Category Archives: Economics

Obama’s Versus Trump’s Economy

I distinctly recall in the fall of 2008, as an Obama win seemed likely, if not inevitable, that there was a lot of talk about small-business people planning to end investment, pull in their horns, and wait for the coming economic storm to blow over, which greatly contributed to the contraction, and the worst recovery since the end of the war. But I’m having trouble finding anything on line about it. Do others remember that, and have any links to anything?

I ask, because I suspect that the promise of an end to many of the punishing regulations is going to pull a lot of that money back into the economy (particularly if it can be repatriated without being confiscated).

Fixing My Own Stuff

I think that this comment on my furnace problems is worth elaborating on:

If you blow yourself up trying to save a few bucks by not hiring someone to do this for you, I don’t want to hear any complaints! Good luck.

It’s not (just) about “saving a few bucks.”

I come from a line of people on my mother’s side who would never think to call someone to fix something that had an obvious solution, and the tools/knowledge to do it. In fact, during the Depression, my grandfather was the guy who got called, doing auto repairs. But he also built his own cabin in northern Michigan on the Muskegon River, and built by hand inboard-motor boats to put in the river, by steaming and bending mahogany, and adapting Chrysler drive trains to put in them, including dashboard instruments. He built them in the basement in northern Flint, and knocked out the wall to get them out when they were complete and ready to be trailered Up North.

My uncle (his son) followed in his footsteps, except that he actually got a college degree (ME from Michigan), and he always (at least until late in life), though he was a well-paid engineering manager at AC Spark Plug, rebuilt his own car engines (back in the days when this had to be done every hundred-thousand miles or so), and his own plumbing and electrical work and drywall (at least after he retired).

My first car, at sixteen, was a used MGA. That summer, I tore it apart and put it back together, to improve the performance and end the blue smoke of the burning oil coming out of the tailpipe, and get smoother gear shifting with new synchros. Before I went to college, I was a professional VW mechanic. I’m just not by nature someone who likes to pay people (and in many cases, trust them) to do things that I think I can do better and cheaper myself. When I was in Florida in May, starting to prepare the house to sell, I got a quote of $500 to replace a leaking hose bib, which involved opening up a block wall, sweating in new copper pipe, then resealing and repainting it. I did the whole job in a couple hours after fifty bucks in tools and parts at Home Depot.

A few weeks ago we had a water leak in the main supply line coming into the house that had the meter swirling like a dervish. We did call a plumber, but a thousand dollars later, while they did a good job (I watched), I regretted not doing it myself. All it would have taken was renting a jack hammer to open up the sidewalk, digging some dirt, cutting out the bad pipe and replacing it, reburying, and replacing the pavement.

Anyway, I assumed that when a furnace failed suddenly, it was likely something simple. I read the service manual, tracked down the problem to an obviously failed igniter, and changed it myself. I have pride in my own ability, and a larger bank account.

McDowell County, WV

Why don’t they leave?

That question is actually surprisingly easy to answer: They did. After all, 80 percent of McDowell’s population, including my grandparents, cleared out of the county to seek opportunities elsewhere during the last half-century.

But as the mines mechanized and closed down, why didn’t the rest go, too? Reed, Whitt, and Slagle all more or less agree that many folks in McDowell are being bribed by government handouts to stay put and to stay poor. Drug use is the result of the demoralization that follows.

In a Fall 2014 National Affairs article called “Moving to Work,” R Street Institute analysts Eli Lehrer and Lori Sanders asked, “What is keeping the poor from moving their families to new places to take advantage of better opportunities?” They argue that “the answer lies primarily in the structure of poverty-relief programs.” In other words, the government is paying people to be poor.

Yes.

Macbook And IPhone Upgrades

aren’t what they used to be:

For the first time in my life, I decided to sit out an upgrade cycle and buy the older model, now being sold at a discount like day-old bread.

I won’t say that the discount played no role in my decision. But in previous years, I’d have swallowed hard and handed over the money, because I am, in the laptop world, a hardcore power user. I game on my laptop. I frequently have a dozen or so applications open, two or three of which are browsers with many tabs open. Faster processors, more memory — these things are sufficiently valuable that I’m willing to pay for them, because they make me more productive.

The trouble is, the upgrade cycle is no longer delivering those things. The processors in the latest model were marginally faster than in the previous one, but you couldn’t add memory, which I needed more. Instead, Apple is focusing on things I care about a lot less, like making the laptop thin — even though that meant losing USB and SD card ports that I still use, and losing a lot of “play” from the keyboard. As a friend pointed out to me, Apple has become obsessed with thinness to the point of anorexia.

But my decision is not primarily evidence of Apple making poor design decisions. Instead, it’s a lesson in the limits of the form — and the way that’s affecting upgrade cycles, and very probably, Apple’s future revenue.

…My 4.5 years is actually on the low side for replacing a computer; the average now is nearly six years, which of course means that a substantial number of users are waiting longer than that. For replacing mobile devices, too, consumers are waiting longer, in part because phone companies are no longer subsidizing the phones to get you to invest in a contract, but also, I suspect, because devices are just not getting better as fast as they once were. We used to upgrade our phones every two years because the new operating systems ran on old phones as if they’d been given high doses of valium. Now we’ll wait until the batteries won’t hold a charge — and if it were possible to replace the batteries, we might wait even longer than that, because I’m not willing to pay hundreds of dollars to get a better camera while losing my headphone jack.

I replaced my slider Droid 2 Global a couple years ago, when it started to flake out, with a used Droid 4, because it was the newest phone in which I could still get a mechanical keyboard. The Droid 2 could do a battery swap in ten seconds; Motorola says not to replace the battery in the 4, but it was on its last legs when I bought it, and they could be purchased at Amazon, and didn’t really require any special tools other than a #5 Torx driver, so now the battery is fine. I don’t know when I’ll upgrade the phone, but then, I only use it when traveling, because I hate cell phones in general, and work at home with a land line, that they’ll take away from my cold dead fingers.

And I’ll stick to my desktop for now as well. I buy a cheap laptop for traveling, but to the degree I’m a power user, I prefer to have something easy/cheap to upgrade (I’ll probably double my RAM to 32G for Christmas). My next laptop, which may come soon, because mine is starting to have problems (occasional non-responsive keys, and lines in the display) will probably be a foldable two in one, that will be much easier to use on a plane.

As she says, it is a problem with marginal utility as we approach the end of Moore’s law, and the limits of the physical human interface.

But it’s not just that. I’ve never used Apple products, and things like this insane obsession with “thin” to the exclusion of all else is one of the reasons. My sense is that Apple’s response to consumer demand is similar to Twitter’s:

“Hey, we’re going to improve the product!”

“Great, want to know what we want?”

“Absolutely not.”

The Global Warming Movement

Is it on the verge of collapse?

We can only hope so.

[Afternoon update]

The latest climate conspiracy theory. Tough words from Professor Curry:

Get over it, your side lost. Changes of Presidential administrations occur every 4 or 8 years, often with changes in political parties.

Get busy and shore up your scientific arguments; I suspect that argument from consensus won’t sway many minds in the Trump administration.

Overt activism and climate policy advocacy by climate scientists will not help your ’cause’; leave such advocacy to the environmental groups.

Behave like a scientist, and don’t build elaborate conspiracy theories based on conflicting signals from the Trump administration. Stop embarrassing yourselves; wait for the evidence.

Be flexible; if funding priorities change, and you desire federal research funding, work on different problems. The days of needing to sell all research in terms of AGW are arguably over.

I repeat: We can only hope so. But “behave like a scientist” seems to be beyond many of them.

Where Is Trump Getting His Cabinet Picks?

Surprisingly (at least to me), he’s poaching Galt’s Gulch.

[Wednesday-morning update]

Robert Tracinski (who actually is an Objectivist) isn’t impressed:

The problem is that Hohmann is trying to fit the Rand angle into a narrative about the supreme awfulness of the supremely awful Trump administration. “The fact that all of these men, so late in life, are such fans of works that celebrate individuals who consistently put themselves before others is therefore deeply revealing. They will now run our government.” Are you frightened now? Because I’m pretty sure you’re supposed to be frightened.

Hohmann would have been better served by asking what these business leaders took from Rand as the message that inspired them. Again, there are a few hints. Puzder says that it’s about encouraging his kids to live “the kind of lives of achievement, integrity, and independence that Rand celebrated in her novels.” Congressman Mike Pompeo (referred to in the article) explained that Rand’s impact was because, “I spent my whole life working hard,” a virtue her novels promoted, and because, “I eat and breathe small government and freedom.”

Oh, no! Important figures in the new administration have been influenced by an author who advocated freedom. And integrity. Does that perhaps sound a little less frightening?

It does to people who hate those things.

Bootstrapping The Solar System

A new paper:

Advances in robotics and additive manufacturing have become game-changing for the prospects of space industry. It has become feasible to bootstrap a self-sustaining, self-expanding industry at reasonably low cost. Simple modeling was developed to identify the main parameters of successful bootstrapping. This indicates that bootstrapping can be achieved with as little as 12 metric tons (MT) landed on the Moon during a period of about 20 years. The equipment will be teleoperated and then transitioned to full autonomy so the industry can spread to the asteroid belt and beyond. The strategy begins with a sub-replicating system and evolves it toward full self-sustainability (full closure) via an in situ technology spiral. The industry grows exponentially due to the free real estate, energy, and material resources of space. The mass of industrial assets at the end of bootstrapping will be 156 MT with 60 humanoid robots, or as high as 40,000 MT with as many as 100,000 humanoid robots if faster manufacturing is supported by launching a total of 41 MT to the Moon. Within another few decades with no further investment, it can have millions of times the industrial capacity of the United States. Modeling over wide parameter ranges indicates this is reasonable, but further analysis is needed. This industry promises to revolutionize the human condition.

Looks interesting. I remember talks like this at the Princeton conferences 35 years ago. It’s technology is finally starting to evolve to allow it to happen.

Related: Carlos Entrena Utrilla has started a series of descriptions of the coming cislunar economy.

[Update a few minutes later]

Sorry for missing link on Carlos’s piece, fixed now.

The Racist Roots Of “Progressivism”

Virginia Postrel:

In the early 20th century, most progressives viewed as cutting-edge science what today looks like simple bigotry. “Eugenics and race science were not pseudosciences in the Gilded Age and Progressive Era,” Leonard emphasizes. “They were sciences,” supported by research laboratories and scholarly journals and promoted by professors at the country’s most prestigious universities.

While some socialists and conservatives also embraced them, Leonard argues, eugenics and scientific racism fit particularly well with progressive thought: “Eugenics was anti-individualistic; it promised efficiency; it required expertise, and it was founded on the authority of science.” Equally important, “biological ideas,” Leonard writes, gave progressive reformers “a conceptual scheme capable of accommodating the great contradiction at the heart of Progressive Era reform — its view of the poor as victims deserving state uplift and as threats requiring state restraint.” They could feel sorry for impoverished Americans while trying to restrict their influence and limit their numbers.

Know what else is “founded on the authority of science”? The war on the fossil-fuel industry, and the desire to control all aspects of our lives in the name of “saving the planet.”

In addition to restricting immigration, throwing people out of work with a minimum wage, and keeping blacks and other inferiors out of the job market, she could have also pointed out that gun control (another “progressive” idea) was traditionally intended to keep those inferior disarmed.

And nothing has changed. Accusations of “racism” against actual liberals by “progressives” remain, as with accusations of “hate,” and “violence,” and “ignorance,” psychological projection.

[Update a few minutes later]

How to get “progressive” students to understand the minimum wage:

When I get to the words “parasites,” I am aware that my tone of voice and demeanor are showing signs of disgust. They are disgusting sentiments, not easily read aloud to a classroom of students.

I think this is useful pedagogically for several reasons. First, it teaches students in political economy to carefully distinguish positive analysis from normative evaluation. By building this in early in the course, I find it easier to teach more difficult concepts like Coase and externalities. Second, it poses a striking challenge to students’ priors that good intentions lead to good policy. I use the opportunity to emphasize that economists judge policies by their outcomes, not the intentions behind them. Third, the example demonstrates the value of knowing something about the history of ideas and economic thought. It enriches their knowledge of both of the historical and contemporary debates and they remember it (I think). Fourth, the discussion invites a consideration of what values, views, and policies are consistent with their own normative positions. And finally, it is a powerful illustration of how ideas have consequences.

Yes. I wish that more teachers did this. But of course, too many of them are “progressives.”

The Abandoned Frontier

Mark Steyn reflects on the passing of John Glenn. I don’t agree entirely, and I think he misses some key points, one of which was that Apollo was a battle in the Cold War that didn’t have much to do with space. With regard to Charlton, anyone who thinks we’re in technological decline, and unable to do great things any more hasn’t been paying attention to what’s been happening in microelectronics, microbiology, and yes, spaceflight. I’d suggest that Mark read my recent essay on the need to get over Apolloism.

[Update a while later]

Henry Vanderbilt weighs in over at Arocket:

Apollo was amazing, yes. But it did things the brute-force, massively-expensive way. Just look at the size of a Saturn 5 ready for liftoff, versus how much came back. Multiply that by the size of the payroll for the hundreds of thousands building and operating it, spread over a handful of missions a year. That’s a lot of expensive aerospace talent and hardware spent on every mission – billions worth.

Of course, they had no choice but to do it that way. They had an urgent national goal, a tight deadline, an effectively unlimited budget – and a 1962 technology base. One example: The computer that flew a Saturn 5 weighed as much as a small car – and was less powerful than the chips we put in toasters.

Two things happened after Apollo, one immediately bad, one eventually good.

The bad thing is that in the seventies, bureaucrats took over, and did what bureaucrats do: They carved into stone doing things the Apollo way. Shuttle resulted: gorgeous, yes, but only somewhat less expendable and slightly less labor-intensive than Saturn 5. And, alas, somewhat more fragile.

For decades this bureaucracy defended their billions-per-mission turf and defeated all efforts to do things less expensively. (In fact it’s still trying, with a MANY-billions-per-mission bastard offspring of Shuttle and Saturn 5 called “Space Launch System”.)

But the other thing that happened is, back in the eighties a few of us saw this bureaucratic logjam forming, and looked into whether space really had to cost billions per mission. We concluded it didn’t. We began pushing the different approaches it’d take to get costs down to where all the useful things we might do in space begin to be affordable.

It took a lot longer than we hoped getting into this. But thirty years later, commercial space companies are doing things at a tenth of traditional NASA costs. And that’s even before the really radical new technologies kick in, like the reusable flyback boosters just entering test in the last couple of years.

I won’t defend the wasted decades. (It wasn’t us wasting them, though at a number of points we could have been less naive about how ruthlessly the bureaucrats would defend their turf.)

But at this point, despair over the wasted decades is obsolete. Costs are coming down fast, huge possibilities are opening up. We could still blow it, yes. But compared to even just five or ten years ago, right now the future’s so bright I gotta wear shades.

Henry Vanderbilt
Space Access Society
(founded in 1992 with the intent of being no longer needed and disposed of in five years. yeah well.)

As I said on the Space Show the other week, the future for human spaceflight has never been more exciting.