The Aviation Conspiracy- That wasn’t
By: Rene Velez July 27, 2008
For those of you that don’t know, apart from my interest in business, politics and the global economy, I am also an aviation enthusiast and a licensed pilot. Some events in the not so distant past together with current events got me to thinking about the aviation industry as a whole. What lay ahead for an industry that in my opinion, is in for significant change. Or perhaps, I should say evolution.
Just a Thought
There was a time when I used to believe in conspiracy theories. Today, I largely discount them. Why you ask? I have learned two important facts of life and business. (1) Most large organizations that could gain in some way from conspiracy are having too hard a time trying to get the ordinary things right. Great conspiracies require a great deal of alignment and work to carry out. Hence, they usually don’t materialize. (2) In today’s information era it takes a small miracle to keep a secret. Sooner, or later, word gets out and it’s a conspiracy no more. So I am not a conspiracy theory believer. (although they do exist) However, I do think that when a lot of money is involved or at stake and that economic power is put to force…..the consequences are somewhat similar. So what does this have to do with anything? Judge for yourself.
What We Hear in The News
A large part of my comments here have to do with isolated stories and ideas that somehow have formed some linear and logical conclusion in my mind. I must admit, I amaze myself sometimes. Here are the headlines that make up my theory. Not quoted and in my own words.
(1) Airlines Face Challenges Due to High Fuel Prices
(2) Demographics are changing population density in urban settings.
(3) Airlines have Improperly Blamed General Aviation for Flight Delays.
(4) Airlines Want General Aviation to Pay User Fees.
(5) GPS Navigation is Transforming Global Navigation Systems.
(6) Airline Customer Satisfaction At An All Time Low.
(7) FAA Examines Changes in The 51% Rule.
(8) Kit Built Aircraft Outperform Production Aircraft of the Day.
(9) Fractional Ownership Flights Fastest Growing Segment of Aviation.
The Paradigm Shift In Aviation
Personally, I don’t think the airlines will disappear. I do however, think the airlines will change into something other than what they are today. Perhaps, on a smaller and even a nationally subsidized scale. Of course this type of change in a billion dollar industry could create a formidable force against General Aviation. The up and coming industry that I think has a real potential to change. If I am right, it will be one of the biggest changes to mass transit in the current century. (maybe)
Here is the theory……..One day you could drive to your local airport, hop on a small plane, type in your desired destination (say Miami to Orlando, Florida) and the small plane’s navigation system will connect into the aerospace commuter network and que your flight into a domestic air route superhighway. The plane will communicate with you, taxi itself to the runway and takeoff and land automatically, taxi you to the local terminal, while you make phone calls and read the paper. No pilot required!
To the average Joe or Mary this sounds right out of the Jetson’s. But the technology is already here. What does not exist is the infrastructure. And the airlines are worried their days are numbered.
Still don’t believe its here. Read the news on the war in Iraq. Predator, UAV’s (Unmanned Aviation Vehicles) are taking off in Afghanistan, remotely operated by pilots, sitting at a computer, from the USA. (Halfway around the globe!) They are doing reconnasince missions and when called on can even launch weapons and form offensive air to ground attacks or provide troop support. It’s here, its now!
What We Already Know
We are all tired of hearing and reading the stories of passengers who are frustrated with airline service. Delays, lost luggage, security checks, airborne health risks, extra baggage fees, passenger rage. It’s uncivilized to travel by airline these days.
We also know that fractional ownership and private air transport is in fact one of the fastest growing segments of aviation in the last decade. In large part for the corporate elite and wealthy but there are examples of low cost commuter options too.
The kit building industry is producing, safe, easy to build kit airplanes that are superior in performance and efficiency than certified production airplanes. These are kits you can build in your garage!
With general aviation, there is usually no need to arrive in a busy metropolitan airport. Travel to a nearby regional airport, with little to no traffic delays and you can even be picked up right at the door of your plane. No hassle, security checks or long lines. Often times your business professionals have business outside of the major metropolitan areas. So this is very convenient.
GPS navigation is slowly taking over other methods of navigation. In all my years of flying the only time I used NDB was simply to see if it worked. Although ILS approaches are still used today more and more these are being supplanted in use by GPS approaches. In fact some ILS approaches are being discontinued altogether. Every major flight school I have visited recently has trainers with IFR rated GPS systems. And students are requesting to be taught on their use.
One look at the general aviation instrumentation developments of the past decade and the only limit to what you can get is how much you can afford. And this will likely decline in cost much as all technology has come down in price over the years. Yet, the cost today is still within reach of many. The typical businessman who is also a pilot could afford a three dimensional GPS navigation system with terrain features and built in XM weather notification for what a couple of high end laptops would cost.
For $85,000 and about 700 hours of your time, you can buy a 2 seat kit airplane, that you bolt together, glue, add some minor body filler, sand and paint in your two car garage, that will outperform a $200,000 Cessna. Granted the Cessna may have 4 seats but depending on how heavy your payload is you may not be able to use all four seats. This aircraft will have a GPS system, and glass cockpit devices and get fuel efficiency that rivals a Honda Civic’s 30 miles to the gallon. This is close to the efficiency of airline travel. This is here and now.
Conclusion
I truly do not believe in conspiracy theories, but when you have at risk billions of dollars like the airlines and you see that your critical mass and economies of scale are slipping, it’s a fare bet that they will do everything they need to do to put the competition out to dry. It’s capitalism at play. The real danger is that General Aviation is highly fragmented. Many small companies that compete for a small market. Product liability is huge. Many of these companies are thinly capitalized. In fact many exist only because of the entrepreneurship of the owners, their hard work and their absolute love of aviation. If you think about that you can see why so much innovation has occurred in the last two decades. All the right human variables are there.
General Aviation can help our economy and promote transportation and logistical science to a level never before seen on this planet. This is another American dream waiting to happen. If we as a society stand behind General Aviation, we could create many competitive advantages in a global economy. Here are a few ideas that may emerge:
(1) Development of sciences for road traffic congestion and logistics in high density metropolitan areas.
(2) Create new cost effective modes of product distribution.
(3) Development of better satellite technologies.
(4) Enable the portability of Human Capital.
(5) Expansion of regional economies.
The sciences of General Aviation can lend themselves to so many economic models that its contribution could have a similar paradigm shift on the global economy as computers have on the way we do business today.
I guess I should send a few bucks to organizations such as AOPA and EAA. In addition, I should tell people more often; I am a pilot and how important that freedom is to our country. America is one of only a few countries where we have this freedom. Don’t let government and politics stand in front General Aviation. It would be a costly mistake.
Monday, July 28, 2008
The Cost of a Green Planet
The Cost of a Green Planet
By: Rene Velez July 27, 2008
I doubt that anyone has passed a day without some notice on the desire to live and prosper green. High energy prices, global warming and perhaps the new desire to have America become energy independent, is making headlines. Today it seems that ordinary citizens, corporations large and small and even government is making a move in the right direction. All of this is good. I hope we stay focused and on target.
T Boone Pickens even has his own ad that says we should seek out alternative energy sources. Frankly even if he has a vested interest, I don’t care if he makes another billion. Al Gore, has recently borrowed a JFK line to become energy independent in 10 years. People seem to think that this is very optimistic. Yes it is, but….I have to agree. We need to be very wary of the nay sayers.
Technology
The average American citizen does not understand how much technology already exists to make this happen. In addition even small changes, collectively, have very profound effects. In my home its been years since I implemented two plans that have saved me thousands so far. I have purchased energy efficient CFC bulbs for my home, where ever they could be used. Even my pool light, and inside refrigerator lights are CFC. I would guess total savings monthly….about $15.00. This doesn’t take into account the bulbs, although slightly more expensive, last longer too! In addition I invested in a computerized thermostat for the home and office climate system. At about $80.00 each I suspect, the cost of each was recaptured within 4 months, since my electric bill dropped about $20.00 per month. The unit turns itself off or on as programmed saving a lot of energy. I need to mention this is old technology used in a new way. CFC bulbs are in effect florecent bulbs that have been around for a long time. The computerized time thermostat is technology from the 1960’s.
Other, things that can save energy that are old technology are, solar panels and wind generators. Solar panels have been used in some form or another in South Florida since the 1970’s. However, wind energy has not been used as much because we don’t get enough consistent wind to make it viable. However, in the Midwest there are homes that have erected their own wind generators that enable these homes not only to go off the grid, but to actually sell excess power to the electric company. If I could make a profit center out of wind I would do it in a heartbeat.
Another old technology that I have not heard too much of as of late is “cogeneration”. Here is how it works. I like most homes in South Florida have an energy efficient central air conditioner. The outside unit which is composed of the compressor and coils generate a lot of heat as a by product of cooling my home. That unit would be tied to my hot water heater so that heat would make hot water for bath water and other home uses. What this means is that less energy is used overall, since the initial energy to cool your home substantially heats all of your hot water needs. In fact it can make your air conditioner more energy efficient as water is a great heat sink. Again simple technology, it exists today, yet it’s not used very often. I suspect we will here a lot about this in the future.
Okay I know what you are thinking…why is this not used more often? Simple business decision. I rather sell you two appliances than one. Ouch! capitalism hurts!
The Future cost of a Green America
If you think that $4.00 per gallon gas is expensive, you are really going to get sticker shock when you buy your 60 miles to the gallon Ford. We can in fact become more energy efficient, but of course everything that consumes energy of some kind or another will probably cost more. In fact that may really be the biggest obstacle to over come. Why? …lots of reasons. Many companies that are committed long term on old technologies will simply pass the cost of retooling to new products. The implementation of existing and new technology into current products simply will add a layer of sophistication that costs more. Although, I suspect with some products, sales volume and economies of scale will decrease prices somewhat.
In the near term I have made a decision to hold on to my gas furnace on wheels until new technology comes to market. And I suspect many others are thinking along the same lines. So instead of buying today’s hybrid, or the Honda Civic that gets 28 miles to the gallon, I will hold off and wait until say 2010 when Honda or some other company comes out with a car that gets 50 miles to the gallon. In fact, if petro prices maintain their upward curve, what I envision are a series of mass marketing attempts by auto manufacturers, to bring new technology cars to the market fast to prop up sales, until really great advances and innovation can be made affordable.
Getting over the Rainbow
I for one do not see that going green will mean a lower cost of living for everyone. In fact quite the opposite might occur. From cars to air conditioners to the office building where we work, everything will be greener and cost more. Kind of gives the green movement a new look. But, we must move on. We most get over it. In the end we can come very close to being energy independent. We can make a a serious contribution to saving our planet. We can also maintain competitive on a global market, as we license new energy technology to other countries that have us at a disadvantage on labor. That’s hard to see for most people but advances in fuel efficiency can amount, in the long term, to trillions of dollars in investments, research and development. This means jobs, it also means value. Any country that falls behind that curve will eventually loose global market share. So advances in this area are critical for our country.
Foreign Affairs and Wars
I have long suspected that one big reason for maintaining our dependency on foreign oil has been because: (1) its easy to maintain the status quo. Why bother to fix it if it works. (2) By pulling the billions of oil dollars out of the middle east we risk a geo-political imbalance.
I wish I was smart enough to tell you what are some possible outcomes. But I suspect even the best scholars on the subject really don’t know. I will however, take some guesses. I think much of the oil money that is reinvested in the USA will stay here. We are still a safe haven for foreign investment. In fact we are a good bet on new energy technologies. Suppose the middle east falls apart, having money in those countries is not a good idea. If I was a rich oil sheik I would be investing heavily on companies that will sell and license technologies to India and China. These are two huge energy consuming giants that will have to come up to the bar if they want to compete. Another very important point. We have taken the position to be the world's policeman. Although we need to be more cautious of which fights we pick, we also need to be more efficient has to how we fight them. We also have to be more independent to maintain global supremacy. At today’s cost of fuel and with our dependency on foreign oil we can be severely impacted by unstable political regimes and the cost to fight wars could send ripples through our economy, If it does not bankrupt us first. We wouldn’t be the first great nation to go bankrupt fighting wars and maintaining our borders.
Conclusion
We will either pay now or pay later, but we have to start to go green. We need to be first. We need to gain economic and political advantage.
As I have said many times before. Don’t assume your local politician or business leader will do this on their own. Again make your voice heard. Write/email your congressman or woman and your local and city officials. Tell them in no uncertain terms what you want. Send letters and emails to business leaders. People are still wondering whether Al Gore’s statement is plausible. Who cares! We need to start moving in that direction regardless. Let’s test the theory and see if it can be done. We can talk about it later. Hey….for years after we put a man on the moon, many people still didn’t believe it. This is something we can do while we have both feet planted on our own planet!
By: Rene Velez July 27, 2008
I doubt that anyone has passed a day without some notice on the desire to live and prosper green. High energy prices, global warming and perhaps the new desire to have America become energy independent, is making headlines. Today it seems that ordinary citizens, corporations large and small and even government is making a move in the right direction. All of this is good. I hope we stay focused and on target.
T Boone Pickens even has his own ad that says we should seek out alternative energy sources. Frankly even if he has a vested interest, I don’t care if he makes another billion. Al Gore, has recently borrowed a JFK line to become energy independent in 10 years. People seem to think that this is very optimistic. Yes it is, but….I have to agree. We need to be very wary of the nay sayers.
Technology
The average American citizen does not understand how much technology already exists to make this happen. In addition even small changes, collectively, have very profound effects. In my home its been years since I implemented two plans that have saved me thousands so far. I have purchased energy efficient CFC bulbs for my home, where ever they could be used. Even my pool light, and inside refrigerator lights are CFC. I would guess total savings monthly….about $15.00. This doesn’t take into account the bulbs, although slightly more expensive, last longer too! In addition I invested in a computerized thermostat for the home and office climate system. At about $80.00 each I suspect, the cost of each was recaptured within 4 months, since my electric bill dropped about $20.00 per month. The unit turns itself off or on as programmed saving a lot of energy. I need to mention this is old technology used in a new way. CFC bulbs are in effect florecent bulbs that have been around for a long time. The computerized time thermostat is technology from the 1960’s.
Other, things that can save energy that are old technology are, solar panels and wind generators. Solar panels have been used in some form or another in South Florida since the 1970’s. However, wind energy has not been used as much because we don’t get enough consistent wind to make it viable. However, in the Midwest there are homes that have erected their own wind generators that enable these homes not only to go off the grid, but to actually sell excess power to the electric company. If I could make a profit center out of wind I would do it in a heartbeat.
Another old technology that I have not heard too much of as of late is “cogeneration”. Here is how it works. I like most homes in South Florida have an energy efficient central air conditioner. The outside unit which is composed of the compressor and coils generate a lot of heat as a by product of cooling my home. That unit would be tied to my hot water heater so that heat would make hot water for bath water and other home uses. What this means is that less energy is used overall, since the initial energy to cool your home substantially heats all of your hot water needs. In fact it can make your air conditioner more energy efficient as water is a great heat sink. Again simple technology, it exists today, yet it’s not used very often. I suspect we will here a lot about this in the future.
Okay I know what you are thinking…why is this not used more often? Simple business decision. I rather sell you two appliances than one. Ouch! capitalism hurts!
The Future cost of a Green America
If you think that $4.00 per gallon gas is expensive, you are really going to get sticker shock when you buy your 60 miles to the gallon Ford. We can in fact become more energy efficient, but of course everything that consumes energy of some kind or another will probably cost more. In fact that may really be the biggest obstacle to over come. Why? …lots of reasons. Many companies that are committed long term on old technologies will simply pass the cost of retooling to new products. The implementation of existing and new technology into current products simply will add a layer of sophistication that costs more. Although, I suspect with some products, sales volume and economies of scale will decrease prices somewhat.
In the near term I have made a decision to hold on to my gas furnace on wheels until new technology comes to market. And I suspect many others are thinking along the same lines. So instead of buying today’s hybrid, or the Honda Civic that gets 28 miles to the gallon, I will hold off and wait until say 2010 when Honda or some other company comes out with a car that gets 50 miles to the gallon. In fact, if petro prices maintain their upward curve, what I envision are a series of mass marketing attempts by auto manufacturers, to bring new technology cars to the market fast to prop up sales, until really great advances and innovation can be made affordable.
Getting over the Rainbow
I for one do not see that going green will mean a lower cost of living for everyone. In fact quite the opposite might occur. From cars to air conditioners to the office building where we work, everything will be greener and cost more. Kind of gives the green movement a new look. But, we must move on. We most get over it. In the end we can come very close to being energy independent. We can make a a serious contribution to saving our planet. We can also maintain competitive on a global market, as we license new energy technology to other countries that have us at a disadvantage on labor. That’s hard to see for most people but advances in fuel efficiency can amount, in the long term, to trillions of dollars in investments, research and development. This means jobs, it also means value. Any country that falls behind that curve will eventually loose global market share. So advances in this area are critical for our country.
Foreign Affairs and Wars
I have long suspected that one big reason for maintaining our dependency on foreign oil has been because: (1) its easy to maintain the status quo. Why bother to fix it if it works. (2) By pulling the billions of oil dollars out of the middle east we risk a geo-political imbalance.
I wish I was smart enough to tell you what are some possible outcomes. But I suspect even the best scholars on the subject really don’t know. I will however, take some guesses. I think much of the oil money that is reinvested in the USA will stay here. We are still a safe haven for foreign investment. In fact we are a good bet on new energy technologies. Suppose the middle east falls apart, having money in those countries is not a good idea. If I was a rich oil sheik I would be investing heavily on companies that will sell and license technologies to India and China. These are two huge energy consuming giants that will have to come up to the bar if they want to compete. Another very important point. We have taken the position to be the world's policeman. Although we need to be more cautious of which fights we pick, we also need to be more efficient has to how we fight them. We also have to be more independent to maintain global supremacy. At today’s cost of fuel and with our dependency on foreign oil we can be severely impacted by unstable political regimes and the cost to fight wars could send ripples through our economy, If it does not bankrupt us first. We wouldn’t be the first great nation to go bankrupt fighting wars and maintaining our borders.
Conclusion
We will either pay now or pay later, but we have to start to go green. We need to be first. We need to gain economic and political advantage.
As I have said many times before. Don’t assume your local politician or business leader will do this on their own. Again make your voice heard. Write/email your congressman or woman and your local and city officials. Tell them in no uncertain terms what you want. Send letters and emails to business leaders. People are still wondering whether Al Gore’s statement is plausible. Who cares! We need to start moving in that direction regardless. Let’s test the theory and see if it can be done. We can talk about it later. Hey….for years after we put a man on the moon, many people still didn’t believe it. This is something we can do while we have both feet planted on our own planet!
Friday, July 25, 2008
Miami, South Florida - The Next Real Estate Boom
Miami, South Florida – The Next Real Estate Boom
By: Rene Velez (July 21st, 2008)
Good god, the bottom hasn’t even been reached and here I am writing about the next real estate boom in Miami. With 10 years of excess inventory in condominiums in downtown Miami and no one with a comprehensive answer as to how all those units will be absorbed. With rows of houses up for sale and a foreclosure rate that is keeping attorneys, banks and courts very busy why would I make a comment about the next real estate boom in Miami? I guess, it is inevitable that,……….. it will come. In fact I think it might come faster than what anybody may be willing to predict or admit. Yeah…I know it’s bad out there. For sure … I am not crazy and even the most pessimistic of economist will tell you….its just another cycle. But let’s not stop there. The reality is there is much about SoFlo (South Florida) that many have failed to really take in. In the end it adds up to a layer of insulation that SoFlo has. It’s something that few people get when they come here. In fact it’s something few people recognize on a daily basis even though we live here. We take it for granted. We hear of it. Yet somehow, the glare gets in our eyes and we don’t see it, the heat tires us until we can think no more. Then we start to sip on Cuba Libre, Mojitos or the local Margarita and suddenly it’s just not that important.
The Tropical Vibe
This is an element of the local life style that has in some way an insulating factor to the local economy. Certainly, this is not an economic factor that you would learn in a Harvard, Princeton or Yale economics class. But you might hit upon it at Florida International University or University of Miami. We have a certain Tropical Vibe and culture. Sometimes it shifts completely into the island mentality time zone but, if for no other good reason, only because we are attached and part of the upper 48 we maintain some sense of formality. Yes we have a Tropical Vibe. It’s in the food we eat, the cloths we wear, the warmth of the air. It’s in the way we relax and in the partners we attract. It’s in the sun on our faces and shoulders. We are a beautiful people in a beautiful place. The sun shines bright and the seasons soft and subtle. Yes this is an important variable as to why we do well. Everyone wants to be here. Everyone wants to live on vacation. So in the long run people will continue to come.
Value
Here is a term that most economist understand. We have “VALUE”! Yes it’s gotten very expensive to live here. I know that. In fact I am not sure how some manage. I am not sure how I manage. But here is something to consider. Go anywhere else in the USA, or internationally and find a place where you are 8 miles from the beautiful Caribbean waters and still find a home for less than $600,000. In a nutshell even expensive ocean front property is still a relative bargain considering its year round utility in a subtropical climate. So people will continue to come. We have “Value”!.
Culture
When I came here in 1976 from New York, I always new Miami had culture. Not in the New York kind of way, but you know, there was a way and a method to this place, and there were identifiable ethnic and cultural traits that gave Miami a culture. Today…..the scene is exploding. We have the Arts! We are in fact a metropolis recognized throughout the USA and the World. We have good food and dining. We have hotels. We have major universities. We have the people. People from all over the Caribbean, Central and South America, The USA, Europe, Asia and Canada. We are a cultural melting pot. We have glamour and the not so glamorous. We have baseball, hockey, basketball, football. We have festivals, air shows, auto racing, regattas. We have politics, trade, travel and tourism, music and cinema. We have a culture and a life. Hence people will come.
The Underground Economy
That’s right …….what no one in Miami wants to speak of. We have an underground economy. No one knows for sure how much, but it’s been here for decades scratch that “centuries”. Slave labor, rum running, drugs etc. etc. Today, we don’t have slave labor or rum running although some may argue that point, we have flight capital and offshore banking. This is money that comes to or through South Florida due to economic and political risk in the Caribbean and Central and South American countries, finds its way here and into our local economy. For sure we have some drug money also. Somehow, this adds to the economic stability of our local economy. I admit it is an ugly and seedy side of this economy but everybody has trash.
Retirement Stability Factor
People have been coming here for years for the warm weather and easy seasonal transitions. It’s easier on the bones and the subtle seasons makes life more pleasing. Sunshine is happiness and a good life. Yes. We need to give more credit to those retired folk who live on a fixed pensions, pay their taxes, spend a lot of money in healthcare goods and services and help stimulate the economy. Let’s also not forget the wealthy counterparts who come here to soak up the sun, play on our golf courses and eventually move into the varied assisted living facilities and nursing homes. This economic factor is not only stimulating but stabilizing in our local economy.
Gateway to the Americas
Here is a slogan I have heard often over the years. It’s time to really capitalize on this. No doubt that because of our inherent proximity to the Caribbean, Central and South America we are in fact the gateway to these countries. We have historically, benefited from this fact. Perhaps more so because we have a ready, willing and welcoming participatory population of Hispanics and culture that is very inviting to trade and business. Many of these countries are still developing countries. This essentially translates to further development and opportunities for business. There are many challenges in making this more of a robust and symbiotic relationship but the makings are already there. Although there are other states competing for this business, Miami is the ideal location for the furtherance of economic ties and for trade and tourism. Although I suspect the development of many Caribbean, Central and South American countries will take a long time I can see that many companies will choose to have their headquarters in south Florida. For this reason, this is a long term stabilizing factor and an opportunity to attract more business and population density into the area in years to come.
Conclusion
Here in South Florida we have many challenges ahead of us. Despite our economic melt down in the credit markets, overdevelopment in real estate, rising price of petro fuels and rising prices in the general cost of living….we have a vibrant future. I should mention that none of this will work out for the benefit of all if we do not have sound leadership in our local government. We need to have a local government that is focused on seeing many of these factors into fruition and not just consumed by petty politics, power grabbing and un-equitable squabbling. We must be united in culture and not divided in our vision. Our culture makes us vibrant and strong but I often fear it is also a factor that tears us apart as a community. Likewise, we need to have the right leadership at the national level in Washington, DC to help us achieve all of our economic capabilities. South Florida has a potential voice and influence in the Caribbean and Central and South American politics that can benefit the USA and these developing countries. We must be cognizant of this and exercise our unique knowledge and introspect towards moving Washington DC in the right direction. It’s safe to say Washington DC does not have a good foreign policy history. It’s very safe to say or simply to look back at how many businesses have come to South Florida and failed miserably simply because they didn’t understand the dynamics of our special populous. Along the way we need to make South Florida, more affordable so that we do not continue to widen the gap between the wealthy and the middle class. Many of the hardships, from our gateway partners are caused by just such an issue. Affordable and workforce housing will continue to be of utmost importance to our community. In addition transportation and education will be key drawing a population that will help achieve our local goals.
We will go through a variety of economic cycles. Those who stay and are aware of these cycles stand to gain from much opportunity. We are somewhat unique in our position and we might just be unique in the timing of history. Currently, we are in transition and we need to hope, pray and influence our leadership to invest in the future. We have unique economic variables and intangible drivers to our growth, our prosperity, our economy, our politics and how we live and see the future. We are SoFlo part of the Sunshine State!
By: Rene Velez (July 21st, 2008)
Good god, the bottom hasn’t even been reached and here I am writing about the next real estate boom in Miami. With 10 years of excess inventory in condominiums in downtown Miami and no one with a comprehensive answer as to how all those units will be absorbed. With rows of houses up for sale and a foreclosure rate that is keeping attorneys, banks and courts very busy why would I make a comment about the next real estate boom in Miami? I guess, it is inevitable that,……….. it will come. In fact I think it might come faster than what anybody may be willing to predict or admit. Yeah…I know it’s bad out there. For sure … I am not crazy and even the most pessimistic of economist will tell you….its just another cycle. But let’s not stop there. The reality is there is much about SoFlo (South Florida) that many have failed to really take in. In the end it adds up to a layer of insulation that SoFlo has. It’s something that few people get when they come here. In fact it’s something few people recognize on a daily basis even though we live here. We take it for granted. We hear of it. Yet somehow, the glare gets in our eyes and we don’t see it, the heat tires us until we can think no more. Then we start to sip on Cuba Libre, Mojitos or the local Margarita and suddenly it’s just not that important.
The Tropical Vibe
This is an element of the local life style that has in some way an insulating factor to the local economy. Certainly, this is not an economic factor that you would learn in a Harvard, Princeton or Yale economics class. But you might hit upon it at Florida International University or University of Miami. We have a certain Tropical Vibe and culture. Sometimes it shifts completely into the island mentality time zone but, if for no other good reason, only because we are attached and part of the upper 48 we maintain some sense of formality. Yes we have a Tropical Vibe. It’s in the food we eat, the cloths we wear, the warmth of the air. It’s in the way we relax and in the partners we attract. It’s in the sun on our faces and shoulders. We are a beautiful people in a beautiful place. The sun shines bright and the seasons soft and subtle. Yes this is an important variable as to why we do well. Everyone wants to be here. Everyone wants to live on vacation. So in the long run people will continue to come.
Value
Here is a term that most economist understand. We have “VALUE”! Yes it’s gotten very expensive to live here. I know that. In fact I am not sure how some manage. I am not sure how I manage. But here is something to consider. Go anywhere else in the USA, or internationally and find a place where you are 8 miles from the beautiful Caribbean waters and still find a home for less than $600,000. In a nutshell even expensive ocean front property is still a relative bargain considering its year round utility in a subtropical climate. So people will continue to come. We have “Value”!.
Culture
When I came here in 1976 from New York, I always new Miami had culture. Not in the New York kind of way, but you know, there was a way and a method to this place, and there were identifiable ethnic and cultural traits that gave Miami a culture. Today…..the scene is exploding. We have the Arts! We are in fact a metropolis recognized throughout the USA and the World. We have good food and dining. We have hotels. We have major universities. We have the people. People from all over the Caribbean, Central and South America, The USA, Europe, Asia and Canada. We are a cultural melting pot. We have glamour and the not so glamorous. We have baseball, hockey, basketball, football. We have festivals, air shows, auto racing, regattas. We have politics, trade, travel and tourism, music and cinema. We have a culture and a life. Hence people will come.
The Underground Economy
That’s right …….what no one in Miami wants to speak of. We have an underground economy. No one knows for sure how much, but it’s been here for decades scratch that “centuries”. Slave labor, rum running, drugs etc. etc. Today, we don’t have slave labor or rum running although some may argue that point, we have flight capital and offshore banking. This is money that comes to or through South Florida due to economic and political risk in the Caribbean and Central and South American countries, finds its way here and into our local economy. For sure we have some drug money also. Somehow, this adds to the economic stability of our local economy. I admit it is an ugly and seedy side of this economy but everybody has trash.
Retirement Stability Factor
People have been coming here for years for the warm weather and easy seasonal transitions. It’s easier on the bones and the subtle seasons makes life more pleasing. Sunshine is happiness and a good life. Yes. We need to give more credit to those retired folk who live on a fixed pensions, pay their taxes, spend a lot of money in healthcare goods and services and help stimulate the economy. Let’s also not forget the wealthy counterparts who come here to soak up the sun, play on our golf courses and eventually move into the varied assisted living facilities and nursing homes. This economic factor is not only stimulating but stabilizing in our local economy.
Gateway to the Americas
Here is a slogan I have heard often over the years. It’s time to really capitalize on this. No doubt that because of our inherent proximity to the Caribbean, Central and South America we are in fact the gateway to these countries. We have historically, benefited from this fact. Perhaps more so because we have a ready, willing and welcoming participatory population of Hispanics and culture that is very inviting to trade and business. Many of these countries are still developing countries. This essentially translates to further development and opportunities for business. There are many challenges in making this more of a robust and symbiotic relationship but the makings are already there. Although there are other states competing for this business, Miami is the ideal location for the furtherance of economic ties and for trade and tourism. Although I suspect the development of many Caribbean, Central and South American countries will take a long time I can see that many companies will choose to have their headquarters in south Florida. For this reason, this is a long term stabilizing factor and an opportunity to attract more business and population density into the area in years to come.
Conclusion
Here in South Florida we have many challenges ahead of us. Despite our economic melt down in the credit markets, overdevelopment in real estate, rising price of petro fuels and rising prices in the general cost of living….we have a vibrant future. I should mention that none of this will work out for the benefit of all if we do not have sound leadership in our local government. We need to have a local government that is focused on seeing many of these factors into fruition and not just consumed by petty politics, power grabbing and un-equitable squabbling. We must be united in culture and not divided in our vision. Our culture makes us vibrant and strong but I often fear it is also a factor that tears us apart as a community. Likewise, we need to have the right leadership at the national level in Washington, DC to help us achieve all of our economic capabilities. South Florida has a potential voice and influence in the Caribbean and Central and South American politics that can benefit the USA and these developing countries. We must be cognizant of this and exercise our unique knowledge and introspect towards moving Washington DC in the right direction. It’s safe to say Washington DC does not have a good foreign policy history. It’s very safe to say or simply to look back at how many businesses have come to South Florida and failed miserably simply because they didn’t understand the dynamics of our special populous. Along the way we need to make South Florida, more affordable so that we do not continue to widen the gap between the wealthy and the middle class. Many of the hardships, from our gateway partners are caused by just such an issue. Affordable and workforce housing will continue to be of utmost importance to our community. In addition transportation and education will be key drawing a population that will help achieve our local goals.
We will go through a variety of economic cycles. Those who stay and are aware of these cycles stand to gain from much opportunity. We are somewhat unique in our position and we might just be unique in the timing of history. Currently, we are in transition and we need to hope, pray and influence our leadership to invest in the future. We have unique economic variables and intangible drivers to our growth, our prosperity, our economy, our politics and how we live and see the future. We are SoFlo part of the Sunshine State!
Wednesday, July 16, 2008
Vacation Alternative Methods of Transport / a reflective journey
Vacation Alternative Methods of Transport / a reflective journey
By: Rene Velez July 14th, 2008
This year my family and I took an alternate travel medium for our vacation. Instead of living the jet set life, we took the train. Yes, for those of you who routinely fly and get there in record time this may sound slow, however, I saved on gas and travel expenses and made a “Green” travel. In the process I felt more……..civilized.
Train travel is still considered a method of luxury travel. Names such as the Orient Express, or the Hiram Bingham to Machu Picchu are well known examples. There are several in Europe as well. But you need not go to distant places. Amtrak still has places to go and things to do.
When you come to think about it, a typical two and one half hour jet flight, say Miami to New York still is a 5 to 6 hour ordeal when you account for: (a) time to get to the airport, (b) advance check in, (c) extra baggage fees, (d) degrading security check points, (e) taxi and ramp time waiting for takeoff clearance, (f) claiming luggage, (g) travel to your destination.
Rail travel provides coach sleeping, or sleepers. Coach sleeping is basically sleeping in an oversized First Class Airline Seat. Sleepers are in effect small rooms with beds and can accommodate two to four in a given configuration. The sleepers also provide for showers and other amenities. On our trip from Sanford, FL. to Lorton, VA., we dined at night in the dining car. The food was fairly tasty. Much better than at many restaurants. In fact much better than I can ever recall in any first class flight I have ever taken. The dinner even included wine! A continental breakfast was served in the morning. A movie was shown in the lounge cars were you could buy beer and other alcoholic beverages and where snacks, fruits and coffee were offered for free. Yes…for free! In fact all the meals where included as part of the fair. The lounge cars was the place to get into a card game, a board game or simply to hang out and talk. Each coach seat has its own 110V electrical outlet. So bringing your laptop, play station or even charging your phone is no trouble at all. In our case we took the auto train so we even brought along the car, fully packed with all our travel gear. This is a real savings as we need not wait for a taxi or rent a car. In about 20 minutes after we got off the train our car was there waiting for us to be on our way.
I must say I was impressed. The whole mode of travel was fun, less restrictive than air travel. I felt comfortable and I even enjoyed talking to some of my fellow travelers. I haven’t said that about airline travel in quite some time. I was less stressed. I had time to read the paper or even a book if I wished. I could walk the train, go to the lounge cars and look out the window and see the rest of America.
So what did this luxury travel cost me for the four of us inclusive of on board meals, snacks and to bring my car along……$987.00 round trip! I actually felt even better when I started to think the trip I took was more fuel efficient than driving or airline travel. Taking the train is “Green”.
Okay…. Now that I have told you how good all this is what are the down sides. I must admit…if you’re in a hurry this isn’t for you. So airline travel is still safe in that respect. Sanford, FL. to Lorton, VA was a 13 hour ride. You get to sleep though. There were some sections were the view was not that great. Some towns seemed like remnants of the industrial revolution. In a weird way they called upon memories of old times and an economy that is no more. Although not pretty some of these old defunct towns have an artistic beauty all there own. In yet other areas you do see American poverty. Small towns with old wooden homes, or brick buildings in agricultural or industrial settings that depict our neglected sectors of society.
Nonetheless, I am a better man for my travels. The meandering railway together with the faded glory of yester year towns adds to my understanding of changing times, a changed economy, a population that is in need and how America has much to accomplish in the years to come. The slower place of travel added to my vacation as it made me reflect and think of my place in society and how fortunate I am. It also made my feel for my fellow citizens and their struggle to make an existence in a changed economy. Vacations are supposed to give you that time to see things you have missed and my train travel did just that.
This year is an election year and how appropriate that we visited our nations capital. This is a year of change and many Americans have change in their mind. I hope train travel develops further in years to come as a more energy efficient method of transportation. Train travel can be cost effective and affordable to all and green. I also hope many Americans get to see America in the way I saw part of America you otherwise may not see through jet travel. Some of these poor towns simply are not travel destinations and some might well be avoided altogether. It worries me that America, in this year of election will vote for change for the sake of change and not really understand the issues.
When visiting Europe I was impressed with the abundance of train stations, travel destinations and the affordability of train travel. I wondered how America did not follow suit. How can we as a nation have so badly neglected such a mode of transportation vital to many of our people? Why has industry not supported major railways and formed distribution hubs for goods based on a backbone of railways and regional trucking companies?
To some extent train travel, may well be taken for granted for people who live in metropolitan areas with diverse railway systems such as New York or Chicago. But, here in South Florida the railway system leaves much to be desired. With the cost of petro fuels on a sharp increase, perhaps no time is better to start considering these options than now.
I was reading an article that Warren Buffet is buying the rights to Southwestern rail lines. I suspect he is getting very good prices for these lines. Do you suppose he is buying these lines in anticipation of high oil prices? Do you suspect that railway distribution networks can be created to ship goods over long distances and then trucked to remote locations is cheaper and more cost effective than trucking small loads across the United States. At today’s prices, if sustained, I think there is a good bet on that! My guess is what’s old will come again and technology will improve what we once thought of railways.
My train travels have left me thinking of old ideas and old technology in a new way. However, changing political leadership will not create opportunity of itself, changing the way our political leaders think and how we as citizens reward them and how they stay in office will create change for the better. The cards are in our hands as citizens.
By: Rene Velez July 14th, 2008
This year my family and I took an alternate travel medium for our vacation. Instead of living the jet set life, we took the train. Yes, for those of you who routinely fly and get there in record time this may sound slow, however, I saved on gas and travel expenses and made a “Green” travel. In the process I felt more……..civilized.
Train travel is still considered a method of luxury travel. Names such as the Orient Express, or the Hiram Bingham to Machu Picchu are well known examples. There are several in Europe as well. But you need not go to distant places. Amtrak still has places to go and things to do.
When you come to think about it, a typical two and one half hour jet flight, say Miami to New York still is a 5 to 6 hour ordeal when you account for: (a) time to get to the airport, (b) advance check in, (c) extra baggage fees, (d) degrading security check points, (e) taxi and ramp time waiting for takeoff clearance, (f) claiming luggage, (g) travel to your destination.
Rail travel provides coach sleeping, or sleepers. Coach sleeping is basically sleeping in an oversized First Class Airline Seat. Sleepers are in effect small rooms with beds and can accommodate two to four in a given configuration. The sleepers also provide for showers and other amenities. On our trip from Sanford, FL. to Lorton, VA., we dined at night in the dining car. The food was fairly tasty. Much better than at many restaurants. In fact much better than I can ever recall in any first class flight I have ever taken. The dinner even included wine! A continental breakfast was served in the morning. A movie was shown in the lounge cars were you could buy beer and other alcoholic beverages and where snacks, fruits and coffee were offered for free. Yes…for free! In fact all the meals where included as part of the fair. The lounge cars was the place to get into a card game, a board game or simply to hang out and talk. Each coach seat has its own 110V electrical outlet. So bringing your laptop, play station or even charging your phone is no trouble at all. In our case we took the auto train so we even brought along the car, fully packed with all our travel gear. This is a real savings as we need not wait for a taxi or rent a car. In about 20 minutes after we got off the train our car was there waiting for us to be on our way.
I must say I was impressed. The whole mode of travel was fun, less restrictive than air travel. I felt comfortable and I even enjoyed talking to some of my fellow travelers. I haven’t said that about airline travel in quite some time. I was less stressed. I had time to read the paper or even a book if I wished. I could walk the train, go to the lounge cars and look out the window and see the rest of America.
So what did this luxury travel cost me for the four of us inclusive of on board meals, snacks and to bring my car along……$987.00 round trip! I actually felt even better when I started to think the trip I took was more fuel efficient than driving or airline travel. Taking the train is “Green”.
Okay…. Now that I have told you how good all this is what are the down sides. I must admit…if you’re in a hurry this isn’t for you. So airline travel is still safe in that respect. Sanford, FL. to Lorton, VA was a 13 hour ride. You get to sleep though. There were some sections were the view was not that great. Some towns seemed like remnants of the industrial revolution. In a weird way they called upon memories of old times and an economy that is no more. Although not pretty some of these old defunct towns have an artistic beauty all there own. In yet other areas you do see American poverty. Small towns with old wooden homes, or brick buildings in agricultural or industrial settings that depict our neglected sectors of society.
Nonetheless, I am a better man for my travels. The meandering railway together with the faded glory of yester year towns adds to my understanding of changing times, a changed economy, a population that is in need and how America has much to accomplish in the years to come. The slower place of travel added to my vacation as it made me reflect and think of my place in society and how fortunate I am. It also made my feel for my fellow citizens and their struggle to make an existence in a changed economy. Vacations are supposed to give you that time to see things you have missed and my train travel did just that.
This year is an election year and how appropriate that we visited our nations capital. This is a year of change and many Americans have change in their mind. I hope train travel develops further in years to come as a more energy efficient method of transportation. Train travel can be cost effective and affordable to all and green. I also hope many Americans get to see America in the way I saw part of America you otherwise may not see through jet travel. Some of these poor towns simply are not travel destinations and some might well be avoided altogether. It worries me that America, in this year of election will vote for change for the sake of change and not really understand the issues.
When visiting Europe I was impressed with the abundance of train stations, travel destinations and the affordability of train travel. I wondered how America did not follow suit. How can we as a nation have so badly neglected such a mode of transportation vital to many of our people? Why has industry not supported major railways and formed distribution hubs for goods based on a backbone of railways and regional trucking companies?
To some extent train travel, may well be taken for granted for people who live in metropolitan areas with diverse railway systems such as New York or Chicago. But, here in South Florida the railway system leaves much to be desired. With the cost of petro fuels on a sharp increase, perhaps no time is better to start considering these options than now.
I was reading an article that Warren Buffet is buying the rights to Southwestern rail lines. I suspect he is getting very good prices for these lines. Do you suppose he is buying these lines in anticipation of high oil prices? Do you suspect that railway distribution networks can be created to ship goods over long distances and then trucked to remote locations is cheaper and more cost effective than trucking small loads across the United States. At today’s prices, if sustained, I think there is a good bet on that! My guess is what’s old will come again and technology will improve what we once thought of railways.
My train travels have left me thinking of old ideas and old technology in a new way. However, changing political leadership will not create opportunity of itself, changing the way our political leaders think and how we as citizens reward them and how they stay in office will create change for the better. The cards are in our hands as citizens.
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