Category: Government

SpaceX Is the Wikipedia of Space: Launch Quickly and Upgrade Quickly

SpaceX has a Wikipedia approach to space. Launch quickly; correct and upgrade quickly. This is similar to Google’s approach to hard drives: buy cheap, unreliable ones, have a lot of backups, and be ready to replace a lot of hard drives. Also the ethernet’s approach to packets: be ready to lose them and re-send. I argue these examples illustrate redundancy, and that we can and should have a robustly redundant labor market.

(p. B1) The Starlink project, owned by Mr. Musk’s Space Exploration Technologies Corp. or SpaceX, is authorized to send some 12,000 satellites into orbit to beam superfast internet to every corner of the Earth. It has sought permission for another 30,000.

Now, rival companies such as Viasat Inc., OneWeb Global Ltd., Hughes Network Systems and Boeing Co. are challenging Starlink’s space race in front of regulators in the U.S. and Europe. Some complain that Mr. Musk’s satellites are blocking their own devices’ signals and have physically endangered their fleets.

. . .

The critics’ main argument is that Mr. Musk’s launch-first, upgrade-later principle, which made his Tesla Inc. TSLA +1.27% electric car company a pioneer, gives priority to speed over quality, filling Earth’s already crowded orbit with satellites that may need fixing after they launch.

“SpaceX has a gung-ho approach to space,” said Chris McLaughlin, government affairs chief for rival OneWeb. “Every one of our satellites is like a Ford Focus—it does the same thing, it gets tested, it works—while Starlink satellites are like Teslas: They launch them and then they have to upgrade and fix them, or even replace them alto-(p. B2)gether,” Mr. McLaughlin said.

For the full story, see:

Bojan Pancevski. “Rivals of SpaceX’s Satellites Cite Risk.” The Wall Street Journal (Tuesday, April 20, 2021): B1 & B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 19, 2021, and has the title “Elon Musk’s Satellite Internet Project Is Too Risky, Rivals Say.”)

“As a Species, We’re Very Good At Adapting”

(p. A11) Barack Obama is one of many who have declared an “epistemological crisis,” in which our society is losing its handle on something called truth.

Thus an interesting experiment will be his and other Democrats’ response to a book by Steven Koonin, who was chief scientist of the Obama Energy Department. Mr. Koonin argues not against current climate science but that what the media and politicians and activists say about climate science has drifted so far out of touch with the actual science as to be absurdly, demonstrably false.

. . .

Mr. Koonin still has a lot of Brooklyn in him: a robust laugh, a gift for expression and for cutting to the heart of any matter. His thoughts seem to be governed by an all-embracing realism. Hence the book coming out next month, “Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters.”

Any reader would benefit from its deft, lucid tour of climate science, the best I’ve seen. His rigorous parsing of the evidence will have you questioning the political class’s compulsion to manufacture certainty where certainty doesn’t exist. You will come to doubt the usefulness of centurylong forecasts claiming to know how 1% shifts in variables will affect a global climate that we don’t understand with anything resembling 1% precision.

. . .

Mr. Koonin is a practitioner and fan of computer modeling. “There are situations where models do a wonderful job. Nuclear weapons, when we model them because we don’t test them anymore. And when Boeing builds an airplane, they will model the heck out of it before they bend any metal.”

“But these are much more controlled, engineered situations,” he adds, “whereas the climate is a natural phenomenon. It’s going to do whatever it’s going to do. And it’s hard to observe. You need long, precise observations to understand its natural variability and how it responds to external influences.”

Yet these models supply most of our insight into how the weather might change when emissions raise the atmosphere’s CO2 component from 0.028% in preindustrial times to 0.056% later in this century. “I’ve been building models and watching others build models for 45 years,” he says. Climate models “are not to the standard you would trust your life to or even your trillions of dollars to.”

. . .

Let technology and markets work at their own pace. The climate might continue to change, at a pace that’s hard to perceive, but societies will adapt. “As a species, we’re very good at adapting.”

. . .

. . . , the mainstream climate community will try to ignore his book, even as his publicists work the TV bookers in hopes of making a splash. Then Mr. Koonin knows will come the avalanche of name-calling that befalls anybody trying to inject some practical nuance into political discussions of climate.

He adds with a laugh: “My married daughter is happy that she’s got a different last name.”

For the full interview, see:

Holman W. Jenkins, Jr., interviewer. “How a Physicist Became a Climate Truth Teller.” The Wall Street Journal (Saturday, April 17, 2021): A11.

(Note: ellipses added.)

(Note: the online version of the interview has the date April 16, 2021, and has the title “Mr. Humble and Dr. Butcher’ Review: A Heart in the Right Place.”)

Koonin’s climate book, discussed in the interview quoted above, is:

Koonin, Steven E. Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters. Dallas, TX: BenBella Books, 2021.

Mundell Thought Low Taxes Nourish Entrepreneurs

(p. B11) Robert A. Mundell, a Nobel Prize-winning economist whose theorizing opened the door to understanding the workings of global finance and the modern-day international economy, while his more iconoclastic views on economic policy fostered the creation of the euro and the adoption of the tax-cutting approach known as supply-side economics, died on Sunday [April 4, 2021] at his home, a Renaissance-era palazzo that he and his wife restored, near Siena, Italy.

. . .

. . . he provided intellectual grounding for lowering the top tax rates on the rich, whose advocates rallied under the banner of supply-side economics and won over many right-leaning politicians and policymakers in the United States, Britain and elsewhere while drawing the scorn of more progressive economists, who disputed the notion that cutting taxes for the wealthy was the best way to spur economic growth.

“Supply-side economics made the argument that steeply progressive tax rates reduced the size of the pie to be distributed,” Professor Mundell said in a 2006 interview with the American Economic Association. “The poor might be better off with a smaller share of a larger pie than with a larger share of a small pie.”

To encourage a growing economy, he argued for keeping the maximum tax rate under 25 percent. “The stimulus and rewards of the entrepreneurial group must be fed and nourished,” he said in a 1986 interview.

His ideas were promoted with evangelical fervor in the 1970s particularly by Arthur Laffer, an economist who became known for the “Laffer curve,” postulating that lower tax rates would generate higher government revenues, and Jude Wanniski, an editorial writer for The Wall Street Journal, whose opinion pages took up Professor Mundell’s cause after a series of lunches and dinners at a Lower Manhattan restaurant, Michaels 1, which were later described by Robert Bartley, The Journal’s opinion editor, in his book “The Seven Fat Years” (1992).

For the full obituary, see:

Tom Redburn. “Robert Mundell, a Father of the Euro and Reaganomics, Dies at 88.” The New York Times (Tuesday, April 6, 2021): B11.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the obituary was updated April 6, 2021, and has the title “Robert A. Mundell, a Father of the Euro and Reaganomics, Dies at 88.”)

The book by Bartley mentioned above is:

Bartley, Robert L. The Seven Fat Years: And How to Do It Again. New York: Free Press, 1992.

The Wealthy Benefit More from Lower Corporate Tax Rates than from Lower Income Tax Rates

(p. A18) The main cause of the radical decline in tax rates for very wealthy Americans over the past 75 years isn’t the one that many people would guess. It’s not about lower income taxes (though they certainly play a role), and it’s not about lower estate taxes (though they matter too).

The biggest tax boon for the wealthy has been the sharp fall in the corporate tax rate.

. . .

Since the mid-20th century, however, politicians of both political parties have supported cuts in the corporate-tax rate, often under intense lobbying from corporate America. The cuts have been so large — including in President Donald Trump’s 2017 tax overhaul — that at least 55 big companies paid zero federal income taxes last year, according to the Institute on Taxation and Economic Policy. Among them: Archer-Daniels-Midland, Booz Allen Hamilton, FedEx, HP, Interpublic, Nike and Xcel Energy.

The justification for the tax cuts has often been that the economy as a whole will benefit — that lower corporate taxes would lead to company expansions, more jobs and higher incomes. But it hasn’t worked out that way. Instead, economic growth has been mediocre since the 1970s. And incomes have grown even more slowly than the economy for every group except the wealthy.

For the full commentary, see:

David Leonhardt. “‘A Dirty Little Secret’: Corporate Tax Rates and the Very Rich.” The New York Times (Thursday, April 8, 2021): A18.

(Note: ellipsis added.)

(Note: the online version of the commentary has the same date as the print version, and has the title “Corporate Taxes Are Wealth Taxes.” Where the print and online versions differ, the passages above follow the print version.)

Krugman Argues Costly Universal Basic Income (UBI) Not Justified by Automation

(p. A22) [Andrew] Yang’s claim to fame is his argument that we’re facing social and economic crises because rapid automation is destroying good jobs and that the solution is universal basic income — a monthly check of $1,000 to every American adult. Many people find that argument persuasive, and one can imagine a world in which both Yang’s diagnosis and his prescription would be right.

But that’s not the world we’re living in now, and there’s little indication that it’s where we’re going any time soon.

Let’s do a fact check: Are we actually experiencing rapid automation — that is, a rapid reduction in the number of workers it takes to produce a given amount of stuff? That would imply a rapid rise in the amount of stuff produced by each worker still employed — that is, rapidly rising productivity.

But that’s not what we’re seeing. In fact, the lead article in the current issue of the Monthly Labor Review, published by the Bureau of Labor Statistics, is an attempt to understand the productivity slowdown — the historically low growth in productivity since 2005. This slowdown has been especially pronounced in manufacturing, which has seen hardly any productivity rise over the past decade.

. . .

The recently enacted American Rescue Plan gave most adults a one-time $1,400 payment, at a cost of $411 billion.

. . .

. . . the Yang proposal to pay $12,000 a year would cost more than eight times as much every year — well over $3 trillion a year, in perpetuity. Even if you aren’t much worried about either debt or inflationary overheating right now (which I’m not), you have to think that sustained spending at that rate would both cause problems and conflict with other priorities, from infrastructure to child care.

For the full commentary, see:

Paul Krugman. “Andrew Yang Hasn’t Done the Math.” The New York Times (Friday, April 16, 2021): A22.

(Note: ellipses, and bracketed first name, added.)

(Note: the online version of the commentary has the date April 15, 2021, and has the same title as the print version.)

Biden Plan “Lurches Into” the “Quagmire” of Government Picking Tech Winners and Losers

(p. A23) The Biden administration has put forward the biggest, boldest, most expensive expansion of government in at least a half-century.

. . .

The Biden plan doesn’t just tiptoe around the quagmire of the government picking winners and losers, or what has been termed “industrial policy” — it lurches into it. Hundreds of billions of dollars will be invested by government agencies, whose record of success with direct involvement in the commercial world is, at best, mixed.

A recent case in point: the 2009 American Recovery and Reinvestment Act, which, at $787 billion, was much, much smaller than the more than $4 trillion sum of the two Biden plans put forward thus far. While the 2009 stimulus did put much-needed dollars into the economy without fraud or abuse (as Mr. Biden likes to remind us), it didn’t achieve another of its goals: a swifter transition to clean energy.

As a 2015 Congressional Research Service report reviewing stimulus projects further noted, “Solyndra declared bankruptcy in late 2011 and defaulted on its $535 million loan, Abound Solar received about $70 million of its $400 million loan before shuttering its solar panel operation and filing for bankruptcy in 2012, and SoloPower never met the requirements to initiate its $197 million loan guarantee.”

None of this should be too surprising. Going all the way back to the creation of the Synthetic Fuels Corporation in 1980, which I covered as a New York Times correspondent, the federal government’s recurring efforts at directing energy transitions have mostly struggled.

. . .

No one should want the Biden plan to fall short. But given its vast sweep — I conservatively counted more than five dozen initiatives — the administration should increase its chances of success by leaning more heavily on private models for help and using tax incentives to a greater extent for efficiency.

For the full commentary, see:

Steven Rattner. “Handle Big Government With Care.” The New York Times (Tuesday, April 13, 2021): A23.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 9, 2021, and has the title “Biden’s Big Government Should Be Handled With Care.”)

Cuomo-Endorsed Closure of Indian Point Nuclear Reactors Increases New York’s Use of Fossil Fuels

(p. B6) For most of his long political career, Gov. Andrew M. Cuomo railed against the dangers of having a nuclear power plant operating just 25 miles away from New York City, saying its proximity to such a densely populated metropolis defied “basic sanity.’’

But now, the plant is preparing to shut down, and New York is grappling with the adverse effect the closing will have on another of Mr. Cuomo’s ambitious goals: sharply reducing the state’s reliance on fossil fuels.

So far, most of the electricity produced by the nuclear plant, known as Indian Point, has been replaced by power generated by plants that burn natural gas and emit more pollution. And that trade-off will become more pronounced once Indian Point’s last reactor shuts down on April 30 [2021].

“It’s topsy-turvy,” said Isuru Seneviratne, a clean-energy investor who is a member of the steering committee of Nuclear New York, which has lobbied to keep Indian Point running. The pronuclear group calculated that each of Indian Point’s reactors had been producing more power than all of the wind turbines and solar panels in the state combined.

For the full story, see:

Patrick McGeehan. “Nuclear Plant’s Shutdown Means More Fossil Fuel in New York.” The New York Times (Tuesday, April 13, 2021): A15.

(Note: bracketed year added.)

(Note: the online version of the story was updated April 13, 2021, and has the title “Indian Point Is Shutting Down. That Means More Fossil Fuel.”)

Zoning Regulations Restrict Building Affordable Homes

(p. A25) Although zoning may seem like a technical, bureaucratic and decidedly local question, in reality the issue relates directly to three grand themes that Joe Biden ran on in the 2020 campaign: racial justice, respect for working-class people and national unity. Perhaps no single step would do more to advance those goals than tearing down the government-sponsored walls that keep Americans of different races and classes from living in the same communities, sharing the same public schools and getting a chance to know one another across racial, economic and political lines.

Economically discriminatory zoning policies — which say that you are not welcome in a community unless you can afford a single-family home, sometimes on a large plot of land — are not part of a distant, disgraceful past. In most American cities, zoning laws prohibit the construction of relatively affordable homes — duplexes, triplexes, quads and larger multifamily units — on three-quarters of residential land.

For the full commentary, see:

Richard D. Kahlenberg. “Zoning Is a Social Justice Matter.” The New York Times (Tuesday, April 20, 2021): A25.

(Note: the online version of the commentary has the date April 19, 2021, and has the title “The ‘New Redlining’ Is Deciding Who Lives in Your Neighborhood.”)

Clean-Energy Requires More Transmission Lines Which Requires More Use of Eminent Domain to Seize Private Property

(p. B12) President Biden’s infrastructure plan proposes some tried-and-trusted methods to spur clean-energy development such as a 10-year extension of existing tax credits for solar and wind energy. More interestingly, it introduces an investment tax credit for high-voltage transmission lines.

. . .

The administration is certainly looking in the right direction: To reach President Biden’s net-zero emissions goal by 2050, the U.S. will need to expand electricity transmission systems by 60% by 2030 and may need to triple it by 2050, according to research published by Princeton University in December [2020]. That is because renewable energy-rich places such as the windiest regions aren’t necessarily close to population centers, where electricity demand is.

While the clean-energy industry probably won’t complain about a new subsidy, the tax-credit proposal is a bit of a head scratcher given that the real roadblocks to transmission lines have to do with permitting, much of which is in the hands of state and local authorities.

A shift toward e-commerce should push up productivity by eliminating workers needed in bricks-and-mortar stores, Mr. Gordon said. Videoconferencing should also help, though the public-transit sector could offset some of the gains because buses and rail transit will carry fewer riders, he said.

“For most transmission we need in the country, it’s not a cost issue or an access-to-capital issue, although transmission can be delayed because of cost allocation debates,” said George Bilicic, global head of power, energy and infrastructure at Lazard.

. . .

The proposed plan also calls for a so-called Grid Deployment Authority within the Energy Department to “better leverage existing rights of way” along roads and railways. That would be a good first step, though eminent domain—the power of the government to take private property and convert it for public use—remains largely within state regulators’ hands. While the Federal Energy Regulatory Commission has authority to grant natural-gas pipelines the right of eminent domain under the Natural Gas Act, there is no equivalent authority for electricity transmission under the Federal Power Act and little momentum in Congress to grant that provision.

For the full commentary, see:

Jinjoo Lee. “Productivity Looks Ready to Pick Up.” The Wall Street Journal Tuesday, April 6, 2021): B12.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the commentary has the date April 4, 2021, and has the title “Biden’s Grid Proposal May Be a Square Peg in a Round Hole.”)

The Princeton research mentioned above is:

Larson, Eric, Chris Greig, Jesse Jenkins, Erin Mayfield, Andrew Pascale, Chuan Zhang, Joshua Drossman, Robert Williams, Steve Pacala, Robert Socolowi, Ejeong Baik, Rich Birdsey, Rick Duke, Ryan Jones, Ben Haley, Emily Leslie, Keith Paustian, and Amy Swan. “Net-Zero America: Potential Pathways, Infrastructure, and Impacts, Interim Report.” Princeton, NJ: Princeton University, Dec. 15, 2020.

Chinese Chip Central Planning Creates “Stunning Absurdities That Defy Logic and Common Sense”

(p. B1) Liu Fengfeng had more than a decade under his belt at one of the world’s most prominent technology companies before he realized where the real gold rush in China was taking place.

Computer chips are the brains and souls of all the electronics the country’s factories crank out. Yet they are mostly designed and produced overseas. China’s government is lavishing money upon anyone who can help change that.

. . .

(p. B2) In a way, China is hoping to achieve the same kind of liftoff that helped it progress from making plastic toys to crafting solar panels.

With semiconductors, though, “the model starts to break down a little bit,” said Jay Goldberg, a tech industry consultant and former Qualcomm executive. The technology is eye-wateringly expensive to develop, and established players have spent decades accumulating know-how. Europe, Mr. Goldberg noted, once had many “incredible” chip companies. Japan’s chip makers are leaders in certain specialized products, but few would call them bold innovators.

“My point is, there is a ladder — China’s moving up it,” Mr. Goldberg said. But it’s “unclear which outcome they go to.”

. . .

At a top-level meeting on the economy last week, the Communist Party’s leaders enshrined technological self-reliance as one of the country’s “Five Fundamentals” for economic development.

Complete self-sufficiency in chips, however, would mean recreating every part of the lengthy supply chains for some of the most complex technology on earth — a mission that would seem to lead, if not to madness, at least to waste.

. . .

“Up until very recently — this year — the goal had been: With state backing, move up the value chain, specialize where China has a comparative advantage, but don’t really try and fall down the rabbit hole of trying to build everything yourself,” said Jimmy Goodrich, the vice president for global policy at the Semiconductor Industry Association, a group that represents American chip companies.

Now, “it’s very clear that Xi Jinping is calling for a redundant domestic supply chain,” Mr. Goodrich said. “And so the rules of economics, comparative advantage and the supply-chain efficiencies have basically been thrown out the door.”

The government is conscious of the dangers. State-run news outlets have amply covered the recent semiconductor flameouts. The message to other upstarts: Don’t mess it up.

When the state broadcaster China Central Television visited one stalled project in the eastern city of Huai’an recently, it found dozens of giant machines idling on the factory floor, many of them still sheathed in plastic.

“There have been some stunning absurdities that defy logic and common sense,” China Economic Weekly said.

. . .

“There is definitely a bubble in China,” he said. “But you can’t overgeneralize.”

. . .

“Something is bound to accumulate, whether it’s equipment, talent or factories, right?” Mr. Liu said. “If not you or the other guy, then it will be someone else who ends up using it. I think this might be the government’s logic.”

For the full story, see:

Raymond Zhong and Cao Li. “China’s Frenzy to Master Chip Manufacturing.” The New York Times (Monday, December 28, 2020): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 24, 2020, and has the title “With Money, and Waste, China Fights for Chip Independence.”)

Differences in Study Results Are Seldom Due to Whether Study Design Is Observational or a Randomized Clinical Trial

(p. A17) The health system would be less burdened if more patients were treated before they require hospitalization, and there are promising therapeutic options that patients can administer themselves at home. This was the subject of a Nov. 19 [2020] hearing before the Senate Homeland Security and Governmental Affairs Committee.

Testimony from the hearing underscored an important issue: Too many doctors have interpreted the term “evidence-based medicine” to mean that the evidence for a treatment must be certain and definitive before it can be given to patients. Because accusing a physician of not being “evidence based” can be a career-damaging allegation, fear of straying from the pack has prevailed, favoring inertia and inaction amid uncertainty about Covid-19 treatments.

For diseases with established treatment options, holding out for certainty may be prudent. But when options are limited and there are safe treatments with evidence for effectiveness, holding out for certainty can be catastrophic. Requiring a high degree of certainty during a crisis may elevate the augustness of medical organizations and appease the sensibilities of medical professionals, but it does nothing for patients who need help.

The penchant for certainty is visible in the frequently updated treatment guidelines for Covid-19 from the National Institutes of Health. These guidelines were developed by scientists around the country, but because of a mentality that is biased toward virtually irrefutable evidence, no distinction is made for treatments with evidence for effectiveness that falls below the mark of certainty. This framework almost certainly has contributed to many avoidable deaths during this pandemic.

. . .

While some health officials dismiss nonrandomized studies, the Cochrane organization, an international leader in evidence-based medicine, published a review of several hundred studies showing that randomized clinical trials and nonrandomized studies of treatments generally yield similar findings. Modern epidemiologic and statistical methods can usually overcome biases inherent in nonrandomized study designs.

For the full commentary, see:

Joseph A. Ladapo. “Too Much Caution Is Killing Covid Patients.” The Wall Street Journal (Wednesday, Nov. 25, 2020): A17.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the commentary has the date November 24, 2020, and has the same title as the print version.)

The Cochrane organization review mentioned above is:

Anglemyer, Andrew, Hacsi T. Horvath, and Lisa Bero. “Healthcare Outcomes Assessed with Observational Study Designs Compared with Those Assessed in Randomized Trials.” In Cochrane Database of Systematic Reviews, 2014.