Sustainable Ponzi Schemes

https://en.wikipedia.org/wiki/File:Ponzi1920.jpg Charles Ponzi, 1882-1949 was a swindler who made $millions in the 1920s by promising investors huge  returns if they would send him money to invest.  They did, and early investors did get these huge returns: Ponzi was giving early investors money from later investors.   He didn't invent the swindle that today bears his name, but he was an effective publicist who got caught.  Many people have tried it, both before and after.  Such swindles cannot work over the long term, because eventually you will run out of investors, but they certainly can in the short term.

 Many people have pointed out that US Social Security is such a Ponzi scheme.  Well, yes and no.  If the scheme is set up so that it can never run out of investors, it can run indefinitely, and by doing so, it can generate a lot of value for people in the mean time by using the float wisely.  The stock market, and ultimately, the entire economy are also such schemes.   The trick to success is providing enough of a win that most people agree it's a good idea, while not really hurting anybody in the process.  In other words: truly giving value for money to the investors while not screwing anybody.

 Social Security works because as long as new people keep being born, and retirees eventually die, there is an indefinite supply of new investors to keep up with the growing pool of retirees.  The managers need to keep a positive balance, and to date, they always have.   As I write this, they'll be forced to reduce payments after 2034, but by increasing income a small amount, they'll be able to extend this easily.  Historically, they've mostly done this by increasing the cap on payroll deductions.  It's presently $184,500.  20 years ago, it was $94,200.  CPI over that time grew from 201 to 335, so this is faster than baseline inflation (which would have it at $157K), but not much.

The stock market is also such a "swindle".  Stock shares are ultimately worthless, but because investors have a chance to profit, through dividends, in the success of the underlying company, they'll buy in.  So many people have done this that there's a significant market for companies that do not pay dividends, called "growth stocks", which is entirely supported by speculation in the stock shares themselves.   At present time, the value of these shares (called market capitalization) of the world stock markets is about double GDP for the entire world (called Gross World Product or GWP).    Is this sustainable?  Probably not.  Most billionaires (possibly all) and a lot of millionaires are that wealthy solely because they own stock with that much market capitalization, and for a lot of them, their net worth would be highly negative if they were forced to live on the actual profits of the businesses they own.  This is especially true for businesses like "Private Equity" and "Hedge Funds".     E.g.: Tesla/SpaceX owner Elon Musk owns a $trillion in market cap, but these businesses all together brought in around $8B in profit last year.  And these are companies that are actually producing something.  Elon owns less than 15% of Tesla and 42% of SpaceX, so his actual value is well under $1B.  Hedge funds are even worse:  they produce nothing but the financial return.

 With all this market cap, owners are able to borrow against the asset to buy things, so without actually spending the asset, they are able to buy other things, such as yachts, broadcasting networks, sports teams, etc.  Every time they do this, they dilute the real value of both the shares they own and the things they're buying.   Dilution is very bad for the overall economy, because the people who actually do produce things: the workers, have a smaller and smaller share of the total money supply.  Eventually, there will be a comeuppance, and I don't see it being anything other than very ugly.    Millions will probably die, as died in previous "corrections", such as the English and US civil wars, WWI and II, various revolutions, etc.   

 We need to get this thing in balance.  The Wealth Tax, as proposed by Elizabeth Warren, is one way, but it taxes in a way that's uncontrollable, which can cause unintended harm.   I think income taxes should be very much higher on high incomes (presently capital gains are taxed at less than half what earned income is), and there should be a high tax on borrowing against appreciated assets over some high amount.   (presently it's actually a tax exemption). 

North Shore Boatbuilding

In 1963, my parents went to the boat show (I think it was in the Cow Palace in San Francisco), and my dad bought a boat.  It was a kit, made in England, for a 13'3" sailboat called an Enterprise.  A few weeks later, the kit was delivered to the agent for the western US, a guy called Sam Guild, at a place called North Shore Boatbuilding.

Guild rhymes with Mild, it's not pronounced like guild or gild.    He was from Maine and my parents were from Massachusetts--they had surprisingly much in common, in addition to being New Englanders.  I found Sam's obituary: he passed away in 2009 at 80, having moved back to Maine after less than a decade in California. 

 North Shore Boatbuilding was about 2.3 miles north of Marshall, on Tomales Bay.   Marshall is a tiny town, which only has a population of 400 if you count the numerous dwellings along the shore of the bay there.   We went there to pick up the Enterprise kit.   It was just exactly 100 miles by road from our home in Cupertino.

Over the next few months, my dad built it in the garage.  I helped--A lot I thought, but as I was only 8, probably less than I thought at the time.  It was very interesting and I did learn a lot.   The kit had fairly complete instructions but Dad read a lot of books and other things.  After a few months working on it constantly, nights and weekends, it was ready to sail.  We took it to a lake near home and he and a friend went for a sail.  I was taken out for a sail but was not allowed to help.   A few weeks later, he took me out and did allow me to help (trim the jib) and I figured it out quickly.  Barely a year later, I was given the opportunity to sail in a boat by myself (an El Toro) and I was able to do it.  Not long after that, I took formal sailing lessons at one of the local yacht clubs (Sequoia YC in Redwood City), and learned a lot more stuff.

There were about 10 Enterprise class boats in the Bay area by 1965 or so, all built from kits that Sam Guild had imported from England.  Sam had a good facility, not just for building boats but also for sailing them, and several of the boatowners lived up north, making Sams place a central location, so Sam hosted an Enterprise Regatta every month or so for a couple of years.  I was still too little, so mostly my Mom crewed for my Dad, and my sister and I found stuff to do around North Shore Boatbuilding. I tried fishing several times, and never once caught anything.  But I explored a lot.

 The pier is still there.  It's just south of "The Inn on Tomales Bay".  I can't tell if Sam and Ann's house is still there because the trees have grown up (it's been 60 years...).  There were trees near the water back then, but there was a clearing about 300 feet wide between the road and that grove, which is now all covered by mature trees.   The roadbed for the North Pacific Coast narrow gauge railroad was still discernable in the 60s, even though the tracks had been torn out during the Depression, 25 years earlier.

Sam's obituary mentions an 11 foot dinghy that the Guilds carried around on their camper.   I remember that boat well: it was a "Gull" class, which looked a lot like an Enterprise but smaller.  The Guilds carried it on the back of their Volkswagen pickup truck.   They'd brought it down to Redwood City one time on the back of that, and when heading home, had apparently forgotten to tie it down.   We were following, towing the Enterprise on a trailer.  I saw the Gull take off skyward, and it flew moderately well, coming down for a pretty good landing on its hull.  It suffered surprisingly little damage.

 

This is about half the bay area Enterprise fleet in around 1965.  I think the photo was taken by my dad, but I'm not sure where it was taken.  It's not Tomales Bay, Sausalito, or Redwood City, which I'm quite familiar with.  The boat my dad built is 9606.  Disappointingly, I don't have any pictures of Enterprises on Tomales bay or of North Shore Boatbuilding as it was in the 1960s.

 

Ranking the Presidents of my Lifetime

I find it difficult to choose here between my top 3, so in order of their term:

Eisenhower got many things right, a few wrong.  He supported the Warren court.  He supported civil rights and the overturning of Brown vs Board.   He supported the Coup against Mossadegh in Iran, which has led to 73 years (so far) of bad relations with Iran.

Kennedy.  He was successful mainly because he was Martyred and his successor, LBJ, was masterful at exploiting it.  The worst thing he actually did was Bay of Pigs.  The best was the Cuban Missile Crisis, the space program, and advocacy of what would eventually be the Civil Rights Act.

Obama.  The best president that managed to serve full term.   PPACA was his best thing.  He served in the face of the most hostile congress since the civil war.   Hands down the best orator.

Biden was a better president in most respects than Obama, but he had one monumental failure that destroys him: He held on too long and left the field open to Trump.

Carter could have been a great president but for three things:

1: he had the bad luck of running against Reagan, who lied and cheated to make him seem bad

2: He had some foibles on the Iran Hostage crisis.  Mostly not his fault, but he gambled more than he should have

3: His relations with congress were not the best.

4: (totally not his fault) The holdover from Nixon's OPEC policy and the Iran crisis led to high inflation.  His Federal Reserve Chair (Volcker) cured the problem, but too late for it to do Carter any political good

Clinton: a pretty good president, but he did a lot of stupid stuff that left him open to the Gingrich congress.   Lewinsky and Iraq were /totally/ the doings of the Rs. 

LBJ was actually quite a good president, if you get down to it.  Unfortunately, Goldwater's tactic wound up destroying him in the end.   Johnson understood that expanding VietNam was a huge mistake and that the Gulf of Tonkin incident was nothing, but Goldwater managed to inflate it to something that Johnson could not pretend to ignore.  The Great Society, Voting Rights Act, Medicare, etc., were really good things.   He would be at the top of this list without VietNam.

Ford:  After Ike, the least bad GOP president.   He had the luck to serve in Nixon's wake and looked wonderful by comparison.   He did very little, and was convincingly (and rightly) defeated by Carter.

Bush41: Perhaps the most competent R since Nixon, but mostly a promoter of Evil.  His alignment with the Oil industry being his worst problem.  Clinton mopped the floor with him in '92.  GOP'ers will tell you that Clinton only won because Perot stole votes from Clinton, but the numbers tell a quite different story. 

Nixon.  Corrupt but somewhat competent.  Screwed up LBJ's peace settlement with VietNam to undermine him (and his successor Humphrey)  in the '68 election.  Understood environmental issues better than many of his successors.  Watergate.

Bush43: Incompetent and Corrupt. Knew he was out of his depth, so he hired crooked people to do most of his thinking for him.  Reacted exactly wrong when the CIA told him that Bin Laden was determined to attack again.   September 11 was one of his lesser failings.  Invading Afghanistan was a huge mistake.  Invading Iraq before he'd finished with Afghanistan was a disaster.   (The right solution:  Build and fund schools, and promote small business, with not-corrupt banking.  The military should only be there to keep the teachers (and students) safe.)

Reagan. Trump would have been impossible without Reagan's opening us to corruption.  Reagan was incompetent, corrupt, did lots of stupid stuff (e.g.: he sent soldiers to Beirut, despite repeated warnings.  A truck bomb killed hundreds of them.   So one week later, he invaded Grenada.)  Iran Contra.  There are lots and lots of these.  He had enormous personal charisma, which for those of us with functioning BS meters, is a disqualifier.

Trump.  Incompetent, Immensely Corrupt, Stupid, remained in power by threatening people.   Before Trump, it was a contest between Reagan, Buchanan, Andrew Johnson, and Harding who was our very worst president.  Trump takes the prize in a landslide.  He may have destroyed the United States.  It's possible he will destroy life on earth.

Planets, Moons and Satellites

What is the difference between a planet, a moon, a dwarf planet, an asteroid, a comet, etc?   I'm interested here in objective, unambiguous differences.  Arbitrary distinctions such as the actual mass or dimensions of the object are at best a last resort.

 All of these things are satellites, orbiting a star.  A few definitions are easy to pick off:

 A comet is an object with an orbit so eccentric that the heat and solar wind from the star cause large amounts of detritus to be driven into space every time it approaches the star.   Thus it is possible for a comet to change its status over time: once enough stuff has been blown off, it becomes an asteroid.

 An asteroid is an object which is no longer getting stuff blown off by the star (everything starts out that way) but is small enough that gravity does not deform its shape into a spheroid.

A planet is an object which is large enough that its own gravity has turned it into a rough sphere, and is in orbit around the star itself.   A distinction is made between Planets and Dwarf Planets, in that Dwarfs have not cleared their orbit, where full Planets have.  Factors that affect this include size, distance and eccentricity of the orbit, and distance to the star.  A quite large planet on a very long orbit might not have cleared its space, while a small planet on a relatively circular orbit might have.

A moon is a satellite which is orbiting a planet.  It might be asteroid size or dwarf planet size.  There's an interesting theoretical case where a pair of planets is orbiting each other and the star. There are none of these around our star but it's a case which deserves analysis.  My thinking is that if the Center of Gravity of the combined pair is inside one of the objects, then they are planet and moon.  However, if the second object is large enough and the orbit circular enough that the CG is in the space between, they are both planets. co-planets maybe?

 

The way a solar system forms is that it starts with a mass of tiny particles, chaotically distributed.  They might be individual atoms or molecules, in which case we call it a gas cloud, or it might be larger chunks.  There was some initial event that caused all of these particles to be in one place--perhaps a different star blew up, or maybe something else.  But at the start of the analysis, they are near each other (within a few light-hours?) and moving in random directions, and there are enough of them that all of the particles are in orbit around all of the others.

 Now and then, there are collisions.  If the velocities are different enough, and the collisions are inelastic, the particles lose a lot of momentum, and they fall to a lower orbit.   This quickly causes a clumping of these lower velocity particles, which will tend to be in the center.  When the collisions are elastic, the particles bounce off in a new, highly random direction, but when they are inelastic, and the velocities are similar enough, they'll stick together and form larger and larger clumps.  Most of the particles lose enough velocity through this process that they fall into the center, but a few wind up in an orbit around the central mass.  Based on observations, it appears that nearly half the time, the center is actually several objects, which eventually get big enough they form double or triple stars.   Among the inner orbits, anything that's very far from circular quickly collides with something else, and the new mass adds their vectors to make a new orbit.  If the velocities are different enough, they fall into a lower orbit, or the star.  Large planets tend to attract lots of stuff and grow ever larger, and they also cause perturbations in the orbits of smaller objects, leading, eventually, to collisions.

Anything with an orbit that is out of the plane with the others will eventually have one of these velocity-sapping collisions, so eventually all that's left are things that are mostly in the same plane, or a few things that have managed to miss hitting something bigger to survive for a long time.   The direction is determined by the small statistical differences from the initial conditions.

 There inevitably be some clouds that have too little mass to create a star--these turn into brown dwarf stars or sometimes rogue planets.  There are probably a lot of them out there, but since they do not emit light, they have to block or otherwise interact with something for us to detect them.   A lot of it is simply interstellar dust.  It may turn into something if it collides with other objects or dust clouds, but for now, it's just dust. 

Crick, Watson, Franklin and Szillard

James Watson died yesterday.  He was the last of the people responsible for discovering the Double Helix structure.  Watson and Francis Crick won the 1962 Nobel Prize in Physiology and Medicine for their discovery, which is one of the most important of all time.

There are two other people who deserve mention.  Most people are aware of the previous work done by Rosalind Franklin, who unfortunately died 1958 but would have certainly deserved a share of the prize. 

The other important contributor was Leo Szilard.  Szilard's most famous achievement was realizing that nuclear decay is caused by a neutron chain reaction, and that by manipulating the density of neutron emitters, you could control the rate of nuclear fission, right up to, and including a runaway explosion, which became known as the Atom Bomb.  Fermi's experiments a few years later led to the first Nuclear Pile in 1938, and in 1945, the first Atom Bomb.  Szilard intentionally kept his idea for the bomb secret because he was terrified of the Nazis getting the A-Bomb first, but he and his friend Einstein wrote a letter to Franklin Roosevelt, which motivated the creation of the Manhattan Project.  Szilard and Einstein were specifically kept out of it to try to keep the Nazis from pursuing the idea.  Turned out Hitler regarded this stuff as "Jewish Science" and had effectively blocked progress in his country (Szilard and Einstein, along with Openheimer, Fermi's wife, and many of the others involved were Jewish), but he had no way of knowing that, having fled to England in 1933 and America in 1938.

 Szilard's contribution to the discovery of DNA were severalfold.  He invented the electron microscope in 1928, which made it possible to see some detail in chromosomes for the first time.   And it was he that devised the XRay diffraction technique which Franklin and others would use to work out the physical structure of DNA.

I regard Szilard, who died of a heart attack in 1964 at age 66, as perhaps the greatest scientist of the 20th century, in a league with only Einstein, Tesla, and Louis Alvarez.  

Geothermal vs Ground Source Heat Pumps

This entry is about an important point of terminology--and a short discussion of each.

Geothermal energy is a way of extracting heat from the earth.  Usually, this is heat from a volcano or geyser or other feature of the earth's surface that brings very hot material close enough to the surface that it's practical to extract energy from it, and either use it directly or turn it to electricity with a steam turbine or other mechanism.  The number of spots where mother nature has been cooperative enough to make this practical are relatively few--consequently, geothermal energy isn't viable in a majority of places.  There is a vast amount of heat down there, far more than we could ever use.  But there have been many attempts to drill down to it, and so far, all have failed.  It's only practical where geology has made an opening for us.

There is a significantly different technology which is often misleadingly called geothermal.  A more accurate name would be a Ground Source Heat Pump.  This technology takes advantage of the fact that large masses of soil, stone or especially water tend collect and store heat, and remain stable year round, at whatever the average temperature is.   This tends to be about 50F or 10C, although many factors affect this.   By passing liquid through it, a heat pump can extract the energy from this and use it to provide heating in the winter and cooling in the summer.   This has enormous efficiency advantages: to cool a space to 70F when it's 90 outside and the ground is 50 takes no energy at all, except for whatever is needed to power the pumps and heat exchanger, while heating above 50 when it's cold outside takes a lot less energy than heating above (say) 10F, a temperature at which heat pumps are very inefficient.   All it takes is some plumbing, buried deep enough and spread out enough to take advantage.

 

 

Al Gore was an early adopter of a Ground Source Heat Pump system in his Tennessee home, and spoke of it often during his presidential campaign, usually calling it Geothermal. 

 

Geothermal energy is one of the very few sources of energy that is not really just a way of extracting solar energy that's been stored up over time.  It's actually heat that's either left over from the formation of earth, compression by gravity, or nuclear reactions (both fission and fusion) occurring deep within the earth's core.  Ground Source, as well as wind, photovoltaic, fossil fuels, etc., are ultimately ways of using the energy from the sun that's stored up by the earth somehow.   e.g.: chlorophyll turns  CO2 from the air into cellulose and other burnable materials, which can be burned to get energy--either by burning it directly, or waiting until heat and pressure from the earth has turned it into fossil fuels over millions of years.  E.g. wind is air movement caused by the differential heating of the surface of the earth by the sun.

Hyperloop Criticism

There are plenty of difficulties with getting a hyperloop or other vactrain system installed, but none of the criticism I'm seeing of the concept is correct.

For example, they give the example of a tank truck that is evacuated and is crushed in a fraction of a second by atmospheric pressure.  This is a shockingly poor example.  These tanks are intended to be filled under positive pressure, and the metal cylinder has thin walls (1/8" or so) which can hold the load because they are loaded in tension, but not in compression.  Any competent engineer would simply make the wall thickness sufficient to sustain this pressure.  This varies with different tube diameters but Musk's original paper did some calculations on this and it's a half inch or more.

This same thing would also make the pipe immune from most forms of attack from terrorists.  It would take a gun caliber 2" or bigger to punch a hole, or a pretty large focused explosion, through a pipe this thick.

Even if the pipe is punctured or develops a leak, all that happens is pressure is lost, and the vehicles within slow down and air friction increases.

Their solution for earthquakes is also simple and effective.  The pipe is attached in a way that allows its support to move on the pipe.  For quakes with movement up to  the compliance of the mechanism, nothing will happen at all and operation can proceed unaffected.  This is well over magnitude 6.  For a bigger quake, there's a chance the travel of the mechanism will be exceeded.  This won't break the pipe but there may be damage.  Vehicles in operation would slow down and might need rescue, but it's hard to imagine a scenario where an earthquake, even of magnitude 9 or more, actually killing hyperloop passengers.