29 December 2013

Flying Cars

When people hear about my support for Personal Rapid Transit, they sometimes compare it to the Jetsons or wonder about Flying Cars.   Unless there is a pretty significant technological breakthrough, I'm pretty skeptical that flying cars will ever happen.

Let's pretend for a moment that the breakthrough occurs and a car can be made to take off and hover without the huge energy expenditure that doing that today requires.  (This might be a breakthrough in anti-gravity, but it's more likely a new, very cheap, very portable source of energy.).  This doesn't change the need for roads, although the new technology would allow them to be in the sky.  Presumably this would mean that they could be built very cheaply, and that they don't interfere so much with other construction.  If more capacity is needed, they could be easily widened or extra decks added.  They are still plainly finite and subject to traffic jams.  Many science fiction movies with flying cars, such as Blade Runner, Star Wars, etc., have recognized this and show nearly all the cars moving in neat rows.  The action of the movie often involves a breakdown in this order but if such disorder were commonplace, flying cars would either crash into each other constantly, or have to stop to avoid such collisions almost as often.

NASA and the FAA have been working for some years on a "NextGen" instrument navigation system, sometimes called "Highway in the Sky".  Early stages of this amount to technological improvements to present instrument flight systems--automated radio frequency handoffs, altitudes and headings transmitted directly to "glass cockpit" navigation systems, etc.  If limited to present instrument routes, it wouldn't have much impact on system capacity, but it would substantially reduce workload and errors for instrument pilots.  But over the long term, it would allow many more routes to be managed.  But without cheap VTOL and hover, the runway would remain exactly the bottleneck it is with aviation today.

Cheap VTOL changes everything.  The "road" could be above the scene, and when you need to stop, you simply leave the road and drop down to whatever your destination is.  Present VTOL and hover consume a tremendous amount of energy.  Present technologies, which are aerodynamic, also require substantial space between vehicles.



Interestingly, Personal Rapid Transit allows a bit of an approximation:  As with flying cars, the "roads" are elevated, so they don't consume much real estate on the ground, and can easily go over or around obstructions and other routes.  They're a lot cheaper than other forms of railed transit, although not so cheap as simply reserving a corridor of air.  And you can add a station anywhere you want, without interfering with traffic.  Transportation with PRT is a lot more like taxi service than having a private car.  Like the movie versions of flying cars, the vehicles can run very close together and move a lot of people.  And because they are on fixed guideways, it's very difficult to make them collide.

Is the Debt a Problem?

The US federal debt recently crossed $17T, just under $55,000 per American.  This is obviously a gigantic number and a lot of people are really terrified of it.  Like monsters under the bed and mysterious thumps in the dark, once you understand what it really is, it's not really a boogieman at all.

Debt is a commitment to pay creditors. These commitments are contracts, promises, signed to repay borrowed money and some interest on some specified schedule.    If an entity has more than enough money to pay all its commitments, this is called a surplus (and it can be used to pay off some debts early).  If it doesn't, this is called a deficit, and it must find more revenue or borrow more.   The accumulated debt, the $17T in the case of the US federal government, is the sum total of all of these individual debts.  In the case of the federal debt many of these individual debts were borrowed at very low interest.  The total 2013 interest payment commitment of the US government is about $225B.  This is about 6% of the total budget, but represents an average interest rate of about 1.6%.  This is roughly the same as the rate of inflation--and remember that a lot of this debt was accumulated when long term T-Bills were paying rates over 6%.  New, short term federal debt is well under 0.2% and hasn't been over 1% since the crash in 2008.

Potential creditors study potential debtors before allowing them to borrow.  In the case of individuals or businesses, a large debt is a signal that a creditor might not get paid, and the creditor is justified in raising interest rates for the debtor or refusing to lend to them.  But for the federal government, it is almost meaningless.  It's just a big number that is aggregated from a whole bunch of other numbers.  The individual debts have the full backing of the US Treasury and are factored into the deficit.  The only circumstance under which they will not be paid is if the congress blocks them somehow.  The fight over the debt ceiling is one way this might happen.  But apart from worries about congressional republicans intentionally destroying the economy, creditors have consistently indicated that the US Treasury is the most reliable debtor in the world.

Unless the Tea Party or someone like them forces default, the debt we have accumulated will be paid on schedule, no matter what happens.  These payments are factored into the budget, and as long as there's a shortfall, they will be part of the annual deficit calculation.  As long as we keep paying, the accumulated debt will gradually go away.  But for the past decade, we have run gigantic deficits, to pay for gigantic tax cuts for rich people, costly, unnecessary wars, and huge subsidies for banks, oil companies, health care companies and more.  Many of these have ended, but not all, so the deficits continue...but it's been halved from the Bush administrations last, $1.413T deficit to 2013's $680B and is on track to continue to diminish.   The only part of these past debts that will continue to bite us in the future is the continued need to borrow enough to cover the deficit.  Although any borrowing we do today comes at essentially no cost, interest rates in the future might be higher.  Had the surplus left by the Clinton administration been continued, we wouldn't have needed to do this borrowing at all.

13 December 2013

Takers and Followers

Broadly speaking, I think, people can be put into three categories:  Takers, Followers, and everybody else.

Followers are people who, through lack of imagination, inculcation through school, church or parenting, do what they are told.  Period.  Psychologists refer to this as having an Authoritarian Personality.  I'm pretty sure this is a majority of the population: nearly all political conservatives and moderates (except for a small group I'll describe later) and even a large number of otherwise fairly progressive people are followers. Even if they know better, they believe that morality comes from a given authority, usually someone who purports to speak for a deity.  They believe that only through obedience can there be social order.   I'm pretty sure most of them started out with a mind of their own, but it was driven out of them over time.

The second group are the Takers.  These are people who will will take advantage of whatever situation they see or can construct for themselves, never mind the consequences to other people.  Most of these are simply thieves, but a lot of them understand how to manipulate Followers to do their bidding.  Mitt Romney is a defining example.  The welfare parasites that Romney alluded to in the "47%" comment are takers, although they are only a tiny fraction of those who collect government benefits and pay low or no income taxes.  These are people who wouldn't take a job if one was available, but have found some scam to live on.  They are at most 1% of the people who collect some sort of welfare.   Welfare frauds cost a negligible amount of money, but they do a lot of harm because they give credence to monsters like Romney, Pete Peterson, the Kochs, and Fox News. Most evangelist preachers are takers, and I'm pretty sure all televangelists are, although a few seem to have good intentions to go along with their rapacity.  Bernie Madoff is a taker, and so is Jamie Dimon.

The final group is the rest of us.  Utilitarianism demonstrated that the vast majority of Judeo-Christian, Buddhist or any other,  morality can be derived from very basic principles, mainly the golden rule.  We don't need to follow anybody, we just need to recognize that not hurting each other is important.  Many of us aren't utilitarians, but you don't need to be.  School is good at teaching this stuff, and it could be better.  Religion could be too...but it has been co-opted by Takers.

We all fall into the temptation to be followers.  If the leader has good intentions, this can be harmless.  But we must always be aware that the Takers are out there.

12 December 2013

Politifact, Again

Politifact just came in with its Lie of the Year.   Once again, it's not really a lie, but a mostly true statement that has been turned into strawman outrage by the right wing talk machine.

First of all, it's important to understand how the LotY is selected:  Politifact puts up a list of candidate statements and politifact readers vote.  The other candidates were mostly various incredibly wrong things that republicans had said about ACA, a few statements about NSA spying, and the eventual winner, which was "You can keep your plan if it hasn't changed since the law passed."   If you were to pick a sample of voters evenly distributed across the political spectrum, this was the guaranteed winner--ALL republicans would vote for it, because it's been repeated by all media over and over, while no other lie would get more than a percent or two of votes.

Let's look at the actual statement.  The point of it was that if you had legitimate health care insurance before the law was passed, you'd get to keep it--that there was nothing in the law that would cause you to lose it.  This is basically true. Trouble is, there were a lot of insurance policies that were really only minor-care insurance--they didn't cover major health catastrophes.  Those policies were often very cheap and the purchaser wouldn't find out they didn't have real insurance until payment for a serious health problem had been refused or the policy cancelled.  ACA required that any new policies issued be real insurance, and that's where the problem came in: The insurer had to find some way to pay for the required coverage, when they had heretofore only been charging for much cheaper, minor care coverage.  But under ACA, old policies were grandfathered--even the worthless ones.  Until the policy was significantly changed, it could continue as before.   Most insurance policies are rewritten every few years, so eventually, the bad ones would be flushed out of the system.

Of course, the insurance companies knew that they had the customers over a barrel.  All they had to do was cancel the old policy or restructure it in a way that under ACA required it to become real insurance, and they could charge "real" market prices and force customers to pay them.  Since no new fake coverage could be issued, the customers didn't have a cheap alternative anymore.  Viola!   Of course they were still hoping for a big enough backlash to get PPACA overturned, allowing them to go back to their old scams, but this was a pretty good scam too.

The lie is that this somehow proves that PPACA is a bad thing.  The fault is entirely with the scammer insurance companies, that have been scurrying out of the light like the cockroaches they are, and which the incredibly corrupt congress has forced us to do business with, instead of squashing them as they should have.  They are now limited to gouging only 20% where before 30% was commonplace.  Estimates are that about 5% of Americans will be harmed by these price hikes, nearly all of them well-to-do, and that the VAST majority of Americans will see their health insurance costs go down, often quite dramatically.

10 December 2013

Christie and the Bridge Closing




There's enough evidence now that New Jersey governor Chris Christie's political career should be at an end.  Being New Jersey, he probably won't step down although he probably should, but there is no interpretation of this story that does not leave him looking either grossly incompetent or pointlessly cruel and vindictive.

The George Washington Bridge, between Manhattan and Fort Lee, New Jersey, is the busiest motor vehicle bridge in the world, its 14 lanes carrying over 100M vehicles a year.  Most of the working residents of the small town of Fort Lee work in Manhattan and commute across the bridge several times a day.    There's some construction on the bridge that began in august, but the lane closures were devised to minimize the disruption.  There is no toll eastbound (into Ft Lee), but there is a toll westbound, and there are 31 toll booths in Ft Lee to collect a toll into Manhattan. All of these booths are on the various through roads that merge together to cross the bridge.  Most of these roads must be entered outside of Fort Lee, but there's an access road that allows 3 of those booths to be accessed from the surface streets of Fort Lee.  Essentially all Fort Lee commuters use those three booths.  There's a barricade that protects the exit/onramp and effectively prevents them from being used by through traffic, and the approach makes it essentially impossible for Fort Lee commuters to use other booths, unless they go a few miles in the wrong direction first, to get onto the through roads from out of town.  During the busy morning commute, those booths are always jam packed.

On the first day of school this year, two of those three booths were ordered closed by their supervisor, a main named David Wildstein, appointed by Mr. Christie, a long time friend and supporter.  No warning and no clear reason was given, and in subsequent investigation, the explanations given were proven to contradict the facts.  Predictably, the traffic from the thousands of people trying to get across the bridge backed up into Fort Lee, clogging surface streets all day long, making many people late for work or miss it entirely, costing jobs, school credit and more.

A few days earlier, Mr. Christie, a Republican, had asked the Mayor of Fort Lee for his endorsement in the gubernatorial election two months later, in which Mr. Christie was leading by double digits in the polls.  The mayor, a Democrat refused.  It's difficult to see how this is not a political retaliation.   Mr Wildstein has already resigned and the people who had reported to him have expressed that there was a culture of fear in the department, and that they are still afraid of testifying even now for fear of retaliation.   (Most of these are low-skill, low pay jobs while the unemployment rate in New Jersey is considerably worse than most at just under 9%, while the national average is 7%.)

The possibilities of what happened are relatively few:
Mr Wildstein was acting on his own, trying to punish the Mayor.
Mr. Wildstein was doing this under orders from the Christie campaign or Christie himself.
Mr. Wildstein actually was, as he claimed, trying to run an experiment in traffic flow manipulation.

If the first or third were true, Mr Wildstein should have been ordered to fix the situation, and probably fired for corruption or incompetence as soon as Christie heard about the situation.  Instead, he laughed it off. Wildstein only resigned under intense public pressure.

Whichever it was, lots of panicked commuters tried to alert authorities to the situation and get it fixed.  That it didn't get to Christie's attention by about 730AM and fixed a few minutes later is evidence of either gross management incompetence, or of tacit or explicit support.    It did take a week to get it fixed.


My suspicion is that Wildstein was doing it on his own, but that Christie didn't mind a little political retribution and didn't really care about what was happening in Wildstein's department.    The "culture of fear" in the department, should be, by itself, a major blow to Christie's political future especially if he is found to have abetted it.  This is the same guy that cancelled the new ARC subway tunnel on the grounds that it cost too much, and claimed New Jersey was on the hook for most of it, even though that was only 17% and that the economic value it would have had for New Jersey was many times its cost.

update 13 Feb 2014
An email trail tells us that Wildstein was ordered to create traffic problems in Fort Lee by Christie's deputy chief of staff, Bridget Kelly.  The phrasing of the order made it clear that this had been planned.  Christie fired her without asking her why she had done this.

Previous discussion between Christie's office and the mayor of Fort Lee included a new, half billion dollar high rise residential development, just over a block from the On-Ramp that was closed, on the same street--just barely beyond the southern edge of the picture above. The money for the buildings comes from private investors, but the units are being sold, predicated entirely on how easy it would be to get into Manhattan.  It this context, it is difficult to see how the shutdown is anything but punishment for Fort Lee and it's mayor.

Today it was revealed that the grand jury is studying the circumstances of the ARC tunnel shutdown and has issued Subpoenas.  It's beginning to look a little like this money was effectively stolen from the port authority (which also runs the subway) to be used to build New Jersey roads...purely so Christie could get credit for building those roads without raising taxes.

At this point, the question is not so much whether Christie will be running for President in 2016 but whether he'll be in prison.

addenda 20 Feb 2014
today's top seller on Shapeways:
Chris Christie directing traffic BridgeGate 3d printed Figurines Desk Toys
http://www.shapeways.com/model/1674852/chris-christie-directing-traffic-bridgegate.html?li=home-itm-79814d&materialId=26

06 December 2013

The Fallacy of the Self-Funded Pension

Prior to the union movement, almost nobody had a pension.  What they had was an extended family: When grandpa and grandma became too old to work, the younger members of the family took care of them.  They still had knowledge and wisdom, and even if they became senile, they were taken care of as best as could be managed.  If they lacked such an extended family--and many did--they died, destitute.    It was a rare individual who could build up sufficient resources to take care of himself in his dotage over a single lifetime.  Those that did, mostly in the form of land, were called "nobles" or "landed aristocracy", and they generally had extensive perquisites from the king.

The invention of the pension was a brilliant stroke.  It was a deferred cost for employers, so it was an easier pill to swallow in a tough negotiation.  And it was fairly cheap: even if the employer had to pay out of pocket, it was far cheaper than the equivalent wages:  an employee who worked for 40 years would likely only collect a pension for 10 or 15 before they died, so carrying a former employee on pension cost 1/4th to 1/3d of their equivalent wages.  Moreover, by investing a small amount of capital long in advance, a pension fund could be built up to cover easily forecast costs for very low present investment.  In the 80 years between the great depression and the great recession, completely secure investments could return 5% or more.   By effectively pooling the resources of all these employees, the group could take advantage of size to achieve higher diversity and security.

But not everybody worked for a company big enough to afford such a pension.  So the government stepped in and created Social Security: the biggest pension pool ever, able to access the most secure possible investments.  They taxed payroll to pay for it.  And it worked!  Social Security is, by far, the most effective anti-poverty program

There are those who want to end Social Security and many of them want to put an end to all group pensions.  Their argument is that they don't want to pay for someone else's pension.  That seems to make sense, until you consider the numbers:  an individual worker, putting away 6% of wages at 5% interest above inflation, will have about 4 years wages saved up after 30 years.   It gets better if you keep at it for longer: about 7 years at 40 years and 9 years at 45.  But how many people start saving for retirement at age 18?  or even age 30?

On the other hand, as the fund gets bigger, it becomes more and more self-sustaining.  A fund can be completely self-supporting  if the amount collected by beneficiaries is less than the interest received.  With 5% interest, this is 20 times the total benefits.  This is entirely realistic.  A mature, thousand-employee company is likely to have 150 former employees getting pensions.  At $30K each, that's $4.5M, about $4500 per current employee.  Even if the fund is not that big, current contributions can be proportionately smaller.

So what happened?  A few companies decided that they could get a tiny advantage by not providing a pension.  Their competitors felt they needed to compete, and this was abetted by the companies that handle the pension funds themselves wanting to take advantage of these huge pools of money to make more risky investments--risks that would not be allowed by a competent pension fund manager.  Many companies literally stole their employees pension funds to make risky bets.  And devices like 401(k)s were devised to seemingly offload pensions from employers to employees, while exposing them to rapacious investment advisers.  At this point, 401(k) can only be seen as a colossal failure.  While most people have one, very few have enough in it to survive for more than a few years.  Without Social Security, most of these people would have nothing at all.  The folks that did this to them should be subject to criminal prosecution.  Unfortunately, they got their lobbyists to change the laws.

Everybody should save for their own retirement.  Of course.  It's not very expensive, and even if you have a group pension, it's at least a safety net.  But it's far less cost effective than the group pensions.  The only people who can really afford to live on a self-funded pension are the same as they ever were: the very wealthy.

05 December 2013

Medicare and Social Security Viability

A few days ago, the WSJ published yet another idiotic editorial arguing that Medicare and Social Security must be cut or..., well something.   They have pretty much everything wrong.  For example, he points out how since 2010, Social Security has been underfunded.  Well, yes, that's true, the "Deal" that Obama cut with the Rs cut the FICA tax rate from 6.2% to 4.2%, which ended at the start of 2013.  This is, by far, the most stimulative tax cut of all the many tax cuts the republicans have pushed for since the collapse of 2008, because it's one of the few that mainly affects people who will actually spend it.   It pales in comparison to what simply spending the lost revenue on hiring would have...but instead they answered with the sequester, which cuts tens of thousands of government and other employees, overcoming the tiny gains from the tax cut.

The biggest error though is when they point out that, extrapolating the 2011/2 numbers out to 2030, that the average medicare and social security recipient will have paid into the system $180K and will be taking out $664K of benefits.  Even were that correct (17 years of 6.2% FICA payments were counted as 4.2%), it's mostly irrelevant.  For starters, the employer matches that amount.   It's really part of the employee's compensation, but nobody pays taxes on it. That $180K suddenly becomes $360K.  Secondly, there are at any time, slightly more than twice as many people contributing as collecting: if you work from 18 to 65, that's 47 years, while the average lifespan after 65 is less than 20.  So the number of people contributing is twice that of people collecting.  Well not quite--lots of people don't work the full 47.   There were 139M people who filed taxes last year and 49M beneficiaries.  So what had seemed like a 3.7:1 ratio is in fact, pretty close to 1:1.

Social Security insists that their numbers work out.  From what I've seen, they are significantly better at math than these guys, or anybody that believes them.

15 November 2013

Zombies!

Last night, Neil DeGrasse Tyson did a bit with Jon Stewart on the Daily Show about Zombies, decrying their almost complete impossibility.  So I've been thinking about it:  As an engineer, if I wanted to make a zombie, how would I do it?  I see several levels at which this could work:

Reanimating flesh is problematic.  There are a bunch of physiological and structural failures that occur with death which make using the mechanisms of a cadaver problematic.  However, if the flesh is captured soon enough after (or before) brain death by the zombie mechanism, artificial neural commands could be sent and blood replacement and so forth are perfectly plausible, which would make a human body reasonably functional under control of the zombie mechanism.  Generally a little beyond today's state of the medical art, and if we do get to that state there are a number of huge medical breakthroughs they'd allow (curing paralysis!).  Presumably the zombie mechanism would replace the brain with an artificial counterpart.   (This could explain zombies craving for brains.   It's not so much that they want to eat them, as that they want to remove them and replace them with their own machinery).

You could achieve something that looked like reanimated, long-dead flesh by providing it with an alternate mechanism for motion.  A motorized artificial skeleton comes to mind.  Since the flesh is dead, whatever procedure is used to insert the artificial skeleton is not of consequence to the body.  It just needs to be strong enough to move the body and have sufficient coordination to make the zombies move--like zombies, a pretty low standard.  It's even possible that the rotting protein of the old body could be used as a fuel source for this.

I see several ways such an artificial skeleton could be achieved.  The most obvious would be surgical implantation.  This seems like a lot of work.  If you can do all of this, why not just chase your victims with naked artificial skeletons?  Scary as that would be, zombies (especially if they are the bodies of people who are recognized) would be scarier.  Just covering your artificial skeleton with the skin of the corpses would probably serve fairly well for this need.

Another scheme would be to replace or control just the joints of the corpse to be reanimated. This would require a fairly strong machine, to overcome rigor mortis, but it's probably doable.  It's a little less surgically intrusive, but it's really the same approach as the artificial skeleton.

The animated bug colony creature of the first Men In Black movie suggests yet another alternative--it's similar to the artificial skeleton idea but it provides a practical implementation: the bugs eat the entire flesh and viscera of the victim, leaving only the skin and skeleton.  Then they form a colony, working together to animate the skeleton with the skin around it.

Are zombies possible?  Yes.  Are they likely?  No.  It's hard to imagine an evolutionary advantage to a creature that reproduced this way.  It's just as hard to imagine a purpose for an alien species wanting to do this.


10 November 2013

More Politifact

Here's politifact wondering where Harry Reid got his data for the Sequester costing 1.6M jobs and rating his statement categorically false.   It took me 5 seconds to find Reid's source.  To be strict, CBO said the sequester commits us to between 300K and 1.6M job losses, while Reid implied that the job losses had already happened.  A fairer reading would be "half true", or perhaps "hyperbolic".  Combined with the shutdown and debt ceiling threat, perhaps "optimistic".




31 October 2013

The Tea Party

The original Tea Party was a response to a very specific, particularly galling act by the English government.  The present Tea Party is fairly close to the exact opposite.

England's American colonies were becoming more and more populated, with more and more agriculture, business, shipping, manufacturing, etc.  They had noticable participation in the 7 years war (known by Americans as the French and Indian War).  They had proven capable of significant independent action and self government, yet the English seemed to only see them as a source of resources and money.  They had bans on American manufacture of tools and many finished products.  It was galling to have to send raw materials across the ocean only to buy some of them back as finished products, which they could have made themselves perfectly well, for a lot more money.  But the English wanted their monopoly.  Tea was specifically protected: Americans could only buy it from certain distributors.  The shipowners and sailors that lived in Boston and the communities around it were the ones who were doing all this shipping, but they had to go through a middleman who took a very large share for doing nothing but being friendly with the King or some MP, while they were doing all the work.  The last straw was when a tax was imposed on this tea.  While they did have a few friends there, such as William Pitt, the Americans had no explicit representation in Parliament at all.  Taxation without representation! Yet even then, it wasn't so much the taxes as being cut out of most of the profits of all this trade.  They wanted a freer market, with no monopolies, or at least a fair chance of being one of those monopolies.

So one night a few of them dressed up as Native Americans and threw a bunch of it into Boston Harbor.

The new Tea Party also likes dress up, but their goals are almost the opposite.  They have, and have had through the entire history of the country, extensive representation.  Their ideological ancestors were the ones who didn't want to give the vote to slaves, but did want to count them for purposes of representation in congress.  They were the ones who murdered the inventor of our countries economic system in a duel while serving as vice president.  They were the anti-immigrant "Know Nothings", they blocked acceptance of the 14 points and the League of Nations, they made the Great Depression much worse by blocking Roosevelts stimulative and social and economic programs, and they cheered as Ronald Reagan and George W Bush destroyed them and brought our country back to depression.    It was only when they were rightly voted out of office for their misdeeds that they started their dressup.  Even then, they still had a strong enough hand in government to cause all sorts of mischief.  There is no possible interpretation by which they can be viewed as being without representation.  What they want is for people to do what they want, without going through the representative process.

The more interesting opposite is that they are mostly funded by would-be monopolists: The Kochs and their Cato Institute, the Murdoch press, Pete Peterson, The Heritage Foundation.  Without Fox News egging them on, there would be no Tea Party.  They like to think of themselves as grass roots, but they really aren't.  They are puppets--astro-turf.    Their funders are very  wealthy businessmen, who are tired of this whole competitive, free market thing and would like to have a monopoly.    Where the original Tea Party was largely a strike against monopoly, these guys are, whether they know it or not, in favor of it.

And yes, they are against taxes.   The American middle class pays among the lowest overall tax rates of the middle class of any advanced country, and tax rates are lower now, during this recession, than they were in any of the economic booms of the past 80 years.  They get a lot for their taxes, and they are extremely unwilling to give any of it up, yet they still want their taxes to be lower.  Although they are very willing for people that they don't like to give things up, things like eating and being able to go to school.    The original tea party wasn't so much against taxes, they were against not having any representation or even a chance at representation, while still having to pay them.

20 October 2013

Macroeconomics versus Business

One of the standard lines about the national debt is that it's saddling our children and grandchildren with backbreaking debt, and that cutting programs that feed today's children and grandparents will somehow alleviate that.  Uh, no.  Or only if you figure by cutting these people off, they will die and stop being a burden.  Debt is only a burden if interest rates on it are high, or if its existence or level will prevent you from doing something you want to do, like borrow more money.   Interest rates on present federal debt are well below inflation, and the only people that are even suggesting that there might be a problem with the creditworthyness of the national treasury are the very people who are trying to wreck its creditworthness:  the Tea Party and their backers.

All of these backers are fabulously wealthy businessmen.  These are people who have built, or more often, inherited a business built by exploiting the labor or naivety of those much less well off, often by mining a resource they were given by the same federal government they are now trying to weaken.  What they want is to be able to exploit at will--to pay people such low wages and benefits that when they become unable or unwilling to work, they can simply be discarded and replaced with someone even more desperate for a job.  To mine and pollute and lay waste to the environment and either ignore the cost or foist it off on somebody less able to resist having to pay for their carnage.

Individually, each of these businessmen (and a few businesswomen), is making a rational business decision.  If they cut costs by paying less, by evading or overturning regulation, they are able to outcompete their competitors and gain a larger piece of the regional or global economic pie.  Many of these people went to business school.  One of the fields they studied there was called economics.  Economics is split into two broad sub-disciplines, called Microeconomics (the study of individual businesses and their individual interactions with their neighboring businesses), and Macroeconomics, which is the study of entire systems of businesses as a whole--regions, countries, the whole planet.  Business students generally spend a few weeks in a freshman economics course learning Macro, and after the final in that course, proceed to forget it all, focusing exclusively on Micro and other aspects of business.

Macro is a very different field than Micro, in the same way that structural engineering is a very different field than chemistry.  The chemistry of concrete and steel are important and fundamental to whether the bridge will hold up, but they are only a small part of the picture.   Here's an example of how they are different:  to an individual business, gaining market share is a good thing: more customers, more employees, the chance at better profits.  But what if that bigger business is undermining the overall market.  A community that once had a thousand individual businesses employing five thousand people, finds them replaced by WalMart, employing 1000.  During the transition, it seems like a great deal: prices are better and lots of jobs were created, building and working in the new store, but before long, most of the old businesses are gone and the profits are mostly going to Bentonville, not staying in the community as before.  And to compound the injury, the community probably gave WalMart a big tax break to get them into their town instead of the neighbors.

At the microeconomic level, money is an immutable, powerful thing: you are competing with your rivals for it, and it feels like the only thing that matters.  At the macroeconomic level, money is an illusion.  Money is a token, representing goods and services, no more.  The only thing that matters to the economy is goods and services.  If there's demand for those, then the economy does well and lots of people have jobs.  Extracting money by taking it to Bentonville or Wall Street and burying it there, means that those people own that fraction of your labor--before you even get paid.   That money, and therefore that part of the work people do, is gone from the real economy, it's now part of Wall Street schemes, and stuck there, producing little or nothing. MBAs by and large do not understand this: they only see the world through their myopic lens of individual competition.  The price of inequality is a smaller economy.

19 October 2013

Right Turn Lanes

A recent visit to California reminded me how differently they handle right turns there.  At nearly every intersection where there are multiple lanes, there is a dedicated right turn only lane.  Here in Washington state, there are a few such lanes, but not many.



Prior to 1 Jan 1980, most of the country did not have "Right Turn on Red".  This meant that if you were stopped at a traffic light, you had to wait for the light to turn green, whether you were going right, left, or straight.   California and a few other western states, however, allowed you to treat a red light as a stop sign, provided you were turning right (or left onto a one way street from a one way street).  In other words, come to a full stop, check for traffic, and then proceed when it's safe.  During the OPEC oil embargoes of the 1970s, a few states experimented with this and found a noticeable improvement in gas mileage, and the federal government tried to pressure the rest to join in, but many refused, claiming it wasn't safe.  So starting on the 1st of January 1980, every state in the country was mandated to adopt this rule.   Was it safe?  For the first few years, there were on average 84 fatalities a year involving such intersections.  This is a small enough number on the scale of traffic fatalities (about 40,000 a year) as to suggest it was never really a problem.

(I happened to be living in Massachusetts when the change was mandated.  Many right turns, such as ones that cross another street, are not safe to do this on, so signs that specified "No Turn on Red" could be placed at such location.  On New Years Eve 1979 (it was a monday), essentially every traffic light in Massachusetts gained such a sign.  There weren't many state highway workers leaning on their shovels that day.  The feds caught wind of this and made them take about 90% of them down.)

The traffic flow efficiencies come not from idling less, but from more cars being able to make it through the intersection over a given time.  If, say, 20% of cars don't have to wait for the light, that's 20% less time the light needs to be green to allow the same number of cars through.  That means the chance of cars on the cross street having to wait for a red light are reduced by that much.

One consequence of this notion about right turns is that many traffic engineers haven't quite grasped the idea that a busy intersection needs a dedicated right turn lane in order to gain the traffic flow efficiencies.  To some degree this is understandable: when many streets were built, they weren't all that wide, and buildings were placed close to the right of way.  If there's only room for one turn lane, they chose to make it a left turn lane because those cars actually do have to wait for oncoming traffic...the right decision.

But there are lots of places that they have the room and in surprisingly many they have actually gone out of their way to block it. There used to be a right turn lane in the picture to the right, but they actually added the little bumpout about 5 years ago to block free rights.  Are they thinking they're protecting the crosswalk?  That's a bus stop just to the east--but why shouldn't cars use it when buses aren't?

To their credit they are fixing some:  this intersection in Ballard, which I go through almost every week, was improved a few months ago:  That maroon car is parked, the front car in the eastbound right lane is going straight, and probably half the cars waiting behind are turning right, so they are stuck. Since this picture was taken, about 4 cars of parking have been converted to right turn only lanes.  It's still got looonnnnng lines,  but it's a huge improvement.