Thursday, July 17, 2008

Robots building robots building desalianation plants, space elevators, solar system mining and farming operations,...

Adding some things to the list of great leap technologies that could potentially (and I stress potentially; these are far from sure things, at least within the next few decades.) put way off resource related growth constraints is robots building robots. Once this was able to be done well, the robot population could grow exponentially with little or no human work on their production necessary. We could largely just sit back and let this population of loyal, tireless workers grow throughout the planet, and perhaps throughout the solar system.

What would they do? How about building thousands of large scale space elevators for mining, teraforming, and then farming the solar system, and for constructing an orbiting system of solar power plants, as I mentioned in my last post, to provide all of the power we could ever need with no pollution, and no running out of fuel, for as long as the Sun lives, which is billions of more years.

How about building a network of thousands of desalination plants, and pipeline and drop irrigation systems to expand food production many fold, and to also greatly expand the amount of habitable land, and then constructing housing and infrastructure on that newly habitable land.

These are great leap ideas that I have mentioned in the last two posts, but they are not that unlikely to occur, at least to a large extent, given enough time. Of course, the much sooner, the much better, so I hope we elect as few Republicans as possible so that we can invest as much as possible in making these things happen.

These great leap advances require heavy investment in basic scientific research, the kind that the free market will greatly under provide, under distribute, and under utilize due to long ago established (in scientific academic economics) free market problems, such as inability/impracticality to patent, externalities, inability to price discriminate well, asymmetric information, and more. And, in general, simple-minded Republican slogan economics greatly hurts investment in high return social projects, and economic growth over the long run, so I hope we vote out large numbers of Republicans this November. With global warming and everything else, we may really need these kinds of advances -- An Apollo Program or Manhattan Project for Renewable Energy? No, say the Republicans. Big government bad, Ugh, Ugh. Small government good, like in 1810.

Space Elevators, Skyscraper Farms, and Other Potential Great Leaps to Put Far Off Resource Limitations

In response to the running out of stuff on the planet concerns, these concerns have been around for hundreds of years, and now the population is many many times bigger, and yet we have way way more stuff per person. People eat and live far better. Technological advance has allowed us to get way more food and other material things out of the planet and to recycle far better. But will this continue for much longer? Here's two things that might provide a tremendous leap forward in our available resources.

– Space Elevators

– Vertical, or Skyscraper, Farms

I read a fascinating book by NASA scientist Brad Edwards. Dr. Edwards, who holds a Ph.D. in Physics from the University of Wisconsin – Madison, was in charge of a NASA study on space elevators. His book, The Space Elevator: A Revolutionary Earth-to-Space Transportation System (2003) describes how recent technological advances, especially in super strong and light nana-tech materials, may have now made space elevators feasible.

A space elevator is basically a long ribbon, or set of ribbons, made of a super strong nano material that extends from a base station on earth up to a base station in geosynchronous orbit. Large platforms ride up the ribbons into space via rollers on both sides of the ribbon. This method would potentially bring the cost per pound of putting material into space to a tiny fraction of what it is currently. Dr. Edwards predicts that this could eventually lead to a network of orbiting solar stations that could provide all of the earth's power for as long as the Sun lives – billions of years. Note; in orbit, without the atmosphere screening the sun, solar energy plants could produce far more power, and they would beam it to earth, in this idea, via microwaves. Dr. Edwards also forecasts many potential amazing things like mining asteroids and tera-forming planets (changing their atmosphere, temperature, composition, etc., by such things as steering comets into them). So, for example, Mars could become a giant farm.

The second big idea thing I refer you to is Vertical, or Skyscraper, Farms. These were featured just two days ago in the New York Times article, "Country, the City Version: Farms in the Sky Gain New Interest". Even today, they aren't nearly as expensive as I would have thought. The big idea here is that we live on a sphere, the Earth, but we only use the stuff at the very surface of that sphere, which is a tiny fraction of the total volume. If we could pull out soil and minerals from deeper down and put them in skyscraper farms, we could potentially increase the food supply many fold. An orbiting solar power network could provide massive amounts of free clean power for additional lighting from plant florescents throughout the hydroponic gardens of these skyscraper farms.

One of these days, years, decades, I will be able to spend time to do a detailed write up on these issues, a blog post and/or article. There are many fascinating things, like the above, which could have a great effect on our future. I already discussed another one in my June 23rd blog post. Quoting myself:

...a huge issue which could really change things in as little as the next 10 or 20 years is advances in video conferencing and other telecommunications. It's possible that in 10 or 20 years video conferencing could get so good that 25% to over 50% of skilled jobs could be done from anywhere. You could imagine say business managers or engineers communicating with each other via life-size ultra-high resolution monitors with an array of extremely accurate computer controlled mobile cameras and microphones. And you could imagine this and much more amazing telecom equipment being relatively inexpensive.

At that point, many or most skilled people could do their jobs from home anywhere, in Oak Park, Michigan, Podunk, Nebraska, anywhere. And if they didn't want to work at home, they could work in a Kinkos rent-an-office, or small satellite office, or complex, anywhere. When this happens it will really change society. It will make it so that homeownership makes sense for many more people, as you typically have to live in a home for at least 3-5 years without moving for it to make economic sense. Extended families will be able to stay together, rather than parents having to move far from their parents, siblings, and old friends for work. There will be a great savings in energy and decreases in pollution. The implications are huge. This is certainly something academics should be studying heavily for many reasons, one of which is, with the great net positive externalities, how, and how much, should the government be supporting this, the advancement of these telecom technologies.

Sunday, July 13, 2008


In response to Bruce Wilder's comment on Economist's View,

I meant that I thought Mankiw supported Republicans because he was Libertarian on economic issues. To support Republicans he clearly must have cared far less about social Libertarianism. I modified my blog post to make this point explicit.

Another reason for Mankiw's puzzling support of Republicans, a rarity among successful academic economists, may be that he has what I would call, "Slipperyslopeaphobia", an irrational or just highly exaggerated fear of slippery-slopes, like if we have any social programs, even ones which are clearly shown to be tremendously high return and sensible, there's a great risk that we'll fall down the slope and go to stifling socialism. But history shows with very rare exception that people are able to do a relatively moderate amount of things without then falling to a Koo-Koo extreme (and when they do it's usually relatively temporary if not enforced by a brutal undemocratic regime). We've had public schooling for about 200 years, and we haven't gone communist. We've had the New Deal more or less for 70 years, again no communist dictatorship. We've had some restrictions on free speech and expression always, and we didn't go down the slope to Stalinism. In fact, we've with ups and downs over the long run gone up the "slope" to greater free speech and expression. People aren't complete idiots; if we go too extreme, the costs start to become ridiculously obviously greater than the benefits, and people vote to pull back. But a lot of people still have Slipperyslopeaphobia.

Of course, another reason for Mankiws support of Republicans may be that he's just Plutocratic, or just hates it when anyone takes his money, even if it increases the total pie, and the net quality of his own family's life. I'm not saying Mankiw's necessarily like this, but I have no doubt that a lot of Republican activists and politicians are.

Greg Mankiw's Spin on Economist's Views on Economist's View

With regard to Gregory Mankiw's article, "What if the Candidates Pandered to Economists" featured on Mark Thoma's Economist's view blog, I think it's important to note first that his actions and writings demonstrate that he has a clear Libertarian bent, but he's also very intelligent and expert in economics. So, from that I deduce that he knows that many Republican policies can be very inefficient and very much reduce growth, total wealth, and welfare, but he's willing often and to a large extent to sacrifice that to have less government restrictions of (economic) freedom, less of the government forcing people to spend money on things through taxation. Although, obviously, when it comes to social, as opposed to economic issues, the Republicans are much less Libertarian than the Democrats, but for a lot of people, economic Libertarianism is the more important, and some people like Grover Nordquist are downright monomaniacal about it.

Therefore, he has worked for and supported Republicans, even though, for example, he has admitted in his 1998 textbook "Principles of Economics" (pages 29-30) the following:

Thinking Like an Economist:
Why Economists Disagree: Charlatans and Cranks:

An example of fad economics occurred in 1980, when a small group of economists advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue. They argued that if people could keep a higher fraction of their income, people would work harder to earn more income. Even though tax rates would be lower, income would rise by so much, they claimed, that tax revenue would rise.

Almost all professional economists, including most of those who supported Reagan's proposal to cut taxes, viewed this outcome as too optimistic. Lower tax rates might encourage people to work harder, and this extra effort would offset the direct effects of lower tax rates to some extent. But there was no credible evidence that work effort would rise by enough to cause tax revenues to rise in the face of lower tax rates.

George Bush, also a presidential candidate in 1980, agreed with most of the professional economists: He called this idea “voodoo economics.” Nonetheless, the argument was appealing to Reagan, and it shaped the 1980 presidential campaign and the economic policies of the 1980s....

People on fad diets put their health at risk but rarely achieve the permanent weight loss they desire. Similarly, when politicians rely on the advice of charlatans and cranks, they rarely get the desirable results they anticipate. After Reagan's election, Congress passed the cut in tax rates that Reagan advocated, but the tax cut did not cause tax revenues to rise. ... tax revenue fell... government began a long period of deficit spending... largest peacetime increase in the government debt in U.S. history.

Fads can make experts seem less united than they actually are... when the economics profession appears in disarray, you should ask whether the disagreement is real or manufactured... [by] some snake-oil salesman who is trying to sell a miracle cure...

End Quote

In a textbook it's very professionally embarrassing to go along with ridiculous Republican claims, but putting subtle biases in a newspaper article with misleading statements and omissions is another story, so it's no surprise that Mankiw leaves out certain opinions of economists that go against his Libertarian philosophy.

Perhaps the biggest and most prestigious recent survey of economists was done by Robert Whaples of Wake Forrest in the Fall of 2005. A summary of the survey, along with links to the full results, is in Dr. Whaple's November 2006 Economists Voice article, "Do Economists Agree on Anything? Yes!" .

It appears likely that Mankiw saw and used these survey results in his article because of the size and prominence of the survey, and also because of his reference to the AEA and use of the term "Energy Taxes" as opposed to carbon taxes.

Let's note some things Mankiw left out, or Obfuscated, from that survey:

He writes, "On many issues, from universal health insurance to increased taxes on the rich, economists do not speak with a single voice. But on some issues we do. Here is an eight-plank platform designed to attract a majority of economists.", but the Whaple survey shows 54.3% of economists disagreeing (and only 35.7% agreeing) with the statement, "The best way to deal with Social Security's long-term funding gap is to move to mandatory personal accounts invested in the market.". Why was opposition to privatized social security left out of the economist's platform? Mankiw said the platform was designed to "attract a majority of economists", and a clear majority of economists agree with that position.The survey also found 60.2% of economists disagreed that, "The U.S. should eliminate inheritance/estate taxes.", with only 34.9% agreeing. Again, left out, no opposition to eliminating the estate tax in the platform.

I would also note that 45.8% of economists in the survey agreed (with 38.7% disagreeing) with the statement "The U.S. should adopt universal health insurance.", not a majority, but a strong plurality. Personally, I would bet, though, if just top economists with special expertise in health care were surveyed the percentage supporting universal health insurance, or health care, would be far higher, and most of those disagreeing would really be doing so on Libertarian, not wealth or welfare grounds.

On the other hand, it should also be noted that strong majorities of economists in the survey favored school vouchers and ending the government's postal monopoly. These are Libertarian and Republican positions, and Mankiw didn't include them in the platform either. And the positions he did include that were in the survey had the strongest support, so the article wasn't that biased, but, overall it did mislead somewhat towards Libertarian/Republican positions.

Note: This is, and will be, true of all of my posts: I will not hesitate to constantly polish, correct and otherwise improve them over time, so the post today may have some differences with the same post yesterday. I don't put in cross-outs because this would hurt the readability, and often a lot. My main goal is to teach, to illuminate, clearly, not to display a personal journal as it actually unfolds over time.

Friday, July 11, 2008

A Very Important Little Known Fact about Universal Health Care

There's a crucial little known fact that Paul Krugman and everyone else for universal healthcare needs to know:

The bill for it can be structured so it's not filibusterable.

So it only needs 50 votes (with a Democratic vice president to break the tie).

It's therefore far more realistic to achieve than people think, and we don't have to compromise and not have a true universal health care plan as Obama has done at least so far (although he's said things to leave himself wiggle room to propose a true universal healthcare plan after being elected.)

New Republic Senior Editor Jonathan Chait describes this in his 2007 book, "The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics" On page 204:

Perhaps the most incredible thing about the [1993 Clinton] health care debacle
is that the Democrats could have avoided the filibuster that ultimately killed
the reform if not for the stubborn insistence of one senator – a liberal
Democrat, at that. Passage would have been all but guaranteed if the senate had
included health care as part of a "reconciliation bill". This is a senate term
for an annual piece of legislation dealing with the budget. A reconciliation
bill, unlike any other, cannot be filibustered and therefore can pass with a
simple 51-vote majority. Given that the Democrats controlled 57 senate seats,
the numbers would have allowed for easy passage even with a half dozen

Yet the Democrats did not do this because West Virginia's
Robert Byrd adamantly refused. Byrd was an old fashioned New Deal Democrat who
supported reform but cared more about the traditions of the Senate than anything
else. He was given to interminable speeches quoting Cicero and other orators of
antiquity, and his sense of importance exceeded even Moynihan's. Byrd objected
on the grounds that reconciliation bills could be subjected to a twenty-hour
debate limit, and he felt the issue too important to be so circumscribed. He
would not budge in the face of pleas from Clinton and his fellow senators, and
his ability to tie the senate in knots if so inclined deterred the Clinton
administration from crossing him. In the end, Dole spearheaded a filibuster that
killed the potential reform.

See also, the Washington Post article from March 14th, 1993, "Shortcut for Health Care Plan Blocked".

As I've written before, enacting universal health care would create such enormous political capital, it would be well worth making any enemies in the Senate. And once it was enacted, like old age Social Security and Medicaid, people would clearly see how much better off they were with it than before, and the Republicans would (probably) never be able to get rid of it. It would be political death, another third rail of American Politics. So there's no need for a hopefully new Democratic administration to be scared to go for a true universal health care plan. I hope everyone in a new Democratic administration understand this.

Important Addition:
After looking into this further, Jonathan Chait, normally a good source, may be misleading here or incorrect. Senator Robert Byrd wrote a senate rule which was passed in the 1980s which allowed objections to be raised for reconciliation bills when "extraneous" material is included; ostensibly, "extraneous" means no budgetary impact, but how exactly a law will be interpreted is often unclear; it depends on past cases (precedents), legal principles, some established over centuries, and other things, so it is often difficult for a laymen to predict how the law will be applied in a specific instance, and it requires a legal expert, perhaps even a legal expert who specializes in that specific area, and is very good.

I've done a good deal of reading on filibusters, but this is a fine and difficult legal point, and to really get a clear idea of whether a universal health care plan would be able to avoid filibuster, or whether perhaps some parts of it would, while others would require 60 votes, requires an expert specializing in this area of the law.

Wednesday, July 9, 2008

Capital Gains Tax Cuts Decrease Revenue over the Long Run and Hurt the Economy

With regard to Mark Thoma's July 9th post, "A Disgrcae?":

McCain: "Every time we cut capital gains taxes, there has been an increase in revenues."

This is false in the long run. It's very misleading. I have a short article explaining why, which I wish the Obama campaign management would read. Here is the abstract:

In the long run, and overall, capital gains tax cuts, do in fact cost the government a great deal of revenue, even though in the short run total revenue from capital gains taxes may go up. The first reason for this is that, unlike the income and payroll taxes working Americans pay, investors get to decide when they pay capital gains taxes. If Paris Hilton owns $100 million in Hilton stock, and it goes up to $120 million, she has a $20 million capital gain, but she will not pay taxes on this gain until she sells the stock, which may be many years later.

When there is a cut in the capital gains tax rate, there is an incentive to sell the stock then, and get the lower tax rate before a new administration raises it again. Thus, when the capital gains tax is cut, there is a rush of investors selling stocks to pay their capital gains taxes now, when the rate is law, rather than later later when the rate may be raised back up. Capital gains tax revenue to the government, thus, may go up now, but it will go down later, and it will go down overall.

In addition, when capital gains taxes are cut, there is an incentive to pay CEOs and top managers more in stock and options and less in regular dollar income, so as to capitalize on the lower tax rate. This would raise capital gains tax revenue to the government, but lower income tax revenue by a greater amount.

Finally, capital gains tax cuts tend to occur during periods of Republican control. These periods, unfortunatly, have been shown to result in drastic increases in income inequality – today there is more income inequality than at any time since the Guilded Age. With so much income shifted towards the wealthiest Americans, capital gains can increase, as they own the vast majority of stock, but at the same time these policies have resulted in stagnant or declining real wages for the rest of Americans, lowering income tax revenue, and contributing to the record budget defecits we have seen in conservative administrations.

Monday, July 7, 2008

More misleadingness from the pressure to write with "good style"

When celebrated Princeton Economist Paul Krugman in his column today wrote:

"Yet even liberal economists have a hard time arguing that Mr. Bush’s cluelessness actually caused the poor economic performance on his watch. Tax cuts didn’t work, but they didn’t create the Bush bust. So what did?"

I really wish he would have emphasizes the "on his watch", and noted that the diversion of over one trillion dollars away from investment and into consumption, of yachts, mansions, super luxury automobiles, and other consumption goods, from the Bush tax cuts will cost American economic growth greatly in the future.

Krugman probably didn't explicitly mention this because he though it would clunk up the flow and "focus" of his writing. As I've said many times, sadly, so much learning is sacrificed and misunderstanding created because of the pressure to write with what's considered good style. Although, in this case, Krugman also justifiably places a high priority on having his writing be entertaining, so that more people will read it, and he will thus be able to convince more people to support good things. And, smoother writing is usually more entertaining to read. It's something that should definitely be considered if you're trying to optimize the amount of good you do, although it's only one of many factors.

Sunday, July 6, 2008

Especially when it comes to valuing families, actions should speak louder than words

Thanks to Mark Thoma for pointing out the important Los Angeles Times article by Peter Gosselin "Working without a net", and his new book, which I've ordered, "High Wire: The Precarious Financial Lives of American Families".

Republicans, and their ideology, have for the most part controlled government for the last 28 years. That's a very long time, and in it they have aggressively attacked, and in many cases decimated, the financial security of American families in every area, from medical care, to consumer protection, to most of our young people graduating with heavy, or in many cases crushing, student debt, making them reluctant to take risks and innovate, as well as to have children. Republicans put on an act that they value families, but their actions tell a very different story.

There is so much to add to Goslin's article. A great place to start is with Yale Political Scientist Jacob Hacker's book, "The Great Risk Shift". For something quicker, there is Harvard Bankruptcy expert Elizabeth Warren's 19 page, "Testimony Before Senate Finance Committee, May 10, 2007, The New Economics of the Middle Class: Why Making Ends Meet Has Gotten Harder". And for a particularly outrageous example of the results of Republican Ideology, there is the December 10th, 2006 Los Angeles Times article, "So you think your 401(k) money is safe". Finally, One more article I'd like to add, that I especially hope anyone considering voting Republican will read, is the May 4th, 2008 New York Times article, "Even the Insured Feel Strain of Health Costs".

Some will argue that things like globalization and a changing economic structure are responsible for the appalling level of financial (and medical and other) danger American families now face. There is some truth to this. But the more we elect Democrats, the more there will be measures to alleviate these risks; the more we elect Republicans the more there will be aggressive efforts to make them much worse.

Republicans will say that any government action will hurt the economy, but that's not what happened when the New Deal was passed over their vehement objections. The opposite happened. We entered a golden age of widespread economic growth. Republicans aren't much for science, evidence, and thinking when it goes against their ideology, but the economics community has proven long ago that there are many situations and ways where a government role can add greatly to efficiency, wealth, and welfare.

Friday, July 4, 2008

Especially on the Fourth of July, let's really think about choosing the candidates who would actually do the most good.

I hope the public learns from this. We've got to stop being so superficial in how we choose our elected officials, and start choosing them based on how much good they'll actually do for our families, the country, and the world, and that means their stands on issues, their policies. After superficiality in voting got us W. -- choosing a president based on who's more fun to have a beer with?? -- there has been a lot of learning, but unfortunately not enough. Many hard core progressives chose Obama over Hillary, even though she had a true Universal health care plan and Obama didn't, and was more progressive on almost every issue. Some chose Obama because they thought he was more electable (which is debatable), but others, unfortunately, chose him for his persona, or put great weight on reasons other than who would actually do the most good, in this extremely important election.

Nonetheless, Obama is obviously immensely better than McCain, and still a good candidate.

Especially on the Fourth of July, let's think about voting for the candidate who will do the most good, rather than the one who has the best persona, or who we think has the best character. I know many people who have great character, but I wouldn't trust them for a second to manage my family's life savings, because they understand little about finance and economics. I know others whose character is beyond reproach, but I would never trust them with the decision of whether to send my son off to war.