Preparation

…no-one is offering a solution to the approaching (oil supply) shortfall, it does not take a rocket scientist (grin) to realize that there is a significant ROI on its way and to plan accordingly. Which likely will mean that the price will go up faster than currently anticipated, and also higher.

It is likely that by fall demand for oil will exceed supply and very likely here in the Poconos many of us will feel some serious impact. A lot of people heat with oil and

We own two small houses. The house we live in has two fireplaces; one with a wood stove insert, the other has a propane burner. The main heat is electric, via base board units. For sub zero days and power outages we have a portable kerosene unit in the basement. Last winter, after an ice storm, we were without power for four days. Thanks to the non electric units we were able to keep the pipes from freezing. But, from speaking to linemen friends that work for a local power company, I know to expect more and longer outages. They are cut to barebones work forces and simply can’t keep up if bad weather hits large areas.

We recently purchased the small house next to us, mainly because it is on nine a half acres and we were afraid it would be developed. We rent the house next door to a young couple. She works locally. He commutes to east central New Jersey where drives heavy construction equipment. Because he commutes, because his job relies diesel fuel and new home construction and because their main source of heat is an oil burner, their financial security is immediately vulnerable to oil prices. Last winter they could barely afford the heating oil.

The best way I can think of to make things easier for our tenants next winter is to put in some back up heating systems. I plan to put in baseboard electric units and a wood burning fireplace insert. Last winter firewood sold here for around $100 a cord. I burned three.

These are temporary solutions, not environmentally friendly, and very likely I will have to look into putting coal heat in both houses, unless I find a better solution. For those in warmer areas it is probably hard to imagine how important heating oil is in the Northeast and how great the impact of higher prices is on working people living pay check to pay check.

Here's a good energy web site to check out: Energy Bulletin

States the Obvious

But it's nice to have someone on TV actually say what you know to be true.

CNN report on Buffett appearing on Lou Dobbs Tonight

….Buffett noted that the ballooning trade and budget deficits should be rectified before the President attempts to tackle Social Security reform. He also noted that he didn't understand why the President was spending so much time dealing with a problem so far down the road when the current budget deficit is four times the potential Social Security shortfall. ….

….Buffett would also increase taxes on the rich to pump cash into Social Security.

There is no reasonable explanation for Bush's attack on Social Security.

Good Move (?)

It means taking a healthy pay cut, but my dad has decided to stay at home and lock himself in the basement.

Caption from a P.C. Vey cartoon in the current New Yorker, page 62

Our Betters

If you ever read the creepy conservative columnists at the New York Times, you will like this. It helps explain why these guys seem so off key to us working people.

They write about mainstream America, and they write about mainstream America from the view of top-tier editorial newspaper columnists sitting in the very midst of the political powerbroker class, every one invited to the correct parties and appearing regularly on the same small set of television shows, and they tell us patiently that their view from this distant closed-circuit perch is much, much more illuminating than the view from our own cars and sidewalks and porches. Because we, living in that mainstream America, don't understand.

Of course, Tom's right about the second half of that, too. These incessant columns aren't directed at any of us, at all; they're directed at the other cocktail-party pundits opining on the exact same fuzzy images of what middle-class life must be like, an unending parlor game of theorizing and counter-theorizing about those odd little people that do not have columns in major newspapers or attend dinners with Colin Powell.

I read it first on Atrios, then followed the link to Kos and finally ended up here.

Kent State

35th anniversary of the Kent State shootings.

It Can't Happen Again. Can It?

Thumbscrews

$374 for 22 round trip bus rides from Stroudsburg, PA to New York City. $25 a month to park at the bus station.

from the AP via the NYT

According to the nonprofit College Board, families now pay an average of $11,350 a year for tuition, fees and room and board for in-state students at public, four-year colleges and universities; the costs for private colleges and universities average more than $27,500 a year.

$100 a barrel oil

I think the oil story is very under reported. It makes me think of the collapse of the Berlin Wall. It's there and suddenly it’s down. The accelerated rate of the disintegration of the Soviet Union and the Wall were not foreseen. (Nor for that matter was the rate of collapse of Saigon) Disasters seem to accelerate once they get traction and I'm afraid that's what we may be in for with energy.

$100 dollar a barrel oil will be hard to ignore, especially in the winter and especially for commuters grinding there way to New York from here in the Poconos.

Pennsylvania Republican Congressman Don Sherwood gives back rub. If Bill Clinton told this story.......

THE CONSTITUENTS of U.S. Rep. Don Sherwood deserve to know what’s going on.

On Saturday, the Times Leader reported that last fall, Washington D.C. police were called to Sherwood’s apartment in response to a 911 call from a woman who was visiting there. Cynthia Ore, 29, told the police Sherwood choked her.

Defenders of the representative say there’s much that diffuses this story. The incident happened seven months ago and only came to the attention of the media through one of Sherwood’s past opponents. The woman who called 911 backed off of her claims when police arrived and no charges were filed.

Sherwood says the accusations are false and that it’s a political smear.

But it’s not that simple. In the police report, Sherwood says he was giving the woman a back rub. Sherwood has been married for 33 years, according to his own congressional Web site.

Congressman Sherwood's home page

Pricey

Oil may hit $100 and more, this year, according to "Reading Between the Lines in Crawford, Texas" by Andrew Weissman.

If this ramp-up in production is not achieved for any reason (starting almost immediately) – either because the Saudi’s are not able to increase production by 1.1 million barrels per day on a sustained basis or because they choose not to do so or because the oil they can produce is not useable in the current world market – the EIA analysis shows quite clearly that all bets are off.
The world market is likely to be short by at least 125 to 150 million barrels of oil compared to the supply levels required to maintain world oil prices at barely tolerable levels.
As a result, EIA’s $ 55 per barrel price forecast effectively will be “out the window.”
Further, unless oil prices increase rapidly enough to reduce demand by more than 1 million barrels per day by the 4th quarter of this year, U.S. and worldwide commercial inventory levels are likely to begin falling at an alarming rate.
No one knows for sure how steep a price increase may be required to drive 125 to 150 million barrels of demand out of the market. But Goldman Sachs’ “Super-spike” price level of up to $ 105 per barrel, originally suggested as the high end of the range of the of the potential market clearing price in 2007, may not be out of the question for this year.

Social Security/Tax Cuts

From E.J.Dionne Jr. via Kos

Bush has refused to put his own tax cuts on the table as part of a Social Security fix. Repealing Bush's tax cuts for those earning more than $350,000 a year could cover all or most of the 75-year Social Security shortfall. Keeping part of the estate tax in place could cover a quarter to half of the shortfall. Some of the hole could be filled in by a modest surtax on dividends or capital gains.

But Bush is resolute about protecting the interests of the truly rich by making sure that any taxes on wealth are ruled out of the game from the beginning. The Social Security cuts he is proposing for the wealthy are a pittance compared with the benefits they get from his tax cuts. The president is keeping his eye on what really matters to him.

The real costs of progressive indexing as currently conceived would be paid by middle-income earners -- those with incomes in the range of $35,000 to $60,000 a year.

Poconos

I live in the Pennsylvania Poconos, about 8 miles from Rt. 80 and 80 miles from New York City. 20 years ago I purchased a small house on a dirt road in the woods. Now, the road is paved and across it a middle class “community” of modest, but for former New Yorkers accustomed to higher prices, very affordable homes, has risen. Low wages for construction workers help keep the prices low. Many of my neighbors work in New York and eastern New Jersey. There are few good paying jobs here in the Poconos. At five in the morning commuter cars speed down the road heading towards Rt 80. Even at that hour traffic on 80 is frequently backed up and for many I’m sure the anxiety about being late yet again causes unbearable tension.

Last week I read in the Pocono Record that 1500 new homes would be built near Shawnee Resort and this is only one of many such developments in progress.

Things will soon change.

Gas prices (and heating expenses) are certain to continue to rise. Friends tell me it takes roughly 2 and a half tanks of gas to commute for a week to New York or eastern New Jersey. New schools are being built in every district. This means increased property taxes. The cost of living here and commuting to work elsewhere will soon exceed the earning potential of many. Inevitably, homes will go into foreclosure, as many already are. On my short little road there are two homes that stand unoccupied and another has been for sale for more than a year.

Before you buy in Poconos or anywhere else for that matter, google “housing bubble” or root around in this site http://patrick.net/housing/crash.html for awhile.