After three of the most exhilarating consecutive seasons in Grand Prix history — although some believe Red Bull’s utter dominance of 2011 was on the boring side — Formula One seems headed for changes this year. The biggest issue, as typical in today’s post-recession global economy, is money. F1 takes enormous amounts of capital and it’s just not around that much any more. Despite a resource restriction agreement that is designed to level the playing field and allow smaller teams to remain financially solvent (whether or not competitive), the gap between the sport’s leading organizations and grid backmarkers is as large as ever.

The signs of this situation are evident. Marussia, which started back in 2010 as Virgin, released Timo Glock in favor of yet another sponsored “pay driver,” who basically purchased the seat. Caterham let Heikki Kovalainen go in favor of a second paid seat alongside Charles Pic. Paying for F1 drives is not new, going all the way back to Juan Manuel Fangio’s backing by the Argentine government of Juan Péron in the 1950s. But this time it feels different. The difference is that the F1 grid is shrinking, looking today like a far cry from the halcyon era of the early 1990s, when “pre-qualifying” was required to whittle the field to a “mere” 26 cars for Saturday qualifications. Former Toro Rosso driver Jaime Alguersuari, yet another casualty of the paid driver trend, complains that ”F1 has become an auction.”

For some years now, there have been whispers in Formula 1 that all was not well financially with some of the teams. Finally, one of the most senior figures in the sport has put a public voice to them. McLaren boss Martin Whitmarsh says “of the 11 teams, seven of them are in survival strategy.”

Formula 1 teams showing signs of money problems | BBC Sport.

This helps explain, in part, the relentless pursuit in recent seasons of new venues in developing nations (China, India, etc.) where government-subsidized circuits and rising consumer demand are hoped to help attract new commercial sponsors to the sport. But it is unsettling at best and scary at worst. With the advent of sporting regulation changes requiring engines, transmissions and other vital car parts to last for many races, the demise of special qualifying tires, spare cars and in-season testing, the basic parameters of F1 are shockingly different from its historical roots. Some see these as making competition better; others, like this author, see them as a threat to the fundamental nature of F1 as the epitome of automobile technology and engineering.

Read more »

Related Posts:

• Spitting in the Wind
• WTF
• Ayrton Senna

Is Obama kidding? This is a non-starter.

The proposals from the White House – the first to use hard numbers – include a $1.6T tax increase, a $50B stimulus package and new presidential powers to raise the federal debt limit without congressional approval.

via guardian.co.uk.

Related Posts:

• The Shrinking Middle Class
• What If the Tea Party Hobbits Are Right?
• Is Obama A Lame Duck Already?

Who woulda’ thunk it, but this trend has been going on for years.

The middle class is receiving less of America’s total income, declining to its smallest share in decades as median wages stagnate in the economic doldrums and wealth concentrates at the top.

A study released Wednesday by the Pew Research Center highlights diminished hopes, too, for the roughly 50 percent of adults defined as middle class, with household incomes ranging from $39,000 to $118,000. The report describes this mid-tier group as suffering its “worst decade in modern history,” having fallen backward in income for the first time since the end of World War II.

via Associated Press.

Related Posts:

• Republicans Reject White House Fiscal Cliff Proposals
• What If the Tea Party Hobbits Are Right?
• Is Obama A Lame Duck Already?

I want one of these. Santa?

Related Posts:

• A Changing Formula One Balance Sheet
• Republicans Reject White House Fiscal Cliff Proposals
• Car On a Hot Tin Roof

We’re living in a dysfunctional age. And our political system is as bad as the economic melt-down America has experienced for the past three years. Part of that, as Ezra Klein cogently explains, is that procedural rules are being used to stall substantive progress.

Harry Reid will head to Freedom Plaza on Pennsylvania Avenue and join the drum circle before a majority of Senators agree to give up their individual powers of obstruction so that the country can be governed effectively.

Via washingtonpost.com from glenn’s posterous.

Related Posts:

• Republicans Reject White House Fiscal Cliff Proposals
• What If the Tea Party Hobbits Are Right?
• Bank of America Next to Feed at US Bailout Troth

I haven’t launched a good rant in awhile and it seems this is an appropriate point in our nation’s political history to do so. If you actually believe that American politics is worthwhile, or that there’s a serious difference between the major parties, you probably won’t agree with any of this and should just move on.

Those still left — at least some of you readers, I hope — will recognize that the shrill and polarized debate in Washington over increasing the United States’ debt ceiling is dominating the news. Liberals call it a “faux crisis” because the borrowing limit is something no other major Western nation requires and because it has routinely been raised in the past. Conservatives want to use their leverage to extract concessions from President Obama and his White House on spending without increasing taxes. They’re achieved that result (poignantly noted when the president said Monday night that Republicans did not know how to “take yes as an answer”) and are holding out essentially for the Boehner plan’s promise of a deficit commission that would recommend further spending cuts down the road. Democrats like Harry Reid then respond that the House of Representatives is undertaking a “charade” vote because such a plan would not pass the Senate.

So, here’s the question of the moment. Why is Speaker of the House Boehner unable to bring his Republican colleagues into line and get his plan enacted? The answer is the slew of new, Tea Party members of Congress — which venerable, former maverick Sen. John McCain called “Hobbits” the other day — like freshman Republican Joe Walsh of Illinois.

In two separate closed door meetings, Speaker Boehner told Tea Party Republicans it was time to close ranks around his bill to raise the debt limit even though it doesn’t cut spending as much as they’d like. Boehner lashed out at the conservatives, telling them to “Get your ass in line.”

Can Boehner Get Tea Party Behind His Debt Plan? | CBS News.

The Tea Party’ers say that $25B in discretionary spending cuts starting in 2012 — and even a claimed $6 trillion over 10 years — is a drop in the bucket for what is today already a $14 trillion and growing national debt.  They’re right. They say that a “clean” debt ceiling increase is out of the question because spending in Washington, DC, under both parties, has climbed for 20 years, and jeopardizes America’s economic future if not solved. They’re right about that, too. They say that pushing spending cuts into the future will not work because every deficit commission, including a bipartisan one (Simpson-Boles) earlier this year. has gone nowhere, and because the deficit problem is a structural one due to entitlements (Medicare, Social Security), unfunded wars (Afghanistan, Libya) and non-discretionary, non-defense spending, like interest. They’re right. And they say, finally, that the only way to get anyone’s attention in Washington over these long-term issues — which are otherwise and always ignored by politicians concerned with short-run re-election — is by preciptitating an even more immediate crisis.

Playing off the title of this post, what if they’re right about that, too? With the almost equal split between voters (and traditional politicians) who want taxes left alone (or cut) in favor of spending reductions and those who want revenue “enhancements” and tax increases to reduce the deficit, there’s little hope of rational fiscal budgeting decisions in Washington any time soon. Yet after August 2 or 9 or whenever the U.S. Treasury can no longer issue bonds, there will be little or no possibility that serious and long-term deficit reduction can occur. Tea Party Founder Judson Phillips Blasts John Boehner | Politico.com. Washington will just go on, divided, spending money on the structurally fixed stuff while eking out small cuts from the infinitesimally tiny bit of discretionary spending left at the federal level. In short, are the Tea Party’ers right that a deficit commission and plan are about as worthless as the 9/11 Commission and DHS’ homeland security plan?

You betcha, as one oft-parodied Alaskan former governor likes to say. There is just no way that the Obama White House agrees to any fundamental changes in social safety net spending. After all, health care reform increased costs for Medicare and Medicaid and added millions to the programs. (I have not forgotten that George W. Bush’s prescription drug plan did the same thing, BTW.) Nor is there any chance that conservatives will scale back defense spending and, with it, America’s ability to project military power globally. So the only way out of the stalemate is to force both sides to do something, in a crisis, they would otherwise always and to their core oppose as a matter of principle. Put their feet to the fire and watch them jump.

America was founded by revolutionaries. They dumped tea into Boston harbor because of taxes spent on stuff the citizens did not care about and for which they had no influence. The Tea Party congressional members say they were voted into Washington to shake things up and that, unless they oppose the short-run bandaid offered up for the debt ceiling increase, it will still be business as usual in DC. Getting to “yes” gets them nothing. They may be a bit demented, perhaps a tad shrill, but they sure seem correct!

Related Posts:

• Republicans Reject White House Fiscal Cliff Proposals
• Is Obama A Lame Duck Already?
• The Road We’ve Traveled

As the Nation’s Pulse Races, Obama Can’t Seem to Find His [NYTimes.com].

President Obama’s favorite word is “unprecedented,” as Carol Lee of Politico pointed out. Yet he often seems mired in the past as well, letting his hallmark legislation get loaded up with old-school bribes and pork; surrounding himself with Clintonites; continuing the Bushies’ penchant for secrecy and expansive executive privilege; doubling down in Afghanistan while acting as though he’s getting out; and failing to capitalize on snazzy new technology while agencies thumb through printouts and continue their old turf battles.

It’s not a good political sign at all that liberals seem to be departing the president in droves. The more things “change,” the more it appears politicians give us more of the same.

Related Posts:

• Leadership and Comments
• Can BHO Play FDR?
• Much Truth is Said In Jest

So, $165B so far is still not enough for those imbeciles! The New York Times is reporting that Bank of America will need $100 billion in equity within the next 100 days. That is in addition to the $45 billion in cash and $120 billion financial backstops that the government already committed to shore up Bank of America’s capital base.

What a complete waste of money and attention.  None of these people, whether in the government or the financial system, has any idea what is happening or how to fix it.  So what they do is what has always been done — throw money (ours), and lots of it, at the problem.  But nothing is sticking.

Posted via email from glenn’s posterous

Related Posts:

• Two Steps Back
• Spitting in the Wind
• WTF

So the Federal Reserve has decided to donate yet another $800 billion to U.S. banks in a move dubbed “quantitative easing.” Bloomberg News calls it Spitting in the Wind. I call it madness. Throwing money at problems never worked for social problems and is unlikely to work for liquidity problems. The Fed can “urge” banks to lend all it wants, but so long as fear is the ultimate driver and lenders are able to hang onto this money, or use it for M&A deals, little is going to change. These guys are fumbling around in the dark. They’re lurching from one bonehead move to another, while doing everything wrong when the issue is confidence, not fundamentals.  

Why not try letting some of these institutions fail, since depositors are insured, and let stockholders — not taxpayers — take the hit?  Nah, that might be dubbed “socialism”!!  What do you call what’s been happening already?  As the Wall Street Journal observed, “in a year when many of the nation’s banks have effectively been nationalized by a Republican administration, “socialism” is very much in the eye of the beholder.” Will Obama Usher In a Socialist Economy?  I don’t want to own CitiBank, AIG and Bear Sterns, let alone General Motors. Neither should you, and certainly not through our government.

Related Posts:

• WTF
• Bank of America Next to Feed at US Bailout Troth
• Two Steps Back

Now the Treasury Department has backed away from using the $700 billion bailout fund passed by Congress to buy toxic mortgage assets as originally intended, and says it will focus instead on shoring up financial institutions with direct investments.  Wasn’t reducing exposure to devalued real estate mortgages the whole point?  What an absurd system, since as we now unfortunately know, the banks are just sitting on those billions and still not lending.

This is the Keystone Cops of financial oversight, IMHO.  And the bully pulpit crap just won’t work here.  Regulators to Banks: Get Off Your Butts and Lend [L.A. Times]

Related Posts:

• Bank of America Next to Feed at US Bailout Troth
• Spitting in the Wind
• WTF