All posts by Sam Dinkin

Media Criticism

Stop Building Houses? Huh?

In today’s Wall Street Journal I find this gem:

Maybe home builders should knock off work until spring.

Pillory OPEC for not raising oil production and pillory home builders for producing too much?! And another:

“If people stop cutting prices, that’s actually good [for builders],” says David Goldberg, an analyst with UBS Investment Bank. “If everybody does it, it works. If one builder does it, it doesn’t.”

If OPEC conspires to raise oil prices, it’s evil, but it’s OK to conspire to keep housing prices up? This is bad reporting.

It’s in each builder’s interest to keep building as long as their cost to build is lower than the expected sale price and the cost of capital for keeping the house on the market for longer than historical averages (and at higher interest rates than before the credit crisis). They will continue to build and prices will continue to fall. It probably won’t be a sellers’ market in housing in many parts of the country until 2009 or 2010. While builders continue to build, the 10-month supply of houses will only slowly drop and prices will also only drop slowly. If it made sense to build houses at 50% of current prices in some markets, there will be building for a while especially with labor and materials less scarce given that the peak of the housing boom is over.

Lower housing prices will make houses more affordable and stoke demand. That is what media should anticipate: a smoothly functioning market because the market price isn’t too high to sell anything. Not a way to repeal the Law of Supply and Demand.

Popular Culture

Spacemail Act is Key to Energy Security

All things green are getting a thorough look with oil poised to bust through $100/barrel as Russia, Venezuela, Iraq, Iran, Nigeria and other major exporters view high prices as a time to reap profits and consolidate political control rather than feed the goose that is laying the golden eggs–i.e. invest. One hope for cheap clean energy (energy independence is at our fingertips if we decide to widely deploy coal-to-liquid technology used by SASOL in South Africa and is estimated to cost $35/barrel by Wikipedia) is space based solar power (SBSP). But Taylor Dinerman gets to the key roadblock to SBSP in his Space Review article today, “The chicken and the egg: RLVs and space-based solar power”:

The SBSP Study Group universally acknowledged that a necessary pre-requisite for the technical and economic viability of SBSP was inexpensive and reliable access to orbit….

Phase one proposes a strategy that will

War Commentary

Police Work Won the War

In Iraq, databases of DNA, fingerprints and iris scans have been collected from entire city populations. They brought in ballistics and other forensics experts. They train troops in staying alive and police in evidence handling. They conduct IED clearing operations. They analyze the IEDs. They analyze, profile, they catch in the act sometimes via UAV and roll up the cell.

Then they do it again when the cells evolve to foil the latest counters.

Political Commentary

Advice for Giuliani on Space Policy and Politics

My father the presidential election historian thinks that 9/11 is your best head-to-head issue against Clinton. Play this up. In general, hit the main themes of your campaign. View space policy as a highly scrutinized metaphor for the other 99% of your domestic and international policies. Here are some 9/11 talking points.

  • Focus on space for visual and signals intelligence to prevent the next 9/11
  • GPS as a force multiplier
  • Condemn Chinese use of anti-satellite weaponry by China
  • Note that the Taiwan straits and the demilitarized zone between North and South Korea are quiet now, but it’s possible they will flare up in the next 8 years so we need to build on our military space strengths
  • Resurrect Reagan’s flair for demonizing the Russians as part of your space platform. As Machiavelli says, “[A freed animal that was] brought up in prison and servitude … becomes prey to the first one who seeks to enchain it again.”
  • Advocate awareness about a space 9/11 (don’t speak purple prose here–your security firm can brief you) and the ability to cope and quickly recover from such a crisis

Frontier spirit is a traditional Republican (and Democratic) value; sticking to science, technology, the environment and international cooperation when talking about space is a mistake

  • Note that space is the new frontier and its inevitable (far) future for expanding the sphere of freedom
  • Visit Williamsburg and talk about how Jamestown was settled and how the frontier spirit is alive and well in America and how 400 years from now the Moon and Mars will be settled

Fiscal conservatism is a winning electoral issue (despite it being very bad public policy)

  • Endorse some of the Aldridge Commission recommendations, but disclaim those that will implicitly hurt jobs in the states you are intending to win
  • Tell NASA that you want them to undertake hard problems (quote Kennedy’s Rice speech) and trust the private sector to deliver cargo and people to Earth orbit; note that sometimes the Russians have good ideas we should copy like harnessing capitalism for orbital spaceflight; perhaps do this standing next to Elon Musk and Gov. Arnold on a fund raising trip to LA after you’ve captured the primaries, but before the general gets into full swing. Musk’s factory is next to LAX. Don’t put on bunny shoes.
  • Talk about working smarter and shrinking NASA through attrition–don’t create enemies by firing people

New space gets tons of media coverage and is a feel-good entrepreneurism story

  • Make fun of the new race for the next humans to set foot on the Moon and suggest that you’d like to see Google offer a prize to the winner of that race, too (on top of their rover prize). Hinting at privatizing their private billion dollar NASA airstrip and campus boondoggle is unwise. The campaign website might become harder to find on a Google search. Compromise by meeting them in a swing state.
  • Praise Bob Bigelow and express interest in the next US space station being leased. Arrange to shake hands with him in Nevada. Don’t put on booties.
  • Before the general election arrange to shake hands with Burt Rutan in New Mexico
  • Envision a time when the President will make 45-minute flights to Tokyo in a later-generation suborbital spacecraft that is as safe as Marine One, the first presidential helicopter in 1957 perhaps with Rutan
  • Arrange to shake hands with Peter Diamandis of ZEROG and Space Adventures in Florida at the Cape–don’t put on a bunny suit or fly in ZERO G; hard to get only good photos
  • Visit Air Force Space Command
  • Visit Space Explorers headquarters in Wisconsin, shake hands with George French and talk about the importance of space to motivate kids to learn about science, technology, engineering and math

But don’t overdo it.

  • Don’t spend more than 1-3% of your words or appearances on space issues
Political Commentary

Reframing CO2 Reduction

There’s no way countries that are growing their economies the most will agree to stringent caps on carbon dioxide emissions based on historical levels. This historical-cap framework rewards the countries that have shrinking populations and manufacturing. Instead Canada (as also noted in today’s WSJ) and others are focusing on CO2 intensity. E.g., how much CO2 is produced per kwh of electricity generated or per barrel of oil pumped? These are measures that don’t hurt production and labor mobility. Some say they don’t have bite. But if a CO2 reduction policy bites too much (pun intended)–especially in a way that caps economic growth–then the growing polluting countries will ignore it.

War Commentary

Famous Last Words

Are we too cheap to stop asteroid strikes? You decide:

Scott Pace, head of program analysis and evaluation at NASA, said the agency could not do more to detect NEOs “given the constrained resources and the strategic objectives NASA already has been tasked with.”

If there is a one in 26 million chance that an asteroid strike will kill everyone in the world, that’s an expectation of 230 deaths per year. That’s within a stone’s throw of the average number of deaths from terrorist attacks on US soil in the last ten years. It’s interesting to watch the difference between overreacting to terrorism and underreacting to understood harms such as auto accidents.

Not that I think war in Iraq was a bad idea, just that ‘War on Terror’ is an inapt name. The operation name ‘Iraqi Freedom’ was more apt.

Technology and Society

Richard Garriott: Space’s Next Generation

garriott.jpg
Here’s Richard Garriott on a recent Austin ZEROG flight

Fellow Austinite Richard Garriott talks more in the December issue of PC Gamer about his upcoming trip to space:

I grew up with an astronaut father, and space has been my pinnacle interest since I was young…. the probability of me going [to space] the same way my dad did was zero….

Since earning my earliest profits in the games industry, I have been investing in privatizing space….

Here’s how he enabled Dennis Tito to get into space with his investment in Space Adventures.

I am also involved in Zero G, which has given me a taste of what I might experience in space. Zero G uses a modified Boeing 727 to take people on parabolic flights into microgravity. Anyone can book these flights and I tell you, it will change your life. People get giddy on these flights; they experience true happiness and living in the moment. I enjoy these flights so much that I recently chartered four of them to help promote the release of my space epic MMPORG Tabula Rasa. And my experience on them solidified my desire to get private citizens into space as well–even those without bazillions of dollars.

… I am lucky enough to be able to go into space myself through our work with the Russian Government! Earlier this month, we announced that I will be going into space as the seventh private space explorer, and the first second-generation astronaut, next year. I can’t tell you how excited I am about this. But I’m still my father’s son[;] I will be part of a team conducting experiments and bringing back new knowledge and data concentrating in four areas: commercial, educational, environmental, and artistic. This isn’t just a joy ride for me; it’s something I need to do.

Amen on the ZEROG flights.

There’s a little more in his trip-to-space blog.

Economics

More on Specialization

Rand observed that “one of [his] biggest mistakes in life was not recognizing early that the most effective way to achieve my goals would have been to get wealthy first, then to apply that wealth toward them”. The basic economics point is that if you earn as much money as possible by specializing in what the economy will pay you the most for, you can often hire a specialist to do far more good with the money you made than you could have doing the good personally.

Another way to state this is doing nice things is fun; nice is an economic good. So if you want a pleasant job, other people who like pleasant jobs will compete and drive the price down until the low pay makes it unpleasant enough to clear the market.

This makes Bill Gates’s career change to spend his fortune a global tragedy worse than the monetary damage of Hurricane Katrina. He is likely to be much closer to average in his ability to make the world better by giving, compared to making the world better by making better software and operating systems.

The salary offered to you for different occupations summarizes what the economy values most from you. Accountants and lawyers may seem less useful than teachers and engineers, but that is a fallacy of confusing the average value of a teacher–which may be very high–to the market price of a teacher which will be much lower if there are lots of people who want to be teachers.