My Blog

Year: 2011

  • Fermilab’s Tevatron Shutting Down

    The Tevatron at Fermi National Accelerator Laboratory will be shut down later this year after the Batavia-based lab failed to win additional funding from the Obama administration.

    Once the world’s largest atom smasher — technically, a proton-antiproton collider — the Tevatron was scheduled to cease operations this year with the recent startup of a much more powerful accelerator known as the Large Hadron Collider, which straddles the border of France and Switzerland.

    But with Tevatron running glitch-free and still producing useful research on the elementary building blocks of matter, Fermilab sought an additional $35 million a year to keep it going another three years, a proposal endorsed last year by a U.S. Department of Energy advisory panel on high-energy physics research.

    However, the Energy Department last week notified the University of Chicago, which runs the lab for DOE, that the additional funding would not be included in the soon-to-be-released White House budget request for the fiscal year starting Oct. 1.

    (Full story here.)

    This is very sad.   A long (LONG) time ago I took a series of Saturday classes out at Fermilab and learned about high energy physics and the Standard Model.  It was fascinating.

    This is a huge loss for the area, including Chicago.  Fermilab employs some of the smartest people on the planet.  People who were good to have in the neighborhood to work on things like solar power, new batteries for cars, LED lighting, improved windmill design, and the like.  Many of these people will now leave the area.  Dreadfully, many will head to Silicon Valley or Texas.

    It’s sad Obama, our home town hero, couldn’t find a mere $35 million in the entire federal budget to keep this place running for another three years.

    I say we fire half the aldermen thus saving more than enough to keep the Tevatron going.

  • $5/gal gas? Yes Says Former Shell Exec

    NOTE:  This story is a few weeks old.  12/28/2010

    Gasoline rationing and $5 pump prices are predicted by 2012 for consumers if U.S. politicians don’t get their act together, a former Shell executive said.  …

    John Hofmeister, a former president at Shell Oil, told the Platts news service that energy shortages and record-high gasoline prices were on the horizon because of high demand and ineffective governing.

    “The politically driven choices that are being made, which are non-choices, essentially frittering at the edges of renewable energy, stifling production in hydrocarbon energy — that’s a sure path for not enough energy for American consumers,” Hofmeister told the news service.

    He said 2012 might create “panic time” for U.S. lawmakers who are “suddenly” going to be pressed to rethink U.S. energy strategies.

    “When American consumers are short or prices are so high — $5 a gallon for gasoline, for example, by 2012 — that’s going to set a new tone,” he added.

    (Full story here.)

    I read this story back in December, thought about posting it, then it passed.  With the news yesterday that Chicago has the highest gas prices in the country, my memory clicked and I went and found this gem.

    Talk about killing the economy.  Since the 1980’s we’ve all been on the cheap energy economy.  Looks like that’s about to change.

    Poor leadership across the board: federal, state, local governments have done nothing to assist the citizens at making sure that the we continued to get a good deal at the pump.

    If $5/gal gas come to pass, you can bet the bank on a double dip of the great recession that will last another 10 years.

  • O’Hare Bonds Downgraded

    The cost of debt is going up because of years of bad management.

    A major credit rating firm delivered a stern warning Monday regarding the mounting risks that Chicago is taking by going deeper into debt in an attempt to build more runways at O’Hare International Airport without securing financial support from the airlines.

    Moody’s Investors Service downgraded to a “negative” outlook from “stable” some of the revenue bonds that the Chicago Department of Aviation has issued to help pay for the $15 billion O’Hare Modernization Program and related projects.

    (Full story here.)

    The city needs to borrow another $1 billion in order to keep expansion alive.  Because of the downgrade, the interest rate is going up.  Interest on a billion adds up fast.

    Less money for necessary services; more money to debt service.

  • Convicted But Still on the Payroll

    Chicago, the city that works, is also the city that keeps on paying city employees long after they’re convicted of corruption.Nine former city employees were paid a total of $383,205 after they pleaded guilty or were found guilty in corruption cases, records show.

    (Full story here.)

    Simply unbelievable.

    Another clear example of how one no is looking out the taxpayer.  When people have had enough they will toss all the bums out of the city counsel and demand more from their elected representatives.

  • Gas Tax at Work

    CAMARILLO, Calif. (AP) — The twice-monthly Lundberg Survey has found the price of regular gasoline has risen about nine cents a gallon over three weeks to $3.08.  …

    Lundberg says the highest gas price in the country was recorded in Chicago at $3.35 a gallon. The low, $2.73, was in Salt Lake City, Utah.The survey was completed Friday.

    (Full story here.)

    Highest gas prices in the nation.  Ridiculous.

    Since everything we buy: food, clothes, cars, TV’s, etc., all travel by truck at some point in time, high gas prices cause inflation.  So not only do you personally pay more for the gas you use, but you pay more for everything that you use.

    This is a real problem that we have to get under control if we are to not only survive but thrive.

  • Parking Meter Analysis

    So Monday is the Chicago Tribune Editorial Board review for the Second Ward candidates and as I was having breakfast this morning I got to thinking.  How bad really was the parking meter deal?  So I started poking around to find out.

    Ten minutes later I was shocked!!

    Based on this story here I estimated that initial annual revenue from the parking meters was $19.5 million.  Then, on this page here I figured that long term municipal bonds were around 5%.  Then I built a quick spreadsheet using OpenOffice’s Calc (I’m a big fan of open source software.)  But I had to stop because I needed one more piece of information; so I found this story here about rate increases.  A few clicks later I was reaching for the Advil.

    If one assumes a 7.5% annual increase in rates (2011 was around 20%) and a fixed 5% interest rate, then the present value of the parking meter revenues is:

    $3,775,457,416.73

    That’s right, $3.775 BILLION dollars.  How much did we get?

    $1,160,000,000.00

    That’s right, the Mayor and the City Counsel left potentially over $2 Billion on the table.

    What’s amazing is that this took me 10 minutes.  Why didn’t anyone in the City Counsel or the Mayor’s office — or the media for that matter — do this very simple analysis?  My guess is that they didn’t even think about it.  Politicians do NOT even understand the concept of time value of money.

    Just doubly insane that Bob Fioretti voted for this abomination.

    If you want to see my spreadsheet you can find it here.

  • State Dems Press Ahead on Tax Hikes

    Gov. Pat Quinn and top Democrats are pressing forward on a major income-tax increase and a $1-a-pack hike in cigarette taxes.

    The personal income tax rate would rise from 3 percent to 5.25 percent, Senate President John Cullerton said this evening. The amount tracks with what the Tribune reported today. After four years, it would fall to 3.75 percent, he said.

    The corporate tax rate on businesses would rise from 4.8 percent to 8.4 percent.

    (Full story here.)

    This will kill growth, jobs, and will hurt all of us in Chicago.  The recession is going to last longer in Illinois than elsewhere because of measures like this.

    Two weeks ago I wrote about how people are fleeing high tax states for low tax states.  Say what you will about Prof. Laffer, but his analysis of tax elasticity appears to be dead on.  The Laffer Curve is real and accurate.

    The problem is two fold: not only will businesses leave, but companies that were thinking of relocating to Illinois will chose someplace else instead.  The loss to the state as a result of this will be billions.

    Interestingly, Democrats seem to love to talk about how our friends in Europe govern.  Recently in the UK, the bi-partisan government agreed to both modest tax increases (not nearly double) and also extensive cuts in spending.  Seems that Dems on this side of the pond only want to tax and tax and tax and not cut a single nickel.

    If Chicago goes down the same path were doomed.

  • Media Drops Ball on Taste Proposal

    Chicago aldermen responded coolly Tuesday to a lone bidder’s proposal to charge Taste of Chicago patrons a $20 admission fee — and up to $65 for tickets to a music stage that draws the biggest-name talent to the lakefront festival.

    (Full story here.)

    This is the whole story; $20 admission & $65 concert tickets.  Completely missing is the length of the proposal, the up-front payment to the city, any other details of the deal, and financial records from previous years’ Tastes.  As such, the deal is impossible to evaluate.

    When the media can’t even get the simplest of details out to the public it’s no wonder that public expectations are so low.

    Someone should get the entire proposal and make it available with a nice 150 word executive summary.  That would be some fine journalism.

  • Truism

    Someone sent me this quote today as part of a longer email:

    It is incumbent on every generation to pay its own debts as it goes.
    A principle which if acted on would save one-half the wars of the world.
    —  Thomas Jefferson

    I can’t help but thinking that the debt we have created for our children will be the cause of their wars.

  • Gratuitous Spending at CPS

    An independent investigation into spending by Chicago Public Schools’ board presidents has uncovered more than $800,000 in questionable expenses in recent years, including thousands spent at lavish restaurants and hotels at a time when teachers and the district’s rank-and-file were being asked to cut expenses.

    (Full story here.)

    It’s worth the click to read this brief story at Chicago Breaking News.

    So someone tell me, how much more money should we be spending on CPS?