Category Archives: Economics

Business, Economics, Political Commentary

It’s Not A Messaging Problem

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It’s an honesty problem:

Sixteen of the waivers, you won’t be surprised to learn, were granted to union-based plans, which confirms that the sleaze-addled bill became a sleaze-addled law. Why, after all, should a few chosen companies be granted dispensation while others subsidize them?

The administration argues that these waivers are necessary only until reform takes effect in 2014, at which time workers will enjoy a wide range of approved options. Now, clearly anyone gullible enough to believe that a giant, invasive regulatory scheme is going to spur competition and choice is already working for the administration. But even if we were to suspend our disbelief, how does any of that comport with the president’s claim that we can all keep our insurance if we like it? (Answer: not well.)

The president has a problem with a lot of his claims. And as long as he continues to delude himself that the problem is the dog-food ad, and not the dog food, he’s going to continue to decline in popularity.

Business, Economics, Political Commentary

The Coming Train Wreck

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…for commercial space. A warning from Wayne Hale:

NASA at its highest leadership level has committed to try to allow commercial space flight providers a great deal of flexibility and cost control. There are ways to do this which will not compromise safety in design or operation. But having NASA civil servants as the arbiters of whether or not thousands of requirements have been satisfied is not the way to accomplish neither safety nor cost efficiency.

So whether Commercial Space Flight gets $6 billion or $3 billion or $50 million, the entire effort is on the way to a train wreck.

NASA must change or this effort will fail.

No doubt. Part of the point of the new policy was to get NASA to change, but it’s going to be a very painful process, and there will be vicious guerilla warfare in the trenches. The draft requirements are just one of the skirmishes in that war. At some point, they will have to be revealed, to allow them to be properly critiqued before they become something more than draft. If NASA had a strong administrator, he would note that they will be signed off at the top, where the buck stops. But if NASA had a strong administrator, Ed Weiler wouldn’t still be in charge of SMD.

If the train wreck occurs, it will be NASA’s problem, though, not that of the commercial providers. There will be commercial human spaceflight, sooner or later. NASA can make it happen sooner, but they won’t be able to prevent it, and once everyone sees other people flying on SpaceX/ULA/Boeing/Whoever vehicles to Bigelow (and perhaps others’) facilities, it’s going to be impossible for NASA to get the billions some (either at NASA or on the Hill) will request for their own doomed programs, in the coming austere fiscal environment. There is only one way forward for human spaceflight, and that’s commercial providers.

[Update a few minutes later]

I should add that I am not surprised, of course, in any way by Wayne’s report.

Business, Economics, Media Criticism, Political Commentary

Bleeding And Purging

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…to balance the humors of the economy:

The Keynesian idea of stimulus has no empirical basis, but the only active tool the government has in a time of economic downturn is its ability to borrow and spend. Surprise, surprise: during the Great Depression, governments fell all over themselves to embrace Keynes’s idea of borrowing and spending to “stimulate” the economy. They did so not because it was proven to work (then or since) but because it justified the one action that would make the government larger and more powerful and the political class larger and more powerful as well.

The Fed is now doing the same thing with inflation “Quantitative Easing”. There is no particular reason to believe that inflating the money supply will produce more real economic activity, indeed the history of the 20th century proves exactly the opposite. However, it is all the Fed can do right now so it is going to grab a convenient theory to justify inflating the currency.

For centuries, doctors tortured and killed their patients because neither they nor their patients had the courage to simply admit that there was little good the doctors could do. They created elaborate and detailed theories to justify their counterproductive interventions. Worse, after a time, everyone, doctors, patients, philosophers, proto-scientists, etc. all came to regard the tool driven rationalizations as facts. Not until the discovery of the germ theory of disease, quantitative chemistry and a general science of diagnostics did the nonsense theory of humors fade away. The invention of new tools drove the development of new, scientific theories.

We are doing the same damn thing with the current economic travails. Rather than admit there is little that the government can do to correct its colossal real-estate screwup, we get to witness the economic equivalent of bleeding and induced vomiting all based on a economic theories that have no other reason for existing that to justify the government bleeding and inducing vomiting in the economy.

“… but it’s what can be done,” could well be one of the most dangerous phrases in the English language. In very many cases, not just economics, the best thing to do is nothing. For any particular bad circumstance, there are near infinite number of actions that can make the circumstance worse but only a very few that can make it better. Indeed, there is no natural law that says that every circumstance can be improved with the capabilities at hand. Sometimes a “can do spirit” backfires. Some circumstances are like earthquakes or tornadoes: you can’t stop them, you just have to ride them out.

Don’t just do something; stand there.