…versus the Tea Partiers’ culture of independence. It’s not (just) about the taxes. It’s about the spending, and the perverse incentives built into the system. And as Michael Barone points out, the Susan Roesgens of the world don’t understand that.
Category Archives: Economics
Want A VAT?
Sure thing. Right after you repeal the Sixteenth Amendment. I personally consider that a necessary, but not necessarily sufficient condition.
IBD Weighs In On Space
Cluelessly, as with many:
Some would argue that in times of budget problems a robust space program is an unnecessary expense and that if we can’t cut there, where can we cut?
We aren’t cutting. The budget is increasing, and in particular it is increasing for things that we actually need to get beyond low earth orbit, which Mike Griffin’s NASA had eliminated funding for to pay for his expensive and unneeded new rocket.
“We’ve got to do it in a smart way,” Obama said, apparently preferring to pay the Russians $56 million a pop to send Americans to fix toilets on the International Space Station.
No, that’s not what he was referring to. That was the George Bush plan, in case you’ve been asleep for the past six years. It’s too late to fix that in the near term, but at least we now have hope of fixing it a lot sooner, for a lot less money, than Ares would have provided.
Why do all of these supposed free marketeers bash private enterprise when it comes to space?
[Update a couple minutes later]
Speaking of which, Falcon 9 is almost ready to launch.
Elon’s Position
He’s all in favor, natch:
By the time President Obama cancelled Ares I/Orion earlier this year, the schedule had already slipped five years to 2017 and completing development would have required another $50 billion. Moreover, the cost per flight, inclusive of overhead, was estimated to be at least $1.5 billion compared to the $1 billion of Shuttle, despite carrying only four people to Shuttle’s seven and almost no cargo.
The President quite reasonably concluded that spending $50 billion to develop a vehicle that would cost 50% more to operate, but carry 50% less payload was perhaps not the best possible use of funds.
I fail to see how anyone can come to any other conclusion. Instead, the Ares huggers just ignore the cost issue, and pretend it doesn’t exist.
So What About The Jobs?
I got an email today, that I thought I’d just publish:
People don’t seem to be to sympathetic to the workers who will lose their jobs with the loss of the shuttle and Constellation. If I understand you correctly, neither program should be continued just for jobs. I tend to agree with that, however, what should be done to help the people who will lose their jobs?
It would be interesting to know more about the employment situation, what type of jobs will be lost, how easy or hard it will be for workers to find new jobs, and if the government has any ideas on helping these people find work.
Do you think that there will be skilled workers who will now start their own space related companies?
Any insights would be appreciated.
Others may have better insight than I. But I would note that generally, if some event results in a loss of jobs in an area with a jobs shortage, people tend to have to move. It’s a very tough time for those losing NASA-related jobs, because it’s a tough job market out there. On the other hand, a lot of people are hurting, and might even resent the notion that there’s something special about space jobs that those losing them should get special treatment.
This may in fact have been an historical high-water mark for space-related Brevard County employment, and the end of a half-century era, when the region boomed due to a fortunate happenstance of geography. But the fundamental problem of space is the high cost of access to it. And in principle, if not practice, the purpose of NASA spending should not be job creation, but wealth or knowledge creation. If we are to reduce the costs of space transportation, we need to either reduce the number of people who work on it (because their paychecks and benefits are where the vast majority of those costs come from) or dramatically increase their productivity. Neither Shuttle or Constellation offered any prospects for doing that. Commercial might, in the longer run, but it’s not going to do anything to help the current NASA work force.
And if we develop the kinds of vehicles that we need for true significant cost reduction (fully reusable), there’s nothing magic about the Cape, in terms of launch location. So I don’t expect to ever see the levels of space employment there again that we saw from the Cold-War-legacy program. That’s a reality with which the local officials are simply going to have to come to grips.
An Angel Killer
Rick Tumlinson says that’s what Chris Dodd’s proposed financial legislation is. And it’s not a problem just for space startups — this could put an end to Silicon Valley as we know it. For those who aren’t Obama worshippers, as Rick is (and I mean that in the nicest possible way), you might want to skip the first graf — it doesn’t really contribute much to the main point.
Backlash
Are Californians on the verge of undoing the idiotic and disastrous energy law?
A coalition of businesses, financed largely by three Texas oil companies, is funding a ballot petition that would delay the law until California’s current unemployment rate is cut by more than half.
Leading Republican gubernatorial candidate Meg Whitman has vowed she would suspend the law on her first day in office, which she would have the authority to do.
Even Schwarzenegger, who has staked his legacy on environmental issues, has begun urging air regulators to take a go-slow approach. But he has vowed to fight the ballot initiative.
The possibility that a state that has set the national agenda on environmental change for decades might shelve its highly publicized climate regulations could have ramifications beyond California’s borders. In Congress, lawmakers are struggling to craft a national climate bill that uses California’s as a template, but are facing headwinds of their own.
“This could very well be an effort to focus on California with the goal of delaying federal legislation,” said state Sen. Fran Pavley, D-Agoura Hills, one of the law’s authors.
While it might have that great side effect, no, it’s an effort to focus on the insanity that has been coming out of Sacramento for years that’s been destroying the California economy and chasing productive individuals and businesses out of the state.
Even if you believe in AGW, this law never made any sense. It would have a negligible effect on global CO2 emissions, while putting the state economy, once larger than that of most countries, at a competitive disadvantage with not only all the other states, but much of the world. Texas has been laughing at us, and with great justification.
I can’t wait to see the end of the governator. The best that can be said about him at this point was the best that could be said of him at the time he was first elected — he wasn’t Gray Davis.
ObamaCare Will Reduce The Deficit
Tom Blumer explains why anyone who really believes this is a fiscal fool, or a Democrat. But I repeat myself.
The Second-Order Knowledge Problem
…or why people like Henry Waxman, who think they can run the economy, are ignorant fools:
“What AT&T, Caterpillar, et al did was appropriate. It’s earnings season, and they offered guidance about , um, their earnings.”So once Obamacare passed, massive corporate write-downs were inevitable.
They were also bad publicity for Obamacare, and they seem to have come as an unpleasant shock to House Energy and Commerce Committee Chairman Rep. Henry Waxman, D-Calif., who immediately scheduled congressional hearings for April 21, demanding that the chief executive officers of AT&T, John Deere, and Caterpillar, among others, come and explain themselves.
Obamacare was supposed to provide unicorns and rainbows: How can it possibly be hurting companies and killing jobs? Surely there’s some sort of Republican conspiracy going on here!
More like a confederacy of dunces. Waxman and his colleagues in Congress can’t possibly understand the health care market well enough to fix it. But what’s more striking is that Waxman’s outraged reaction revealed that they don’t even understand their own area of responsibility – regulation — well enough to predict the effect of changes in legislation.
In drafting the Obamacare bill they tried to time things for maximum political advantage, only to be tripped up by the complexities of the regulatory environment they had already created. It’s like a second-order Knowledge Problem.
Possibly this is simply because Waxman and his colleagues are dumb, and God knows there’s plenty of evidence that Congress isn’t a repository of rocket scientists. But it’s just as likely that adding 30 or 40 IQ points to the average congressman wouldn’t make much difference.
Well, they might at least be smart enough to know what they don’t know. You know, when the president claimed that he’d read Hayek? I don’t believe him. Or if he did, he didn’t read for comprehension.
I also think that they outsmarted themselves, and it’s going to justly bite them in their collective keister this fall. Outsmarting them is no big feat of course. Except for them.
[Sunday night update]
Over at Cato, David Boaz has further thoughts. And they’re a lot more intelligent (as usual) than commenter “Jim”‘s.
HC Follow Up
I made a mistake in titling this post. It seems to be drawing spammers like flies to honey. So I’m closing down comments on it, and setting this new post up for follow ups.