Category Archives: Business

The “Adult In The Room”

…has blown up a bi-partisan plan. Because reelection is more important to him than saving the economy, or country.

[Update a few minutes later]

Our petulant and inept president.

It’s a bad combination. And I think that more and more people are starting to recognize it.

[Tuesday morning update]

Is Barack Obama a has been? I think he’s a never was, and people are finally starting to figure it out.

[Update a few minutes later]

Thoughts on the Obama plan:

As the president faced the nation on Monday evening, he knew his economic legacy was on the line. Historians will judge him for his economic stewardship.

The assessment will not be good. Going deep into his presidential term, he presides over a country that suffers from high unemployment, record home foreclosures, and a no-growth economy. But when the most pivotal issue of our decade emerged — a $16.8 trillion debt crisis — where was the “Obama plan”?

The sad truth is there is no Obama plan and there never has been a plan. The president gingerly approached the debt crisis as he has approached other issues: intellectually, coolly, passively, and with great detachment.

Bill Clinton never had a plan to balance the budget, either. It didn’t happen until the Republicans took over. But not having grown up a red-diaper baby, he was more ideologically flexible than Barack Obama.

[Update mid morning]

Remembering the golden age of Clinton. Accurately, unlike the Democrats who think that the boom was a result of tax increases.

Going Galt

The government’s war against business, energy and jobs continues:

I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What’s the use? I don’t know. I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.

As some have already noted, for some people Atlas Shrugged is a cautionary tale, for others it’s a how-to manual.

[Update a couple minutes later]

Actually, there are parallels on other fronts as well:

“As federal criminal statutes have ballooned, it has become increasingly easy for Americans to end up on the wrong side of the law. Many of the new federal laws also set a lower bar for conviction than in the past: Prosecutors don’t necessarily need to show that the defendant had criminal intent. . . . The U.S. Constitution mentions three federal crimes by citizens: treason, piracy and counterfeiting. By the turn of the 20th century, the number of criminal statutes numbered in the dozens. Today, there are an estimated 4,500 crimes in federal statutes, according to a 2008 study by retired Louisiana State University law professor John Baker. There are also thousands of regulations that carry criminal penalties. Some laws are so complex, scholars debate whether they represent one offense, or scores of offenses. Counting them is impossible. The Justice Department spent two years trying in the 1980s, but produced only an estimate.” Yet we retain the fiction that everyone is supposed to know the law.

From the book: “There’s no way to rule innocent men… When there aren’t enough criminals, one declares so many things to be a crime… that it becomes impossible for men to live without breaking laws.”

We really are living it, and she really was prophetic.

[Update a few minutes later]

This seems related, somehow: the Anglosphere, before the lights went out.

Is The Left Right?

Claire Berlinski is suffering a little cognitive dissonance.

My brief response, without a lot of deep thought. I can’t speak for Europe, which never had anything resembling our Constitution and Bill of Rights, but I think that the biggest flaw of the Founders was in failing to recognize the apparently ductility of the Commerce Clause, which has basically rendered the 9th and 10th amendments moot. They also perhaps didn’t anticipate the degree to which the courts might come to aid and abet to that end. But at bottom, it is not a failure of freedom, but a failure to adhere to the original intent of the Constitution to limit government.

Why The Boehner-Obama Talks Fell Apart

Keith Hennessey explains:

President Obama used the Gang of Six’s plan as an exit strategy. He backtracked on taxes, knowing this would force the Speaker to abandon negotiations, and knowing he could use the Republican Senators in the Gang to argue from a position of increased rhetorical strength in the ensuing debate. It’s a clever strategy but it belies the President’s public posture.

The media narrative about the president being the “only adult in the room” is now, and always was, nonsense.

[Update a while later]

The president tries to panic the markets.

Well, you have to admit, it’s one of his few talents.

[Update a couple minutes later]

A reminder, the problem isn’t the debt ceiling — it’s the debt, and the continuing unwillingness of Washington to take it seriously. The Democrats in particular insist on living in a fantasy world.

[Update a while later]

Per the above, some very worrisome thoughts:

Here’s the position I think we may be in. We’ve been negotiating with the President and The Democrats in Congress on the assumption that they’re sane. It’s okay to play hardball with these guys because eventually, whether they like it or not, reality insists upon itself and they have to cave. It’s a painful process so you expect some tantrum throwing and caterwauling, but eventually they HAVE to accept reality. Except if they’re not sane. If they want five apples and there’s only two plus two but they CAN’T ACCEPT that two plus two equals four. Orwell wasn’t just writing a parable about the eventual end point of IngSoc. He was describing what human psychology can drive Ministers to inflict upon the populace for the sake of “justice.” I’m worried they’ll pull the trigger on default as just one more “political” step in the march towards freedom from want or whatever other principle they’re operating under. They’re playing this game as if they could win, as if taxes in a downturn are a good idea with benign consequences. As if debt equivalent to GDP is survivable for the world’s anchor economy/currency, let alone sustainable.

And so maybe, just maybe, Republican strategy (what little there is of it) has badly misread the opposition. Obama tried to add 400 billion in taxes to a deal he had already agreed with Boehner at the last minute. Boehner walks out cause Obama is negotiating in bad faith and has been all along, but what if Obama is actually incapable of good faith negotiation? I think right now that it’s actually possible we won’t see a deal at all. Because the Republicans are looking at the math and at reality and saying “Okay, Democrat demands can’t be serious because they can’t possibly work” and Democrats are looking at politics and how it works and saying “We don’t have to give in cause that’s not how you win these things. You pin it on the other guy politically and then reap the political dividends.” I wasn’t around for the start of WW I, but I get the feeling I understand Kennedy’s fascination with Tuchman’s Guns of August. I’m not talking about a shooting war, but about leaders overestimating and underestimating and just plain misjudging each other in a brinksmanship scenario. In short, it could be too late to do anything when people finally wake up. The crisis may have already arrived with an economic and fiscal momentum all its own that no amount of dealing or compromise or statesmanship can stop.

They’ve been demonstrating economic lunacy for the past two and a half years (longer, really, but they didn’t have enough power to actually implement it), as things continue to deteriorate. Why would they stop now?

More Shuttle Post Mortem

Amos Zeeberg, over at Discover, says it was a flop, and that we deluded ourselves about it for far too long. It’s actually worse than he says, though. Not sure where he gets these numbers:

The shuttle was billed as a reusable craft that could frequently, safely, and cheaply bring people and payloads to low Earth orbit. NASA originally said the shuttles could handle 65 launches per year; the most launches it actually did in a year was nine; over the life of the program, it averaged five per year. NASA predicted each shuttle launch would cost $50 million; they actually averaged $450 million. NASA administrators said the risk of catastrophic failure was around one in 100,000; NASA engineers put the number closer to one in a hundred; a more recent report from NASA said the risk on early flights was one in nine. The failure rate was two out of 135 in the tests that matter most.

It’s actually a lot worse than that. If you include development costs, we now know that it was about a billion and a half per flight (~$200B in life-cycle costs over 135 flights, in current-year dollars). Even on an annualized basis, it was probably never as low as $450M (again, current-year dollars).

This isn’t quite right, though:

Tellingly, the U.S. space program is abandoning spaceplanes and going back to Apollo-style rockets.

That depends on what you mean by “the U.S. space program.” Yes, Mike Griffin retrogressed down that road, until it became unaffordable, and Congress continues to insist on it for now (until the fiscal situation truly implodes in the coming years, if not months), but the private people aren’t all doing that. For instance, Dreamchaser isn’t an “Apollo-style rocket,” and none of the suborbital people are, so if any of them graduate to orbit in the future, they will be distinctly un-Apollo like.

There are valuable lessons to be learned from the Shuttle, but as I wrote a couple weeks ago, we have to make sure that we learn the right, and not the wrong ones.

Razib has further comments over at Discover.

[Via commenter Paul Dietz]

[Update a few minutes later]

Will McLean makes a good point in comments — the Air Force continues to support X-37B, which is hardly “Apollo like.”

[Mid-morning update]

Mike Griffin: The Shuttle program was oversold.

Nowhere near as much as Constellation was.

For The Heavy-Lift/SLS Fans

Here is a typical exchange in comments over at Space Politics:

We’ll need heavy-lift at some point, and it might as well be now. Then payloads can be designed around it. And Ron, just because the HLV is the only thing in the budget now, that doesn’t mean that things like hab modules, departure stage, etc. won’t show up down the road: they will, as the budget picture improves, as it surely will.

Here was my response:

We’ll need heavy-lift at some point, and it might as well be now.

Even if true, this is logically absurd. If it is very expensive, and we don’t need it now, but there are other things that we do need now, then it makes sense to wait until we need it. Do you not understand the concept of limited resources and time value of money?

just because the HLV is the only thing in the budget now, that doesn’t mean that things like hab modules, departure stage, etc. won’t show up down the road: they will, as the budget picture improves, as it surely will.

Let me elaborate. Tell me where I’m going wrong, here. We can’t get to the moon without a lander. We can’t get to the moon without a lunar insertion stage. We can get to the moon without a heavy lifter, if we’re willing to either design the stage to accept and store propellant on orbit, or put up a separate propellant depot. Given that we have finite resources, if one wanted to get to the moon as quickly as possible using those resources, and one was rational, one would want to focus on those elements that are essential to get to the moon, and put off those things that are not so. This is just basic critical path analysis.

When someone says that they want the latter now, even though it won’t be needed until “at some point,” with the hope (and hope is not a plan) that the other things will somehow magically “show up down the road,” one is demonstrating that the priority is not in fact sending people beyond earth orbit, or going to the moon, but just building cool giant rockets.

It’s fascinating to drill through the illogic of much of these arguments and try to figure out what it really motivating those making them, because it surely can’t be sending any significant numbers of people into space. It seems to be driven mostly by emotion, whether dislike of Obama, a nostalgia for Apollo, or just a big-rocket fetish.

[Update early afternoon]

Mark Whittington doubles down on the illogic (no, I’m not going to reward him with a link):

There are a couple of problems with Rand’s rant.

First, he assumes that the lander has to be developed in tandem with the heavy lifter. To be sure there are some small scale projects going on at JSC and Marshal, but a lander does not have to be ready the very second that the heavy lifter is. The SLS/Space Ship Formally Known as Orion can do flight testing to lunar orbit and the lagrange points while the lander is developed.

Second, Rand’s fixation on fuel depots as a panacea flies in the face of every study done on the subject, including the Augustine Committee, that concluded that shooting fuel tanks from the Earth’s surface does not buy one any savings but does assume a great deal more risk. Now, fuel from the Moon, deployed to one of the Lagrange points using a mass driver is another thing entirely. However, first one has to get to the Moon and for that one needs heavy lift.

Ignoring the nonsense that my post was a “rant” (or enraged, or leaping the length of my chain, or any of the other typically insane characterizations of my posts by him), no, I don’t assume that “the lander has to be developed in tandem with the heavy lifter.” No one sane reading what I wrote would infer such an assumption. I assume a fact — that no heavy lifter is needed at all. What I assume is that the sooner you have a lander, the sooner you will get to the moon. The longer you delay the lander, the longer it will take you to get to the moon, because you cannot get to the moon without a lander, whereas you can do so without heavy lift. (I note with amusement that, as in this comments thread, he still doesn’t understand the difference between “formerly” and “formally.”)

As for his comment about the Augustine panel, he obviously didn’t read the report (or as is often the case, he didn’t read it for comprehension), whose members described propellant depots as a “game changer.” Not to imply that I agree with all aspects of the report, of course, but since he chose to cite it himself, from the report summary:

Potential approaches to developing heavy-lift vehicles (Table 2-1) are based on NASA heritage (Shuttle and Apollo) and EELV (evolved expendable launch vehicle) heritage. Each has its distinct advantages and disadvantages.

In the Ares-V-plus-Ares-I system planned by the Constellation program, the Ares I launches the Orion and docks in low-Earth orbit with the Altair lander launched on the Ares V. It has the advantage of projected very high ascent crew safety, but it delays the development of the Ares V heavy lift vehicle until after the independently operated Ares I is developed.

In a different, related architecture, the Orion and Altair are launched on two separate “Lite” versions of the Ares V, providing for more robust mass margins. Building a single NASA vehicle could reduce carrying and operations costs, and accelerate heavy-lift development. Of these two Ares system alternatives, the Committee finds the Ares V Lite in the dual mode the preferred reference option.

The more directly Shuttle-derived family consists of in-line and side-mount vehicles substantially derived from the Shuttle, providing more continuity in workforce. The development cost of the more Shuttle-derived system would be lower, but it would be less capable than the Ares V family and have higher recurring costs. The lower launch capability could eventually be offset by developing on-orbit refueling.

The EELV-heritage systems have the least lift capability, so that to provide equal performance, almost twice as many launches would be required, when compared to the Ares family. If on-orbit refueling were developed and used, the number of launches could be reduced, but operational complexity would be added. However, the EELV approach would also represent a new way of doing business for NASA, which would have the benefit of potentially lowering development and operational costs. This would come at the cost of ending a substantial portion of the internal NASA capability to develop and operate launchers. It would also require that NASA and the Department of Defense jointly develop the new system.

All of the options would benefit from the development of in-space refueling, and the smaller rockets would benefit most of all. The potential government-guaranteed market for fuel in low-Earth orbit would create a stimulus to the commercial launch industry. In the design of the new launcher, in-space stages and in-space refueling, the Committee cautions against the tradition of designing for ultimate performance, at the cost of reliability, operational efficiency and life-cycle cost.

Emphasis mine. Note that the only disadvantage claimed is the “addition of operational complexity.” Whether this is a sufficiently bad thing as to result in the deliberate avoidance of it, requires deeper analysis not presented in the summary, but clearly, they are not recommending against it (and indeed, if one reads between the lines, they are hinting that it would be a damned good idea in the final paragraph). It is in fact very clear from that paragraph that, contrary to Mark’s nonsense, it does in fact buy savings, and there is no mention of risk.

In the table of recommendations, every launch system option presented, for constrained, moon first, and flexible path, other than Ares V, utilizes orbital refueling. All of these were options presented, and nowhere did they say that the Ares V was to be preferred because it avoided refueling, or that any of the other options were undesirable for that reason. In other words, there is zero basis in the report for his characterization of it as “offering no savings,” or “assuming a great deal more risk.”

Here’s a hint, Mark. We know that, given your training and experience (and other issues), you’re unable to coherently argue the technical issues on your own, but if you’re going to make arguments from authority, you should at least make sure that the authority agrees with you.

Instead, once again, he prefers to live in his own alternate reality.

[Update a while later]

Just to reemphasize — the report says pretty much the opposite of what Mark claims it does, and in fact the last paragraph quoted above implicitly assumes that in-space refueling will be “designed.” Yet the Congress has completely ignored this, and has provided zero funding for it, instead pouring billions into a new rocket that isn’t needed.

Remembering Borders

Like Ann Arbor native Jay Nordlinger, I remember when there was just one Borders, and what an amazing place it was in the seventies. I wasn’t shocked that it became a chain, though I wondered why such a chain would have just happened to have started in the town where I went to school. But the owners didn’t have the foresight of Jeff Bezos, and anticipate the future. But even if they had, it’s not clear that they could have saved the brick and mortar. Even the best buggy-whip manufacturers didn’t survive the advent of the automobile. Like, Jay, though, I wonder how we will be able to browse on the Internet, and how to capture the scents and the social experience of discovering a wonderful book for which you hadn’t been looking.

Michigan native (and resident once again) John Miller has more thoughts, as does Rich Lowry, with some relevant commentary on creative destruction and the moribund stasis of government bureaucracies.

[Update a while later]

Many commenters note, both here and at the links, that Borders committed suicide by losing touch with what made it attractive in the first place, so it wasn’t even one of the better buggy-whip makers. It’s also worth noting that some of the carriage makers survived into the auto age by adapting (e.g., Fisher Body in Flint and later other places as part of GM, and Studebaker).

Non-Intuitive

A few years ago, on a Delta flight, I noticed that the airline was boarding people in the middle first. I asked the flight attendant about it, and he said that studies had shown that it was faster than back to front, which surprised me, because the latter had always been conventional wisdom and industry practice. Now, American claims that, based on simulations, random boarding is better yet. I’d be interested to see a plausible explanation for this, if true.

It’s A Feature, Not A Bug

Steny:

House Minority Whip Steny Hoyer (D.-Md.) said on the House floor last night that if the balanced budget amendment Republicans are supporting is ratified and included in the Constitution it would make it “virtually impossible” to raise taxes.

Gee, wouldn’t that be awful? Does he really think this helps his case?

There are actually a lot of problems with the BBA, but this isn’t one of them.