Economics

False Security from PPP Recalculation

Rand’s analysis of the restatement of the purchasing power parity (PPP) calculation for China is incomplete. As I’ve pointed out before, the revised 2006 PPP calculation with the economy measured at PPP nearly three times instead of four times as large as at official exchange rates still leaves China with a $2.5 trillion dollar economy (2006) at official exchange rates and $6 trillion if you consider most of what we and the Chinese buy is cheaper in dollars to buy in China than it is in the US. The relevant numbers for long term strategic security are the industrial production growth rate (from the CIA World Factbook on Intelligence) at 22%/year, the labor force of 800 million of which 45% do agriculture (2005) versus less than 1% for the US and the 11%/year real growth rate.

This indicates that China has a lot of head room as its agricultural sector mechanizes and rationalizes farm size. It has a lot of head room because per capita GDP is either $1,900/year at official exchange rates or $4,500/year at PPP. At 8% faster GDP growth than the US, it will catch us in 10 years in PPP or by 2030 at the official exchange rate. At that point it will still have substantial headroom to grow for another decade much faster than the US because per capita GDP at that point will only be 1/4 the US per capita GDP.

Like finding out that Iran doesn’t want a bomb, this new statistic is a red herring. China is still on the rise. It’s vainglory to hope they just topple themselves like Russia. Just because Iran doesn’t want a bomb (if it doesn’t) it still has a nuclear program and could have one if it wanted in a quite short period of time. Just because we recalculated the statistics to show that China has a smaller economy, it is still growing fast and with the revised calculations rates likely to grow even faster.

I am sure that single-party government will be a drag on China, but they can still field a super power’s worth of hardware once they exceed our GDP. It may take them a while once they are spending as much as the US is on defense to catch up to our technology level, but a tech advantage is not always decisive. Especially if they start outspending us 2 to 1 a decade later while their per-capita GDP is still half of ours.

Space

The Great Fall Of China

Or…Honey, I shrunk the economy!

China’s GDP is forty percent smaller than previously assumed. Walter Russell Meade considers the implications.

One that he doesn’t point out is the hysteria by some (including the NASA administrator, except that in his case I suspect that it’s just a cynical attempt to scare Congress into giving him more money for “Apollo on steroids”) that they will beat us back to the moon is even less justified than it was at the higher number.

China not only has a much smaller economy than ours after the PPP recalculation, but it has a much smaller economy per capita, since their population is over four times ours (resulting in average per capita income of about an eighth of ours), with a much smaller middle class. That means that the Chinese peasants, the vast majority of whom are still in poverty by US standards, are likely to be even less happy about boondoggles to the moon than we are.

And as Meade points out, the government is not sufficiently stable to risk the popular uproar that might be engendered by large numbers of people who are unhappy to see their national wealth spent to send a few taikonauts off to Luna, while they continue to have no running water. I expect the Chinese program to continue at its current snail’s pace, but to think that they will beat us back to the moon any time soon, or at all, remains a fantasy.

[Via Instapundit]

Education

The Real Debate

Perry de Havilland discusses the real issue in the creation-evolution wars, that never gets discussed, because it’s taken as a given that the government will fund education:

I have no problem with people believing whatever wacko things they want (and for me that includes all religion), but the evolution vs. creationism debate should be a non political one and the only way that can ever be true is when the state is no longer involved in education.

I think creationism is nuts and it makes me think less of Ron Paul that he has a religious objection to the theory of evolution. But frankly this should not be a matter for political concern and he at least is highly unlikely to force state schools to teach it (or anything else for that matter). The fact that it is a political matter shows something it very wrong and the correct ‘something’ that needs debating is not evolution, it is state schooling. Return all schooling to the private sector and the whole issue goes away from the political sphere. Let the market decide if there is demand for schools that teach creationism, I have no problem with that at all.

Nor do I.

Political Commentary

Clinton vs. Giuliani

Intrade shows Clinton trading at about $0.67 on the dollar for winning the democratic nomination despite trailing Obama for winning Iowa and South Carolina primaries. Giuliani is leading trading at about $0.30 on the dollar for winning the republican nomination despite being behind in NH, IA, MI and SC.

Space

Nuclear Battery

Business Week reports on a nuclear electric battery (more like a reactor) that has 27 MW for 5 years worth of juice and it’s “the size of a hot tub”. It’s patent pending (20040062340; search for “uranium hydride over at USPTO.gov). That’s about 64 cubic feet. That’s 1.2 terrawatt hours or 1.2 billion kwh. They say it’s 70% cheaper than natural gas–maybe $30 million? If it’s 54 cubic feet and pure uranium hydride (a high overestimate), it would weigh about 15 tons. Compare that with 15 tons of LOX and hydrogen with 66,000 kwh at 39 kwh per kg of hydrogen. Pretty good ISP. Thrust to weight not so good. Combine it with a reaction mass fill up on Mars?

Political Commentary

Where Did The “Neocons” Go?

Michael Young is wondering:

…maybe it’s time to stop referring to the neocon policies of the Bush administration. The neocons are gone, many for so long that no one seems to remember their leaving. What we now have in Washington is a mishmash of old political realism and improvisation, topped with increasingly empty oratory on freedom and democracy. That should please quite a few of Bush’s domestic critics. He’s returned to the futile routine in the Middle East that they always urged him to.

Well, the anti-war folks are always fighting the last anti-war.

Political Commentary

Where Did The “Neocons” Go?

Michael Young is wondering:

…maybe it’s time to stop referring to the neocon policies of the Bush administration. The neocons are gone, many for so long that no one seems to remember their leaving. What we now have in Washington is a mishmash of old political realism and improvisation, topped with increasingly empty oratory on freedom and democracy. That should please quite a few of Bush’s domestic critics. He’s returned to the futile routine in the Middle East that they always urged him to.

Well, the anti-war folks are always fighting the last anti-war.

Biting Commentary about Infinity…and Beyond!