What They Won't Tell You (Hillary on Social Security)

[Monkeyleg]

It's been a long time since you've been around here, CAnnoneer. Welcome back.

Just which politician would you suggest come up with an alternative fuel source? I can't think of anyone serving in congress who has the knowledge to do that.

Of course, there's people in the private sector who can do that, just as there were people in the private sector who made personal computers and internet access responsible for the economic boom of the 1990's. Al Gore notwithstanding, of course.

But these people, and the companies they work for, are constrained by current knowledge of physics, as well as government mandates that they produce Ford Expeditions that get the same fuel economy as GEO Metro's by 20XX.

Do you or anyone else believe that, if a corporation found a way to make cars that ran on alternative energy sources, and which would be appealing to the public, that said corporations wouldn't be pushing them like crazy? The market would be huge.

Correct me if I'm wrong about your post, but you seem to be suggesting that government mandate the advancement of technology, even where such technology does not exist.

[CAnnoneer]

Hi Monkeyleg. Yes, I have been pretty busy, and also got quite sick of liberals, so I kept away for a long while.

The reason why I believe in gov support for fundamental research is because the private sector, with the notable exception of pharmaceutal companies, does not do nearly as much fundamental research as they used to several decades ago. Much more is driven by the bottom line and long-term projects are proportionately less funded than before. I do believe in the force of the free market, but certain technological accomplishments are just too financially intensive and time-consuming to be done by the private sector anymore. Not that they cannot afford it; it is a question of leadership, culture, and timescale expectations.

To convince yourself in that, consider how long it would have taken for the Manhattan Project to be financed and organized by private capital, on the lure of nuclear power for domestic and industrial use, for example. Yes, the gov had thousands of private subcontractors to do a lot of the supply, building, and engineering, but it provided the framework, organization, and most importantly the financial backing and the hard push for it.

From this perspective, controlled productive fusion or a comprehensive list of lesser developments is essentially accessible within the necessary timeframe by a level of commitment that only fedgov can match. All I am saying is it can; whether it would is a different question. Also, there are internal and external interests that fight tooth and nail against it.

Fedgov does not mandate technological advancements or the laws of physics, but it can provide financing, organization, and long-term commitment. Of course, there are no Germans to compete with, so political will is far more difficult to muster and sustain. That is why I am not optimistic for the future of this nation and the world.

[Monkeyleg]

"To convince yourself in that, consider how long it would have taken for the Manhattan Project to be financed and organized by private capital, on the lure of nuclear power for domestic and industrial use, for example. Yes, the gov had thousands of private subcontractors to do a lot of the supply, building, and engineering, but it provided the framework, organization, and most importantly the financial backing and the hard push for it."

If we were at war with Toyota, and facing tens of thousands of US casualties by invading Toyota plants in Japan, that might be an apt analogy.

Whatever your opinions of the bombings of Hiroshima and Nagasacki, the Manhatten project was driven by the need to get The Bomb before our enemies--most particularly Germany--did. And to eliminate the need for a land invasion of Japan, and also to let the Russians know that we had The Bomb.

There isn't such a live-or-die imperative right now regarding new energy technology.

Toyota and Honda are several years ahead of US automakers in the manufacture of hybrid cars. One reason is that the US automakers are strapped for cash because of pensions and other benefits to retired as well as currently-employed workers. Another reason is that consumers simply aren't demanding hybrid cars (except for those who take pride in driving hybrid cars). Lastly, we haven't reached the point where consumers realize a crisis in front of their faces, much as gun owners don't realize the crisis they face until it's too late.

It's not as though we're going to run out of oil as soon as some would say. I read today that Russia was exploring an area of the continental shelf off the country's shores to see if the shelf fell within territorial waters. It's estimated that the oil in that shelf could constitute as much as 25% of the world's supply.

Don't underestimate the ability of the private sector to see a solution to a problem, develop it, and have it ready for market. I'd much rather rely on the private sector than on blowhards in congress.

[CAnnoneer]

With the exploding populations of Asia and Africa, and the modernization of India and China, I believe we have a very real crisis looming on a global scale. It is not that there is no oil out there. There is plenty. But it is harder to get it out and, moreover, get it out fast enough and in good enough quality. I doubt evolutionary solutions will work fast enough.

I agree we are not at war with Toyota. And that is one of my points precisely. There is no real sense of urgency whatsoever. No external pressure to turn the wheels of statesmanship. That lack makes the situation worse, not better. That the president would talk about switchgrass instead of a comprehensive long-term energy policy with the urgency, backing, and attention of the Manhattan Project, is symptomatic to the problem.

The new corporate culture is one of very-short-term save-ass cash-and-run Enronist leadership. It is not the kind of environment that fosters long-term solutions. Also, a lot of the entrepreneureal element is limited to small startups on venture capital, where a 5x return is expected in 2 years, or the plug is pulled. At best, such companies can make incremental improvements in mostly established tech, rather than something fundamentally new that takes a long time to work out. By the comprehensive nature of the problem, comprehesive solutions are required. Producing them through incrementalism will take many years, more than we have.

Finally, market pressures will not be sustained over long enough for companies like that to truly succeed. Was it the Carter administration that spent a lot of money on alternative energy and just when the respective companies were getting somewhere, the OPEC killed them by dropping the price of crude oil.

[tyme]

The reason why I believe in gov support for fundamental research is because the private sector, with the notable exception of pharmaceutal companies, does not do nearly as much fundamental research as they used to several decades ago.

Why are the research labs drying up or shrinking?  Are people with expertise to make real advances in modern technology more expensive to hire?  Were some of the famed research labs like Xerox PARC getting indirect funding from defense contracts during the cold war?  Are companies so mired in regulation that running research is seen as too speculative and damaging to the bottom line?  Do corporate leaders simply not have vision?  Do they not have the necessary management expertise to get useful technologies out of research programs?

[CAnnoneer]

The leadership has become short-term bottom-line. Any CEO who damages the bottom line by investment in long-term projects is more likely to get replaced with a CEO that can show larger gains. There a complex cultural reasons for that, some having to do with growing impatience where greed is not tempered with wisdom. Other reasons are the deep changes since past WW2 in switching the economy from physical production to services and communications. Large investment and a lot of patience are necessary to build a new plant and manufacture products. The same money would produce faster return if put into services (if successful) or speculation. Add to that inherent job drain to low manufacturing costs in developing country due to standard of living, environmental, health, and benefits regulations here, and you start getting the picture.

As far as high tech products go, we live in a very different world than 1950-1970s. The best example is China. They are still not capable of producing particularly high quality products for the most part, but they now have enough knowledge and infrastructure to produce knockoff products that can compete in many markets. Previously they simply could not, so patent protection was not a big issue. Now they can, but there is no patent protection because they blatantly ignore it.

If you are an American company, it might not be financially prudent to invest millions of dollars in developing new products, because the Chinese would produce a cheap knockoff and undercut your market the minute you try to cash in on your investment. Why then would you invest in it as you did before? The answer is you cannot do so as profitably as before. This is true in most branches of manufacturing, perhaps with the single notable exception of medical pharmaceuticals. The Chinese do not yet have the chemical and biochemical industry to do that yet, but one day they probably will.

There are other things that affect the bottom line, which indirectly reduce the financial surpluses that did and would have gone to R&D. Probably the most obvious one is different forms of litigation. Money that would have gone to research instead goes into the pockets of lawyers that sue you or lawyers you hire to protect you from the former.

The list really goes on and on. Our society is SYSTEMICALLY sick. Different maladies have combined to reinforce one another. We need very drastic reforms to survive, but there is no political will to do so. The goons in congress are mostly lawyers. There are maybe 4 PhD's and about 20 MDs among them. The rest is a few economists and the crushing majority are lawyers. Would you believe that somebody like John Edwards would move a finger against litigators if he becomes POTUS ?? Will Hillary slash benefits and start private accounts?? The people that make these decisions are some of the worst parts of the problem in the first place. They will not bet against themselves.

Finally, it is not true that science and technology types are more expensive to hire. If you compare average salaries to those in the 1950s, the pay is less now than it was if you adjust for buying power. If there is an increased expense, it is the amount you need to spend to support the person with equipment and chemicals and consumables once you hire him. Depending on the specialty, it can cost in excess of 300k to support an engineer that you hired for 100k, just as it costs you at least 50k annually to support a gradstudent whom you pay 25k. It has to do with the advanced technologies needed as well as space, services, etc. that have to be provided.