Signs of the Times

From the Auto Blog:

As part of a substantial investment in the arts, General Motors has maintained an ongoing funding relationship with PBS filmmaker Ken Burns (right) for 22 years. As it has with several other high-profile endorsements of the creative and sporting communities, however, the struggling automaker is pulling the plug on its endorsement deal of the award-winning documentarian. While details of the ongoing arrangement haven't been made available, the Detroit News indicates that the automaker has "spent millions underwriting Burns' films," an arrangement that will end with his forthcoming six-part series, The National Parks: America's Best Idea" that airs this Fall.

The Ken Burns announcement is just the latest in a steady parade of extracurricular funding efforts that GM has been forced to cut, including sponsorship of major televised events (Super Bowl, Emmy Awards, Academy Awards), product endorsement deals (Tiger Woods) and corporate benefactor roles (Detroit Symphony Orchestra, Detroit Institute of Arts etc.).

I wonder how long until GM considers its substantial NASCAR funding a luxury it can't afford anymore?

Signs of the Times

Just finished another 475 mile 6 1/2 hour jaunt from Northern California and saw a couple more examples for this continuing series.

I've made this trip a lot in the last couple of years, and am always interested in the gas prices since I have to use a lot of it to go over 1,000 miles in a weekend. The pricing for regular unleaded is back to the levels it was around Thanksgiving when we made that trip a couple of times. The astonishing difference this trip was the price of diesel fuel.

For some time now diesel has been priced 15-20 cents above regular unleaded. It was that way all last year, from the high price point in the summer through the low point around Christmas. However, this time diesel was priced 15-20 cents LESS than regular unleaded. For instance, at our last fuel stop in Westley unleaded was $2.09 and diesel was $1.93. It's been a long time since I've seen that.

So, what's different between now and last November? It's pretty clear the crashing economy has resulted in a significantly lower demand for diesel fuel. There are fewer trucks on the road, and as evidenced by this previous story, fewer trains. Both are big users of diesel fuel.

I'm waiting for the lefties who blamed oil company executives for high prices to thank those executives for today's lower prices.

Anyone??

Second item - during the early hours I was listening to a radio station in Modesto talking about the problems the Central Valley is experiencing because of the Endangered Species Act and water supplies. They were interviewing an executive from a water agency who had been told they would not be getting any water from their major supplier because if they turned on the pumps to that area the Delta Smelt might be further endangered. This is a tiny fish, 5-7 centimeters long, and in order to save that fish entire towns downstream are being decimated.

The water exec was describing some of the local towns that are heavily reliant on this water for agriculture are now facing 40% unemployment rates as their fields dry up. Because the pumps weren't turned on the heavy February rains that hit the area simply ran off into the ocean rather than being directed to areas downstream.

They are begging Obama to declare and economic emergency, overrule the Act and allow water to begin flowing again. An area already hurting because of the economic downturn may be devastated beyond any hope of saving if Obama decides that tiny fish take precedence over people.

What do you want to bet the fish wins?

Signs of the Times

Another in the continuing series...

While eating breakfast in the hotel yesterday morning I was scanning the Petaluma Argus, the local town newspaper, and saw this item:

GreenWaste Recovery, the South Bay company selected after Petaluma’s prolonged search for a garbage hauler in 2005, says it is leaving town.

In a letter to the city last week, company president Richard Cristina sought permission to transfer the remainder of GreenWaste’s 10-year contract to Redwood Empire Disposal, City Manager John Brown said.

No timeline is given, but “They’re indicating they’d like us to consider this as soon as possible,” Brown said.

Reached by phone at his San Jose office Tuesday, Cristina cited the poor economy as a factor in the company’s decision, but said he couldn’t discuss specifics.

“Under the circumstances, it’s a smart business decision,” he said. “We’re in a very volatile market.”

The market for recyclable goods has plummeted along with the national economy, as demand for consumer products made for those goods has also fallen.

Recyclables have been backing up at the local recycling plant in Santa Rosa, the Press Democrat reported in November.

Keep in mind this area is one of the most green-wacky you're gonna find. Everything is about "going green".

However, just because you want to go green doesn't mean anyone else is willing to buy your castoffs and turn them into something else.

Speaking of going green, my wife attended a conference at UCI last week which was heavily advertising their "green" restrooms. She tried to use one of the automated toilets and the thing flushed three times before she could even sit down. In a state that's undergoing a significant drought, I'm not sure that's a "green" solution we can afford.

Signs of the Times

Another in the continuing series.

While driving north this morning we were listening to a variety of radio stations in the Central Valley until, of course, 9:06 when I tuned into KBFK in Sacramento for Rush's show. The content of the show aside, what was striking on that station and on KSFO in San Francisco (as we got closer to the Bay area) was the plethora of commercials for credit card counseling companies and bankruptcy lawyers. It was especially noticeable on KSFO.

These commercials ran every 2nd or 3rd ad, and one time I heard credit card counseling commercials for two different companies run back-to-back. We hear those ads periodically on the Los Angeles stations, but never in the quantity I'm hearing up here.

Things must be pretty tough in Northern California.

Signs of the Times

Another in the series of observations in this crashing economy.

Last night the Mrs. and I decided to go to a favorite restaurant for dinner - The Old Spaghetti Factory which is located in the former Union Pacific Depot at the Fullerton train station. The place is usually jammed full with long waits for tables (unless you call ahead as we did) and I wondered if the economy would affect their Saturday night business.

Nope.

The people who were arriving when we did were getting a 40+ minute wait. (We only waited about 10 minutes since I called ahead during the drive up there.)

There were lots of large groups as well as twos and fours. Once we sat down I thought about it a bit and realized why OSF is almost recession proof. The offer good quality food and lots of it in an interesting venue at an excellent price. Quality + Quantity + Pricing + Atmosphere = Money.

The two of us had the garlic cheese bread appetizer, spaghetti dinners which include salad, desserts and drinks, and the whole thing came to only $23. You can't beat that with a stick. The high end frou-frou restaurants - you know, the ones that give you two asparagus spears on a tiny piece of fish and charge you $50 - they're gonna suffer. Places like OSF will continue to do just fine.

The other thing that makes that location interesting is the proximity to the main railroad tracks between Los Angeles and points east and south. All of the Metrolink and Amtrak Pacific Surfliners stop there, while we were finishing up the Amtrak Southwest Chief pulled in on its way to Chicago, and massive freight trains on their way to or from the ports of Long Beach and Los Angeles pass through the station.

Shortly after the Chief pulled out we saw the lights of a freight train coming from the east. It was a double stack freighter and came through the station on the track closest to we were standing at probably 50 mph. Those things push a lot of wind not to mention the ground shaking as the four heavy locomotives blasted by. Being only 10 feet away really amplifies the experience. For a train buff, it was pretty cool.

We may have to go back there again pretty soon.

Today's Signs of the Times

I may turn this into a regular series. I did a "Signs of the Times" post over the weekend describing some of the empty stores and other signs of a weak economy around here. Here's an item from the Wall Street Journal:

NEW CASTLE, Ind. -- Folks here figured the mile-long stretch of a hundred-plus yellow rail cars, which divides this small town like a graffiti-covered wall, would leave soon after it arrived.

That was a year ago.

"They stayed and they stayed and they stayed," says Bruce Atkinson, a local resident. "Then more moved in."

Tens of thousands of boxcars are sitting idle all over the country, parked indefinitely by railroads whose freight volumes have plummeted along with the economy. And residents of the communities stuck with these newly immobile objects, like the people of New Castle, are hopping mad about it.

Before February 2008, boxcars were a fleeting sight in this hamlet of 17,500 people 50 miles east of Indianapolis. For decades, no more than one or two trains a day traveled down the sleepy short-haul line that cuts through town.

Then rail cars -- 20-foot-tall yellow behemoths covered with the sort of spray-painted artwork once associated with New York City subway cars -- started rolling in by the dozens and grinding to a halt.

Now an elementary-school playground sits only feet from a line of rail cars covered with curse words. Someone with a paintball gun opened fire on one of the cars but missed, pelting a house instead. The looming cars have been blamed for casting shadows over homes that sit as close as 10 feet from the tracks. One woman says the lack of sunlight has turned her backyard into a mud pit. ...

The railroads simply don't have enough space in their yards to store all the idled cars. So they look for convenient, out-of-the-way places to park them -- usually dormant tracks and rail sidings that are rarely used.

In December, residents in southern New Jersey were confused by the sight of a two-mile-long line of rail cars resting on a largely unused rail line in Cape May County. Some of the cars were parked only a few feet from houses. Rumors began spreading that the cars were tankers filled with hazardous materials. The mayors of two local townships assured the public that the cars were empty and posed no danger.

In December, Union Pacific Corp. parked a three-mile-long string of cars in the small town of Thornton, Colo. After staring at the idled cars for a month or so, local residents revolted. The railroad eventually agreed to move the cars to a less-populated area.

Dennis Duffy, Union Pacific's executive vice president of operations, says that in a healthy economy, the railroad might have 5,000 to 8,000 cars in storage. At the moment, it has 48,000 idle cars, he says, forcing it to come up with unconventional solutions." It has parked them on 60 sidings around the country.

Few places, if any, have been forced to endure this spectacle for as long as New Castle, a town of 10 square miles surrounded by sprawling farmland.

A couple of other observations. When traveling to Northern California in January we passed the docks in Benecia where new cars are offloaded from ships. The parking areas were overflowing with inventory.

And last night we visited Downtown Disney. I posted an item previously on the stores that have gone out of that shopping/dining area right outside the main gates to Disneyland and California Adventure, but it's a little stunning to see it in person. Three stores that seemed to be pretty popular are sitting vacant, and a fourth will soon close. You don't expect to see that on a Disney property.

Signs of the Times

The effect of the stumbling economy is being seen more and more around here. On the corner near our house they've just completed a new little strip center with maybe five or six suites, but it doesn't appear they have any tenants. The thing is sitting empty. Brand spanking new. Empty.

About a mile away a similar but bigger strip center opened a month or two ago. There's a Rubio's restaurant in one section, and the other suites were supposed to have a variety of other fast food joints. I talked to the Rubio's manager to see how his business was doing and he told me they're growing all the time, but at least two of the other food places that were to join him have canceled. The entire rest of the strip is vacant.

Most of the older strip centers in the area are still occupied, but it's not unusual to see at least one store with a "Going Out of Business" sign.

Within just a few miles of my house there are three empty Mervyn's stores, an empty Linens and Things, an empty Comp USA, and a soon-to-be empty Circuit City and Home Expo Decor. All are large commercial buildings for which the owners probably have no hope of finding new tenants. What store capable of taking on that much space is likely to come into this area now?

And what out-of-state concern would want to move into the California market with the nation's highest sales, gas and income taxes?

When we see new commercial construction (and there are a few around here) I can't help but think those people are going to be in big trouble.

One thing I'm not seeing much of anymore - new cars. I've seen very few new cars on the road lately, and almost every one of them was Japanese. If the Big 3 are selling any cars these days, they don't seem to be selling them around here.

Obama's new budget promises to raise taxes on business and the "rich" (however he defines that). Raising taxes on business in this economy is quite simply madness. It will stifle the already struggling business environment and will likely result in more job losses. It's foolish. It's as though he's decided that higher taxes on the producers in this country will be the only campaign promise he'll keep, even though it's economic suicide. Results don't matter, only "fairness" as defined by the class envy crowd.

We're a long way from being out of this mess, and the actions that Obama and the congressional Democrats are taking will prolong the pain.