Category Archives: Economics

Why They’re Not Hiring (Part 2)

More thoughts on this post from yesterday:

The flat truth is no one is going to hire new employees unless there is some reasonable promise that the additional cost of the employee will be recovered through increased profits resulting from the new employee’s work. That’s not “greed”, it is bare survival in tough economic times. And all the recent additions to per-employee costs aren’t alone. There is a seemingly endless well of new possible costs coming, including new environmental regulations, the possibility of a massive new “carbon tax”, and “card check” that promises to raise labor costs even further with exactly zero (at best) increase in productivity. Vague gestures towards a few thousand dollars of tax credits to stimulate job growth don’t even begin to cover the risks.

On top of it all, if you happen to be an oil worker on the Gulf Coast, your job is politically verboten. Sorry about that. Or not.

Only a crazy person would be eager to start large-scale hiring in this political environment. Yet many anti-corporation zealots profess themselves outraged that the Evil, Greedy Corporations won’t get with the business of economic recovery.

The country’s in the very best of hands.

Mike Griffin

…continues to defend the indefensible. Clark Lindsey has a response. Others have commented on this particularly bit of misleading the uninformed:

Griffin also suggested that the plan didn’t put much thought into the decision to defer a human return to the Moon in favor of a mission to a near Earth asteroid by 2025. The made that choice, he suggested, “apparently without realizing that the delta-V to get to almost all asteroids is higher than the delta-V to get to Mars” with similarly long travel times and limited launch windows. “In a number of ways reaching asteroids can be harder than reaching Mars.”

While I agree that it’s unlikely that much thought was put into the 2025 asteroid mission, this is disingenuous. No one said that we’re going to visit “almost all asteroids,” or even one in the main belt, so the velocity needed to get to “almost all asteroids” is irrelevant. All that really matters is the delta-V to get to the one that we choose, and there are many earth crossers with very low requirements.

On the subject of his comments about new technologies, I would expand on Clark’s critique. Mike says:

He was skeptical of the plan’s emphasis on “gamechanging” technologies to enable human space exploration. “Any time I develop a new technology I potentially change someone’s game,” he said. “Without a plan, I don’t know what game, I don’t know if it’s the game I ought to be changing, or if it’s a high-value game or a low-value game, but I’m going to change something, so it’s pretty easy to promise that I’ll do gamechanging technologies.”

He added that such technology development programs can be prime targets for future budget cuts, either by the Office of Management and Budget or in Congress. “The Congress surgically removes those programs and spreads the money to goals that they have in mind,” he claimed. “No congressman or senator ever gets credit for a technology program. Congressmen and senators get credit for projects.”

The first statement is simply gobbledygook (to be kind). It’s real simple, Mike. The plan is to explore the solar system with human beings. The current “game,” which you reinforced with Apollo on Steroids, deliberately eschewing the use of any new technology, is unaffordable and unsustainable, the complete opposite of what the Aldridge Commission recommended that the VSE must be. Any technology that dramatically reduces the development or operational cost, or increases the amount of activity that can be performed for a given cost, is a “game changer” and a high-value one. Deferring for now the development of heavy lifters and replacing them with propellant depots (as the Augustine panel members cited as a “game changer”) would be one example.

As for what congressmen or senators get “credit” for,” all he’s really saying is that unless it’s a big jobs program, it’s not politically sustainable. That is all the more reason to get the commercial people in the game as soon as possible, so that they can rely on things other than porcine motivations for continued space activity. And as the events of the past few months show, it’s clear that when the price per pound is astronomical, even pork can’t survive forever, even if it was accomplishing useful things toward the goal of opening up space, as Constellation was not. So given the choice between politically unsustainable hyperexpensive launchers and politically unsustainable useful new technologies, give me the technologies.

SpaceX

OK, several people have asked, in off-topic comments and email, about this announcement by SpaceX from last week, and wondering why I haven’t noted it.

Two reasons: first, a lot of it is in a piece I wrote for Popular Mechanics last week, and expected to run last week, and I didn’t want to step on the story here. Second, I didn’t think it was that big a piece of news. There’s little here that hasn’t been known for years to people who have been following the company and Elon’s plans. All it does is flesh out numbers on the thrust of the Merlin 2 and payload for the BFR.

As for whether I think that it is a challenge to my ongoing jihad against heavy lift, well, maybe. As I told Max Vozoff at lunch the other week, I’m not opposed to heavy lift in principle — I just think that it is unnecessary at the present time, and that it will be ghastly expensive if done using NASA legacy hardware and work force (and perhaps even ULA-legacy hardware, too, though that will be somewhat more affordable). If Elon can make it work economically, then more power to him, but I expect him to do it on a fixed-price contract that has to fairly compete with solutions not requiring it. For instance, if he wants to bid for propellant delivery, and thinks that he can beat the price at the depot of other bidders, go for it. I just don’t want the taxpayer to subsidize the development of what I consider an unneeded vehicle.

Better Late Than Never

Paul Krugman (inadvertently) explains to his moron readership why the CBO numbers for the health-care deform bill were bogus.

[Update a while later]

More on Paul Krugman’s ignorance (and by implication, that of anyone who pays any attention to him):

Last night, a few of us were discussing Paul Krugman’s apparent erroneous belief that Paul Ryan should have gotten the CBO to score the revenue side of his plan, but didn’t because he was attempting to put one over on the American people. As far as I know, scoring tax bills is still the job of the Joint Committee on Taxation, not the CBO–but no one bothered to blog it because, as far as I can tell, we all assumed that we must be misreading Paul Krugman.

But no, I didn’t misread; Krugman has two follow-up posts on the topic. It seems as if he’s really not aware that the JCT, not the CBO, typically handles the official scoring of tax legislation; “CBO” is not, in any of the policy circles I’ve run in, some sort of shorthand for the JCT (especially since there’s–ahem!–some rivalry there).

I haven’t read the work that got Krugman the Nobel prize, but those who have tell me he deserved it. I sure don’t know what he’s done since then that was worth a damn.

Well, Now We Know Why He Hired Her

Christina Romer says that we need a higher growth rate to reduce unemployment.

In related news, the Pope remains Catholic.

[Update a while later]

Good riddance, Christina Romer:

The ordinary function of government is to destroy talented people, but Romer’s epic failure has an additional element of tragedy. As an economist, Romer did an excellent job [pdf] of establishing that New Deal stimulus failed to end or seriously mitigate the Great Depression. As an Obama team player (and poignantly, a sunny supporter of the then-senator’s campaign), she made a 180-degree turn toward pro-stimulus hocus pocus. Romer will be remembered as the main advocate of the mythical “multiplier” phenomenon, in which every federal dollar spent producers more than 100 pennies worth of economic activity. This is the kind of economics you’d expect to hear from a fine arts major.

I wonder what she’ll say in the future? This reminds me of so many smart people who, after leaving NASA, say things like, “…how could I have made that decision”?

Housing Insanity

Megan McArdle:

If you want to know why us libertarian types are skeptical of the government’s ability to prevent housing market bubbles, well, I give you Exhibit 9,824: the government’s new $1000 down housing program.

No, really. The government has apparently decided, in its infinite wisdom, that what the American economy really needs is more homebuyers with no equity.

The country’s in the very best of hands.