Economics and another mixed bag

Mail 698 Friday, October 28, 2011

Subj: Video: MIT and Harvard economists: "Attention: Deficit disorder!"

http://web.mit.edu/newsoffice/2011/federal-deficit-panel-1006.html?tr=y&auid=9754887

I was disappointed — but not really surprised, alas! — that none of the participants mentioned (much less agreed with) Milton Friedman’s observation, that the burden on the economy is *not* the deficit, but the *spending*. Getting to a zero deficit with government spending eighty percent of GDP will not be an improvement.

Rod Montgomery==monty@starfief.com

One needs a degree in economics (which assumes all kinds of behavior and non-interference from politics before its moels are of any use at all) to believe that one can continue to spend more than you have and not get into trouble. Now there is a difference between borrowing as an investment and borrowing for current expenses, and an even greater difference between borrowing for investment and borrowing for a pleasure trip or a vacation or for luxuries or even “just to have a little better standard of living.”

When I was at Boeing I decided that the space program, which I vigorously supported (and I was on the Boeing team for both space and space proposals) – I decide that the space program’s problems were political not technical. We knew how to do this stuff. Boeing was willing to pay so long as I got my work done. I chose political science rather than economics because it was clear to me that economics was more concerned with its models than with reality. It was also clear that politics trumped economics every time, and understanding politics would be a requirement for getting the space program going.

But I did spend some time trying to understand economics, at least as a practical matter. One observation: Boeing required new hires in the factory are to have their own basic tool kit. The company provided heavy tools, but your basic aviation mechanic tool kit was up to you (just as I had to buy my own stethoscope, but that’s another story). There was a company on Boeing property that would sell you the approved tools for not much down and a monthly paycheck deduction. It was a concession, not owned by Boeing, and how company management chose that company I don’t know; but it illustrated borrowing for investment. If you had a job as an aviation mechanic and didn’t have the tools – most new hires came out of high school and this was often a first job so few did – then it made a lot of sense to borrow a good bit of money in order to have the tools of the trade. Boeing’s advantage out of that was that you had a big incentive to keep your job: Boeing was the only aerospace job in Seattle, and there were lots of recruiters trying to get trained Boeing workers to move to Southern California. (One got to me eventually; but I’ve told that story before. Boeing and I parted company on good terms.) Factory workers who hadn’t paid off their tool kit investment had a good incentive to stay with Boeing at least long enough to get that paid off. The point is that the tool kit was a good investment well worth borrowing money for. It would not have made sense to borrow that much money for a trip to Los Vegas.

I discovered that it took a long time of elementary economics theory study before you got to one that understood that principle. There were other such principles that everyone knew, but economics formally didn’t until you got really advanced.

Political philosophy made more sense.

It still does, but I am astonished at how many political theorists believe that economics understands as much about economics as an experienced aviation mechanic does. The difference is that the mechanic is persuaded that the professor knows more than he does. Don’t we wish…

But we have tried Keynes, and the theory that frivolous spending can stimulate an economic boom. It didn’t and doesn’t. And buying a county a year’s worth of new hire police who will then have to be paid out of new local taxes after the first year makes sense only if your goal is to raise taxes. The goals of most of the new economic plans it to continue the monotonic rise in spending. Jobs would be nice, but the spending seems to be the real goal.

We all know that low taxes (having the US occupation force pay for your defense helps a lot), and economic freedom and produce an economic miracle. And we need one. It is a bit harder for us because we need the military in this dangerous world; but that’s all the more reason to cut needless spending on what is as best a luxury. Whether or not bunny inspectors do any good for the bunnies, they certainly are a drain on the rabbit breeding business. And that’s just a trivial example. There are far larger ones. And none of them can be cut.

And just in, Huntsman on Too Big to Fail

http://professional.wsj.com/article/SB10001424052970204346104576635033336992122.html?mod=opinion_newsreel&mg=reno-wsj 

Cold fusion tested commercially

Dear Dr Pournelle,

perhaps you’ll find this interesting:

http://www.wired.co.uk/news/archive/2011-10/28/cold-fusion

Like the FTL neutrinos, fascinating if true.

Regards,

Rolf Andreassen.

I would love for it to be true, but I get about 20 cold fusion alerts a year and have for a decade. Alas none actually work out. One was intriguing enough that I got someone I trusted to pay a visit to the place. The chap had overlooked an energy source. Alas. Most don’t get that far.

I have heard much about the Bologna experiment, but I have seen little reproducible data. Alas.

Switchblade Secretly Sent To Afghanistan

October 28, 2011: The U.S. Army <http://www.strategypage.com/htmw/htweap/20111028.aspx> recently revealed that it sent some Switchblade UAV systems to Afghanistan last year, for secret field testing. This was apparently successful. It appears that Switchblade is currently used largely by Special Forces and other special operations troops. In September, it was announced that, after a year of successful testing, the army was ordering over a hundred Switchblade UAVs for troop use.

The Switchblade is a one kilogram (2.2 pound) expendable (used only once) UAV that can be equipped with explosives. The Switchblade is launched from its shipping and storage <http://www.strategypage.com/htmw/htweap/20111028.aspx> tube, at which point wings flip out, a battery powered propeller starts spinning and a vidcam begins broadcasting images to the controller. The Switchblade is operated using the same gear the larger (two kg/4.4 pound) Raven UAV employs.

Switchblade can also be launched from the 70mm rocket tubes used on army helicopters. Moving at up to a kilometer a minute, the Switchblade can stay in the air for 20-40 minutes (depending on whether or not it is armed with explosives.) The armed version can be flown to a target and detonated, having about the same explosive effect as a hand grenade. Thus the Switchblade could be useful for ground troops, to get at an enemy taking cover in a hard to see location. Switchblade completed development <http://www.strategypage.com/htmw/htweap/20111028.aspx> two years ago. Technically a guided missile, the use of Switchblade as a reconnaissance tool encouraged developers to refer to it as a UAV.

http://www.strategypage.com/htmw/htweap/20111028.aspx

John

I need to think about this one.

What the US could learn from the British Empire

The desire to send you this link – perhaps you have already seen it –

drove me to re-subscribe: happy to be on board once more!

http://www.washingtontimes.com/news/2011/oct/27/what-america-could-learn-from-the-british-empire-f/

Best,

Geoff

Welcome aboard again. And yes, there are things we can learn from the Brits. As we learned from Thatcher.

You Just Can’t Make This Stuff Up

Jerry,

While we all try and remember that ‘Despair is a Sin’, and try to figure out just where we are going and why we all in this handbasket, it is possible to find considerable wry amusement by reading the headlines in the various newspapers.

From today’s Washington Examiner:

"Muslims at Catholic University complain about crosses

And the DC Human Rights Commission is taking it seriously."

Does this mean the service academies are in jeopardy since attendance at Chapel is mandatory??

Warm Regards,

Larry Cunningham

Subj: Methinks Ms. Noonan finally gets it

http://online.wsj.com/article/SB10001424052970203554104577002262150454258.html?mod=WSJ_Opinion_LEADTop

The Divider vs. the Thinker

While Obama readies an ugly campaign, Paul Ryan gives a serious account of what ails America.

I mentioned this in today’s View.

Anthropogenic Climate Change

Regarding climate change; it is interesting to me that a major source of anthropogenic climate change – and this time one that is real and just about undeniable – is being studiously ignored. Perhaps because there is a cultural angle, and it is one that tends against "traditional" cultures particularly in the fringes of the Sahara.

One of the major causes of desertification is overgrazing by domestic animals, in areas already marginal at best such as the Saharan fringes. This has been going on for millennia. The only real way around this is to change the culture of the relevant areas; and this is precisely what the PC brigade (who are quite ready to make massive changes to Western culture for far less provable reasons) don’t want to admit.

Regards, Ian

Ian Campbell

One of the first things I learned in undergraduate ecology from Rufus King was the role of the goat in the climate change that took the North African coast from being a breadbasket to a near desert. Climate change indeed. Bring in the goats and see what happens. But I doubt that is studied any longer.

Goats, unlike cattle or even sheep, are extremely efficient at eating all the vegetation, including digging up – rooting out – the roots. The result is that the rain runs off, the land gets drier and hotter, the clouds stay higher and drop less rain, and — well you get the idea. It can be described in good mathematical models, provided you know the prevailing wind patterns. Of course this can alter the wind patterns, but not always. Sometimes the feedback is positive, as it was in parts of North Africa. Bring in the goats and make your own desert.

Brooklyn man pleads guilty to trafficking black market kidneys to N.J. residents,

Jerry

Brooklyn man pleads guilty to trafficking black market kidneys to N.J. residents:

http://www.nj.com/news/index.ssf/2011/10/man_pleads_guilty_in_human_org.html

How does Larry feel about having predicted organlegging?

Ed

Ay yi yi yi, in China they do it for chili

Of course there is the question as to which clause in the Constitution makes this a federal matter? Why should I not have the right to sell my organs? But assume that it’s your business, it’s a matter for the states, not the feds.

Cockpit tour of the Dreamliner

The new Dreamliner’s cockpit looks quite plush and fancy. I like the

cushy seats, but didn’t see anywhere to hang the fuzzy dice safely.

http://www.wired.com/autopia/2011/10/cockpit-tour-of-all-nippon-airways-boeing-787-dreamliner/

–Gary P.

The Midwest from the ISS, including the Aurora

Jerry,

Here is a nice picture from the ISS. I rather like it since my stomping grounds are in the shote.

Regards, Charles Adams, Bellevue, NE

<http://earthobservatory.nasa.gov/IOTD/view.php?id=76201>

"….This astronaut photograph highlights the Chicago metropolitan area as the largest cluster of lights, next to the dark patch of Lake Michigan. The other largest metropolitan areas include St. Louis, Minneapolis-St. Paul, and the Omaha-Council Bluffs region on the Nebraska-Iowa border. The northeastern seaboard lies just beyond the Appalachian Mountains, a dark winding zone without major cities….

….In addition to the major metropolitan areas, the rectangular north-south-east-west layout of townships is clearly visible in the rural, lower left of the image. This pattern instantly gives the sense of north orientation (toward the top left corner) and is a distinctive characteristic of the United States that helps astronauts quickly know which continent they are flying over at night…."

Old College Professors

Your recent mention of a teacher’s remark about that Buck Rogers stuff and remembering it many years later reminded me of something one of my college professor said after I gave a speech about orbiting space stations in 1952. Mine didn’t quite turn out that way. Not long after, I dropped out of college to become an Aviation Cadet and enter pilot training. After finishing my five year tour in the AF, I took a job writing Pilot’s Handbooks at McDonnell Aircraft.

Von Braun was one of the principle authors of a small book titled Space Medicine. I used it as the basis for one of my talks in public speaking class at Virginia Tech. The title of my speech was One Thousand Miles Up and was about orbiting space stations. After the talk, the Professor remarked that it was an interesting speech but he didn’t expect to see it in our lifetime. Eight years later I finished my job as writer of the Project Mercury Astronauts Handbook and returned to Virginia Tech to finish my last two years of college. I looked up my old Professor and ask if he remembered my speech. He laughed and said no, but that was what he would have said in 1952.

Chuck Anderson

Re: Government Economic Stimulus Analogous to Bloodletting

Jerry,

Iain Murray, in a letter to the editor at American Spectator, writes that the government economic stimulus programs are quackery as medical bloodletting was. He also advocates for the replacement of GDP – Gross Domestic Product – with GPP – Gross Private Product. GPP would exclude government mandated transactions (he cites the purchase of ethanol in fuel), instead including only those presumably entered into freely.

While GPP might be an imperfect measure it probably is more relevant that GDP. More importantly, he points out that the practice of bloodletting continued well beyond when it was discovered to be misguided, just as has Keynesian’s view of economic stimulus.

http://spectator.org/archives/2011/10/25/stimulus-delusion

Regards,

George

Sounds about right.

An excellent article by Victor Davis Hansen:

http://pajamasmedia.com/victordavishanson/rage-on-and-on-and-on/?singlepage=true

Of course, you could have written it almost verbatim.

Phil

Hansen and I often are in agreement.

Strange Hollows Discovered on Mercury – NASA Science,

Jerry

Strange Hollows Discovered on Mercury:

http://science.nasa.gov/science-news/science-at-nasa/2011/24oct_sleepyhollows/

Just amazing what new stuff pops up when you go out and just look.

Ed

I have no idea what to make of this, but it’s intriguing. Perhaps as a story idea…