go, Use a spare partition and do a clean install of the OS. give it another try. Get a black screen lock up. Pull the Sonnet and am back to OS X's no stability (of course I'm not playing many 3D games now). So I'm taking the Sonnet and the Radeon (nothing I need a 9800 for is going to work with a 400 Mhz G4) back monday and going back to plan "a" and buying another mini.

A coming storm for trucking?

Braun Consulting:FedEx ground vs. UPS: Two Worldviews

Legally, independent contractors can't be directly supervised, supplied with workspace or tools, or otherwise treated like employees. FedEx Ground has successfully defended its contractor system from several legal challenges, but in July a California judge ruled that certain contract workers should be treated as employees.

Filed as a state wage and hour violation case by three contract drivers in California, the suit was expanded to a state class-action suit.

In the California case L.A. County Superior Court Judge Howard J. Schwab issued a 23-page ruling on July 26th, 2004. He ruled that those contractors with multiple routes were legitimate contractors who operate more like businesses than employees. But he decided that single-route contractors should be classified as employees.

The judge termed a single-route contract as a "Single Work Area".

He noted that the contractors have only one client, FedEx Ground. They must drive trucks with company logos, wear uniforms with company logos, and report daily to company distribution hubs. They attend regular briefings on safety and company issues and their contracts can be terminated for any number of infractions. This means that in effect they can be fired for failing to follow company policies.

Some of the more interesting aspects of the judges ruling follow:

"A close reading of the Operating Agreement, which all SWAs (Single Work Area, or Single-route contractors) must sign in order to be able to work for FedEx Ground, is comprised primarily of platitudes and guidelines."

"For all practical purposes, by the nature of their work, the SWAs are engaged in the exclusive and full-time pickup and delivery service for FedEx Ground and are identified as such. FedEx Ground also provides business cards for the SWAs with its logo."

"Of importance to the court is the clear evidence that SWAs are totally integrated into the FedEx Ground operation...The SWAs wear required uniforms and drive specifically mandated FedEx Ground logo-laden trucks. The SWAs are long term in years of service..."

"Most important of all, the court finds that the work of the SWAs is essential for FedEx Ground's core operation, the pickup and delivery of packages. If lightning were to strike so that there were to be no FedEx Ground, there would in fact be nothing left for the SWAs to do and they suddenly would be bereft of business."

"The court finds that in entering the relationship, FedEx Ground purposely created controls of an employment nature, hoping that in spite of those strictures, the status would still be seen and considered to be that of an independent contractor."

FedEx "respectfully disagreed" with the ruling. If the ruling holds up they will either have to convert single-route contractors into California employees or change the relationship to comply with the less restrictive control associated with an independent contractor.

This is most directly applicable to independent contractors in the courier industry, but there have been efforts to have port truck drivers considered employees. In OTR trucking there are three basic categories of driver. A company driver operates a company supplied truck pulling loads as directed by the company. He is not responsible for the operations costs of the truck. Some company drivers may have leeway as to what routes to run or even to choose which of the company's loads they will haul but the company has the prerogative to totally control the truck and driver. An independent contractor provides a tractor but operates exclusively for one employer. They will usually have a company truck number and the employer name and logo on their truck. By law, liability insurance is provided by the carrier (at leas Generally they are paid a certain per mile or percentage rate "to the truck" out of which they pay operating expenses and whatever is left over is their earnings. They have more control usually over the operation of the truck, but can still be fairly tightly supervised by the company. In theory though, the independent contractor can choose to quit his current company, take his tractor, and go to work for a different company so he has some leverage if the company makes onerous demands . An owner operator owns their own unit, generally both the tractor and trailer. They contract directly with shippers to haul freight, usually for a fixed dollar amount per load. They may haul loads for other motor carriers on an occasional basis. They run their own independent business, billing customers and providing their own operating authority and insurance.
The lines between the different categories get blurred sometimes. An individual may own multiple trucks which are leased to a carrier, in effect an independent contractor who is also an employer. Lease purchase plans may result in an independent contractor with very little freedom.
Many carriers use independent contractors to cut costs or to fill driving slots they cannot fill with company drivers. Independent contractors often operate trucks that are more expensive and less fuel efficient than fleet trucks (though much more attractive and comfortable).
So if independent contractors must be recategorized as employees then carriers will have to either accept the new status quo, only deal with owner operators, or only deal with company drivers. If the carriers have to pay wages plus operating costs they would be more inclined to restrict what types of tractors independent contractors may purchase as well as operational details such as how fast the truck is governed at, how many out of route miles, and out of route miles the truck runs.

Past returns do not guarantee future results

Stephen Roach:The Symbiosis Trap

The broad consensus of financial market participants has come to the conclusion that there is a new symbiosis between America’s record-setting external deficit and those willing to fund it. China is typically singled out as the most willing participant in the “symbiosis trade” — the arrangement whereby the US buys goods made in China in exchange for China’s willingness to buy bonds printed in Washington. On the surface, this seems like a terrific deal for both — providing American consumers with the interest rate subsidy needed to sustain wealth- and debt-dependent spending and helping China limit an appreciation in its currency that might otherwise hamper its export prowess. Because this implicit contract has enabled China to keep its currency tightly aligned with the US dollar, many have also referred to the new symbiosis as a “Bretton Woods II” regime — the modern-day sequel to the dollar-based international financial architecture that was adopted in the aftermath of World War II. Advocates of this view conclude that since it is in both parties’ best interests to perpetuate the symbiosis, there is no reason why it should change. With net foreign purchases of long-term US securities averaging $114 billion in September and October 2005, the latest facts are certainly not getting in the way of that logic.

I worry, however, that the sustainability of the symbiosis trade is predicated on a very dangerous ex post rationalization of global imbalances. As was the case in the midst of recent bubbles in equities, bonds, credit, and property, there are important kernels of truth to the notion of a new international symbiosis. The increased trade and capital flows that stem from the cross-border connectivity of globalization create a growing sense of co-dependence in the global economy. The US dollar’s role as a reserve currency adds confidence to the notion of an expanded dollar bloc. But at the end of the day, I do not believe that this arrangement is either desirable or sustainable from the perspective of either of the two main protagonists in the new symbiosis — China or the United States.
.......
The risks are equally disturbing from America’s point of view. To the extent that foreign purchases of dollar-denominated assets represent the functional equivalent of a subsidy to US interest rates, asset markets enjoy artificial valuation support. The result is a surge in housing values that many Americans now perceive to be a new and permanent source of saving. This, in turn, has had a profound impact in reshaping saving and spending strategies of US consumers. In essence, the income-based consumption models of yesteryear have been replaced by asset-driven frameworks. The repercussions of this transformation are profound: The income-based personal saving rate has plunged deeper into negative territory than at any point since 1933. At the same time, US consumers can only create newfound purchasing power by extracting equity from an ever-expanding housing stock. This is where debt enters the equation — in effect, the cost of equity extraction. The overall household sector debt ratio has been pushed up by 20 percentage points of GDP over the past five years — equal to the gain in the preceding 20 years; moreover, reflecting this overhang in the outstanding stock of indebtedness, US household sector debt-service burdens have risen to record highs — even in the context of an unusually low interest rate climate. The result is unprecedented consumer vulnerability on both the saving and debt fronts.

“So what!” retorts the symbiosis crowd. After all, these are precisely the excesses — both for China and the US — that we in the rebalancing crowd have been bemoaning for years. Fair point. Moreover, a year ago, when there were widespread concerns over global imbalances, the dollar rose instead of fell — and those concerns lost credibility. As long as the world is willing to finance America’s saving shortfall, goes the argument, there is no reason to worry about sustainability. This, in my view, is the essence of the “symbiosis trap.” The consensus has been lulled into a false sense of security — believing that imbalances will remain a non-issue for the global economy and world financial markets.
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The case for global rebalancing was dealt a tough blow in 2005. The dollar’s surprising appreciation led many to believe that financial markets are perfectly capable of coping with massive external imbalances. In my view, that coping mechanism has led to a false sense of complacency that could well be tested in 2006. In particular, a further deterioration of global imbalances — more likely than not over the next year — could well have adverse consequences for already-extended US and Chinese economies. The result could be a sharp decline in the dollar and related upward pressures on US real interest rates — developments that would take generally complacent investors by surprise. I have long been wary of new theories that spring up to explain away old problems. That was the problem with the so-called new paradigm thinking of the late 1990s. And it could well be the ultimate peril of the symbiosis trap.

To rip off the Matrix it will last as long as it can. Folks are spent out, real wages have been flat (and for many families have been falling) interest rates have already started to creep up. If the worst happens the folks with adjustable rate mortgages will face skyrocketing payments as well as being upside down on the note due to falling home prices. Families already living "the American dream" on borrowed money will be in the fight of their life and the folks speculating with borrowed money will loose their shirts. The bankruptcy exit is barred, lenders will not be in the mood to lend over 100% of value to refi on a fixed rate, and there will be more sellers than buyers. The coasts will be hardest hit but everyone will feel the drag on the economy. Such a recession may not have an identifiable trigger like a stock market crash rather a slowly rising flood of bankruptcy and foreclosure until a tipping point is reached and it becomes page one news.

In other news oil is lighter than water

The Big Picture: Laughing at Laffer

[quoting from the New York Times Dan Altman]
"The author of the analysis, Ben Page, estimates how an across-the-board cut in income tax rates could generate higher levels of economic activity, potentially replacing lost tax revenue. The theory behind these feedback effects is well worn: putting money back into taxpayers' pockets will let them spend more and save more, raising demand for goods and services and helping companies to invest for the future.

Mr. Page assumes that government spending will continue as planned for a decade after the tax cuts. He also creates different possibilities based on various assumptions about people's foresight, the mobility of capital and the ways in which the federal government might make up for the lost revenue when the decade is up - either by cutting spending or by raising taxes again. Finally, he compares the budget office's figures to those of two private forecasting firms, Global Insight and Macroeconomic Advisers.
......
The recent analysis by Mr. Page at the Congressional Budget Office dismisses the idea that tax cuts may actually improve the government's fiscal situation. Even in his most generous scenario, only 28 percent of lost tax revenue is recouped over a 10-year period. The United States, it seems, is firmly planted on the left side of the Laffer Curve.

Note this is more than mere theory. Looking at the most recent tax cuts and their impact on revenues, we learn that recent experience corroborates this prediction:

"In the second quarter of 2001, just before the first of President Bush's tax cuts took effect, federal receipts from personal taxes accounted for 10.3 percent of the economy. By the end of the post-recession slump, receipts had dropped to 6.4 percent. But in the third quarter of 2005, with the economy booming, they were still under 7.5 percent - an enormous difference. In dollar terms, federal receipts from personal income taxes, at $802 billion in 2004, are still lower than they were in 1998 ($826 billion) and much lower than in 2001 ($994 billion)."

The bad news may be even worse. Once a shortfall begins, the government does what governments always do -- Borrow more:

"Shortfalls in revenue cause the government to borrow more, so money intended for other purposes must be paid as interest instead. Even in Mr. Page's most generous picture, the federal government would probably have to pay an extra $200 billion in interest over the decade covered by his analysis."

What is the exact nature of the trade off? Mr. Page estimates that gross national product gains about 1% in exchange for higher deficits.

In other words, Supply Side Tax Cuts "borrow" growth.

Of course the "starve the beast" folk would perhaps claim that the problem is that the theory is executed incorrectly since the assumption is that spending would remain constant for 10 years where in their perfect world spending would be cut in tandem with taxes. And in a "perfect" balanced budget world pols could choose to increase taxes and increase services, to hold the taxes and services steady, or to decrease both. Higher taxes make the folks that pay them unhappy with the pols and cutting spending makes the recipients or beneficiaries of said monies unhappy. So what's a pol to do? The folks who paid his way into office want less taxes and mo' money and the voters want the same. There's not enough to go around so the pol does the same thing the consumer has picked up in the last few years, he whips out the gold card and makes up the difference between his means and his wants.