The inhibition of innovation.
More thoughts from Will Wilkinson.
[Bumped]
Category Archives: Business
More Munchausen By Proxie
Thoughts on the economy:
When I think about the economy I think about a plump man who has just been hit by a truck while crossing a street and is in severely critical condition with internal bleeding. Instead of just stabilizing his hemorrhaging, the doctor decides that while the patient is unconscious, he might as well also do a face lift, some coronary bypasses and a stomach-stapling to keep him from gaining weight while he is recovering (if he does recover). After all, a crisis is not to be wasted.
The problem is that all these ambitious operations create too much of a burden for the human body to bear.
Similarly, we have an administration that is simultaneously seeking to end the recession, discussing drastic changes to laws on foreclosures and energy use and completely changing the health care system. I respectfully question whether all of this makes sense.
It’s a good question. And I’m pretty sure of the answer.
Cross Your Fingers
Well, actually, engineers aren’t supposed to be superstitious like that, but here’s hoping for a successful Falcon 1 launch this evening (late afternoon on the west coast).
Paul Krugman Acolytes
…versus reality:
…it should be clear that the Fed causing a housing bubble in order to bring about “soaring household spending” was Krugman’s optimal situation, whether or not he thought it was doable at the time. Given the consequences of the housing bubble that did ultimately happen, that alone should be enough cause for the public to stop listening to this fellow.
But…but…! He has a Nobel Prize! And he writes for the New York Times! The New. York. Times.
Not listen to Paul Krugman? Why, it would be madness!
Next, they’re going to tell me I should pay no attention to Maureen Dowd, or Frank Rich.
[Via Joe Katzman]
A Truth And Reconciliation Commission
Does Boeing need one for the Dreamliner?
When you look at both Boeing and Airbus, you have to ask, can’t anyone play this game? And how did we get in a position in which there are only two manufacturers of large air transports in the world?
The Threat To Innovation
…from Obamacare.
[Update a few minutes later]
…the truest answer as to why we do not accept Medicare is that the service does not focus on what we feel is paramount: practicing effective and efficient medicine in order to ultimately achieve and maintain the good health of our patients. The service’s paltry reimbursement structure coupled with its impossible to-adhere-to regulations doesn’t allow us to offer a complete service to our patients. This complete service includes wellness care as well as the ability to take the time to understand each patient’s unique medical needs and circumstances.
The crux of the issue is that Medicare worries about the forest, in other words, the internal process, money management, reimbursement and policing agreements, data mining, and organizing dozens of internal bureaucracies. These agendas and policing policies help the Medicare service to manage the forest, however these are often in direct conflict with what we feel is key to effective healthcare: taking care of the individual, or each tree.
OK, Dems, want us to have confidence in a “public option”? Fix Medicare first.
The President’s Economic Op-Ed
..and the devastating response:
It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall.
Uh-oh. Why are the verbs now in the future tense? And what happened to the specific and oft-repeated prediction of 3.5 million jobs by the end of next year? Those are important language changes, along with the implicit admission that the stimulus has not yet “ramped up.”
This did not have to be a two-year program. Congress could have front-loaded the stimulus had they instead given the cash directly to the American people, as they did on a bipartisan basis in early 2008. We would have saved much of it, paying off our mortgages, student loans, and credit cards (which would not be a bad thing). We would have spent the rest much more quickly than the federal and state government bureaucracies now stumbling through their usual corrupt, slow and inefficient processes. Instead the President handed the money and program design over to a Congress of his own party, who saw it as a big honey pot rather than as an exercise in macroeconomic fiscal policy. The President’s primary macroeconomic policy mistake was allowing Congress to pervert a rapid Keynesian stimulus into a slow-spending interest-based binge.
The President is correct that the stimulus will increase economic growth, mostly next year. That is too late, and later than it could have been had they done it right.
I wonder who actually wrote the thing?
[Mid-afternoon update]
Stephen Spruiell takes it apart as well:
The swift and aggressive action we took in those first few months has helped pull our financial system and our economy back from the brink. We took steps to restart lending to families and businesses, stabilize our major financial institutions, and help homeowners stay in their homes and pay their mortgages.
Let’s examine that phrase, “swift and aggressive action.” For Treasury Secretary, Obama rammed a tax cheat through the confirmation process by claiming he was the only man who could do the job. Secretary Geithner then proceeded to unveil a plan to save the banking system that inspired so little confidence, the Dow fell 300 points upon its announcement. Geithner’s Public-Private Investment Partnership to buy troubled assets from banks has failed to launch, primarily because the Financial Accounting Standards Board loosened mark-to-market accounting rules, thus enabling banks to avoid write-downs on their toxic mortgage-backed securities. Now that banks can hold those assets without booking losses, they have little incentive to sell them at a discount to the P-PIP. With P-PIP looking increasingly like a dud, the adminitration’s only real plan to deal with crippled banks is to cross its fingers and hope the economy grows fast enough to enable them to recover on their own.
Nor has Obama’s Making Home Affordable plan been any great success, as Joe Nocera explained in Friday’s NYT (best summed up by the phrase “drop in the bucket”). As NRO’s editors pointed out when the plan was announced, “The relatively small group of in-deep but creditworthy homeowners who could be helped by Obama’s plan already are positioned to refinance at better rates, or to move from variable-rate loans to low-drama fixed-rate mortgages, without a $475 billion government intervention.” That’s $75 billion for the program and $400 billion to shore up Fannie and Freddie, the real beneficiaries of the deal.
On the other hand, Obama did move swiftly and aggressively to sign the Lilly Ledbetter act, exposing companies to spurious equal-pay lawsuits; to roll back Clinton-era welfare reforms; to use TARP funds to shield the UAW from the full fallout of the GM and Chrysler bankruptcies, and so on. Maybe that’s what he meant.
It’s a barrel chock full of fish to shoot.
[Update late afternoon]
The Growing Disconnect
…between the people and the politicians:
Some years after The Road to Serfdom, Hayek wrote an essay called “Why I Am Not a Conservative.” In it, he describes “as liberal the position which I hold and which I believe differs as much from true conservatism as from socialism,” and he proceeds to argue that “the liberal today must more positively oppose some of the basic conceptions which most conservatives share with the socialists.” Of course, Hayek uses liberal in its classic sense, referring to someone whose aim is “to free the process of spontaneous growth from the obstacles and encumbrances that human folly has erected.” (John Galt couldn’t have put it better.)
Moreover, what Hayek says about conservatives applies equally well to many who today call themselves progressives:
“Conservatives are inclined to use the powers of government to prevent change or to limit its rate. . . . They lack the faith in the spontaneous forces of adjustment. . . . The conservative feels safe and content only if he is assured that some higher wisdom watches and supervises change, only if he knows that some authority is charged with keeping the change ‘orderly.’ “
In this view, neither today’s “progressives” nor today’s “conservatives” are liberal, which is to say committed, in Hayek’s words, to the “set of ideals that has consistently opposed all arbitrary power.”
Happily, a good many people in America remain committed to just those ideals, and what the burgeoning sales of books such as those by Hayek and Rand really suggest is that more and more of them are becoming aware that, precisely in regard to those ideals, there is a growing disconnect between the country’s political class and its citizens. It was manifestly on display last month when the House approved the Waxman-Markey cap-and-trade bill, which in its final form was longer than Atlas Shrugged and which none of the members voting on it had read.
It’s a shame that the Atlas Shrugged movie won’t be out until after the 2010 elections. But it will be before the 2012 elections. Perhaps by then, having done it once, the people will have gotten the “how cool it is to vote for a black guy” thing out of their system.
[Early afternoon update]
A commenter expands on my thought above:
That will be a big problem for Obama’s reelection efforts. In 2008 it was a big deal to many people to take part in electing the first African American president, but that argument vanished on January 20. Taking part in assuring the first African American president gets an eight-year term doesn’t seem likely to pull as many voters, especially since his policies are now manifestly far to the left of the majority.
It’s ironic that the first black president got there via a form of affirmative action (as he did throughout his career). People who crow about his high approval ratings (which have nothing to do with his policies) forget that he only got 53% of the vote in a very Democratic year. Gerry Ferraro had it right–there’s no way someone with his thin resume would have been nominated if he’d been white.
I absolutely agree that this will be a big problem for his reelection (assuming he runs) in 2012. Of course, he might have a problem anyway, if he’s viewed as Jimmy Carter redux, on energy, fiscal policy and foreign policy. And that’s certainly the direction he’s headed.
On Airbreathing Propulsion
Long-time readers know that I am not a fan. I believe that the benefits of airbreathing for launch vehicles are overhyped, and the technical risk too high for anyone trying to develop cost-effective space transportation in the short term (i.e., private investors), when properly designed rockets can dramatically reduced launch costs without such technical risk. That doesn’t mean, of course, that it wouldn’t be useful for the government to do focused technology development in this area, which will help with non-space applications, as NACA did to support the aviation industry throughout the first half of the last century.
That said, John Bossard, a fan of such propulsion systems, has a thoughtful essay with which I largely agree, particularly this part:
In the final analysis, the argument about whether or not airbreathers have a place in launch vehicle systems becomes secondary to how we will approach launch vehicle development. Anyone who doubts whether free-market forces can do a better job that government elites in deciding what is the correct approach for something as relatively straightforward as launch vehicle development, need look no further than the current debacle of our home-mortgage industry, or our nationalized car companies. Perhaps no better example exists than to look at our current national launch vehicle concept, a concept chosen by a elite cadre of our nation’s finest aerospace technologists, and compare the success of that program with that of launch vehicles being developed by private companies.
I would claim that if we allow it, nay, if we demand it, we can let free-market forces decide what the right approach is, and whether airbreathing propulsion has a role in launch vehicle development. We can let all-comers try their hand. Let a plethora of concepts take to the field, and let free-market forces separate the winners from the losers. Cheer your champions! Raspberry your competition! But whatever you do, support the process, be an enabler of the free enterprise and entrepreneurism, and do what you can to make the field open to whoever has the fortitude to try.
If NASA will finally start being a good customer, and purchasing transportation services instead of engineering services, the market might finally be able to sort these issues out, even if decades later than it could have.
The Seven Types Of Employees
…that you meet at Best Buy. Well, we don’t have Circuit City to kick around any more…