Category Archives: Economics

Time For Space Solar Power?

There’s certainly no reason to think that much has changed based on this latest call for it:

PV technology has improved considerably since this idea was developed adding to the argument that this source of energy should be revisited. In addition, the economics of the cost of energy have changed. According to Dr. Neville Marzwell and his colleagues at the Jet Propulsion Lab, an SSP system could generate energy at a cost including cost of construction of 60 to 80 cents per kilowatt-hour at the outset. He believes that “in 15 to 25 years we can lower that cost to 7 to 10 cents per kWh.” The average cost of residential electricity was 9.86 cents per kWh in the U.S. in 2006.

The problem (as always) is that this doesn’t account for the costs of competing energy sources dropping even more. And of course, the notion of building SPS with the existing space transportation infrastructure remains ludicrous. Get the costs of access down (a good idea for a lot of other reasons), and then see if it makes sense. Unfortunately, current space policy (or at least the vast amount of expenditures on space transportation) seems aimed at increasing the cost of access to space.

[Via Ken Silber]

[Early evening update]

Mark Whittington:

Rand’s approach is just clearly wrong. There are no market incentives to decrease the cost of space travel, outside the COTS competition.

Nope, none at all. How will we ever do it without the government?

Oh, wait! How about the millions of people who want to take a trip, and can afford to do so if the price comes down? Mark ignores that one, though, because it doesn’t require NASA getting billions of dollars, or giving them out for a few flights via COTS, that will do very little to significantly reduce the cost of access.

Green Fascism

There’s an interesting post over at New Scientist on the new eugenicists. What’s even more interesting, though, are the numerous comments, which repeat many of the myths about population growth and control, and feasibility of mitigating it through space technology, including space (to use the politically incorrect word) colonization.

I don’t really have time to critique in any detail, other than to note that anyone who makes feasibility arguments on the latter subject by referring to Shuttle costs is completely clueless. Sadly though, years ago, Carl Sagan did exactly that.

Fascists Of The Corn

David Freddoso is still angry about our insane and, in my opinion, criminal ethanol and sugar policies:

The problem is that our sugar industry has even better lobbyists than big ethanol. They enjoy price supports, which we pay for both through the Treasury and in the supermarket. The price of our sugar is usually twice that of the world market. The sugar growers love it — even if they cannot sell all of their sugar, they have a guaranteed government buyer at an inflated price. The corn growers love it too, because high U.S. sugar prices push our food industries to use high-fructose corn syrup (ever seen that on a product label?) as an alternative sweetener — yet another artificial support for the world price of corn.

Not to mention wreaking havoc on the Everglades. Price-supported sugar cane is using up a lot of the water that both south Floridian humans and animals need, and they do this with the same political clout that they use to get the subsidies and tariffs, for an industry that is not all that big in terms of the economy.

Even if we want ethanol, we can’t solve the problem by importing sugar, because there are tariffs in place. We can’t import the ethanol itself because there’s a high tariff against that, too. Wherever you turn, there’s no way out — Americans don’t enjoy economic freedom, we live in a managed economy.

It makes me especially proud of my country when I see Sen. Chuck Grassley (R-Iowa) call foreign delegates’ concerns over a potential doubling of world hunger “a joke…”

Let’s call these people out for what they are–Republicans and Democrats alike–fascists. Not that there’s anything wrong with that.

[Update a few minutes later]

Biofool.

[Update early evening]

Oh, wonderful:

Key House and Senate farm bill negotiators reached agreement today on the main elements of the farm bill…[T]he five-year bill would raise the target prices and loan rates for northern crops beginning in 2010, raise the sugar loan rate three-quarters of a cent and include a sugar-to-ethanol program.

Oh, that’s just great. We have a program that makes us overpay for sugar, and now we’re going to start a new program to subsidize the ethanol we create from it — because without the subsidy, the inflated sugar price we’ve created will make the ethanol unprofitable.

Just when you think it can’t get any worse, they always find a way.

A Policy Disaster

Deroy Murdock writes on the ethanol scam, and its global effects on food and fuel prices.

[Update a few minutes later]

If this pans out, ethanol will make a lot more sense, won’t be competing with food, and won’t require any subsidies:

Along with cellulose, the cyanobacteria developed by Professor R. Malcolm Brown Jr. and Dr. David Nobles Jr. secrete glucose and sucrose. These simple sugars are the major sources used to produce ethanol.

“The cyanobacterium is potentially a very inexpensive source for sugars to use for ethanol and designer fuels,” says Nobles, a research associate in the Section of Microbiology and Molecular Genetics.

Brown and Nobles say their cyanobacteria can be grown in production facilities on non-agricultural lands using salty water unsuitable for human consumption or crops.

Bring it on.

[Evening update]

David Freddoso has an appropriately outraged follow-up to the Murdock piece:

Our government’s negligence and perhaps even malicious misdirection of societal resources toward a worthless, unwanted product — ethanol — will cause millions of people to go hungry tonight.

The way things are going, this could become the worst chapter yet in the sad, ruinous history of our bipartisan agricultural welfare programs. For those who write in and protest that free-market capitalism is an uncompassionate, un-Christian economic system, I submit that you are currently witnessing the alternative.

Indeed. End the tariffs, end the subsidies. Let the market work.

Feel-Good Disaster

Virginia Postrel writes about the economic ignorance of the global warm-mongers, a group that unfortunately includes all three presidential candidates. I just hope that Phil Gramm or someone can get McCain to come to his senses on the issue once he’s actually in office.

The connection between higher prices for energy and reduced carbon dioxide emissions may not have hit the national consciousness yet, but the LAT’s Margo Roosevelt reports that California utilities–and eventually their customers–are beginning to realize this isn’t just a symbolic issue.

…The DWP, to whom I pay my electric bills, wants out of the carbon dioxide caps. It apparently thinks the law shouldn’t apply to socialist enterprises.

Isn’t that always the way? The laws are for “the little people.”

The Missing Word

With a computer mouse, you can precisely position the cursor wherever you want. The motion of the cursor exactly mimics the motion of the mouse in your hand. It is a positional controller.

But in many computer games, you have no direct control over position. The joystick controller only controls the rate of motion. You have to provide a direction, and speed, and hope that it will get to the desired location at the desired time. As anyone who has played such games knows, position control using a rate controller is much less precise, and often not even accurate if you’re not a good judge of such things.

In last night’s political debate (as in almost all discussions of this topic), there was a lot of talk about “cutting taxes,” and “raising taxes.” Not to pick on him in particular, but as an example, here’s the reporting by Jim Geraghty:

Hillary laughs heartily at McCain’s comment about “they’re going to raise your taxes, and they have the aud-ic-i-ty, the audacity, to hope you don’t mind!”

With her laugh, she triggered a thousand primal screams on liberal blogs.

Steph asks if she’ll make a pledge to never raise taxes for those making under $200,000 per year. She says she’s “absolutely committed to not raising taxes on those making less than $200,000.”

Obama echoes the pledge, and says he’ll cut taxes for those folks.

I don’t trust either, but I’m rather surprised that they both were willing to be pinned down in the equivalent of “read my lips, no new taxes.”

Wow. Charlie Gibson notes that when the capital gains taxes were cut under both Clinton and Bush, revenues went up.

These are the GREATEST DEBATE QUESTIONS EVER.

Wow. Hillary: “I would not raise the capital gains tax above 20 percent, if I would raise it at all… I don’t want to raise taxes on everyone.” She rips Obama’s plan to raise payroll taxes.

Emphasis mine, in all cases. Every one of these statements is absurd. No one, not the mighty Hillary, not the saintly Obama, has the power to raise or cut taxes. They don’t have a tax revenue controller. All they can do is increase or decrease tax rates. And they can’t predict with certainty whether or not this will increase, or decrease “taxes” (that is, tax revenues). The absurdity of leaving out this key word is demonstrated starkly in Charlie Gibson’s statement: “when the capital gains taxes were cut, revenues went up.” How can that be? If taxes are cut, by definition, revenues have to go down. But if he had said that when capital gains tax rates are cut, revenues go up, this is perfectly sensible (though counterintuitive to people who don’t understand that tax rates modify behavior).

I expect Democrats (and journalists, who are generally Democrats) to play such word games, but I’m always disappointed when Republicans and so-called conservatives go along with it. People who want lower tax rates (and a more vibrant economy) have to demand them, and stop talking about lower taxes. Yes, it would be nice to cut off funding to the federal government (at least if we could get spending under control), but that’s a separate issue. By conflating tax revenues with tax rates, we grant far too much power to the big government types, when we should instead be pointing out their powerlessness. There are many unintended consequences of government action, and it is always useful to point out that this is just one more–that the federal government cannot directly control how much it taxes people (that is, how much money it actually confiscates)–it can only control the the rate at which it does so.

This is just one more example of how we small-government types have to start taking back the language.

Long Term Space Budgeting

In Monday’s part 1 of “VSE and the Retirement of Baby Boomers,” Charles Miller and Jeff Foust port the conventional wisdom about budgeting to the space discussion. These are two of the most well-read, connected and smart people on space topics. I’d like to give folks addressing this issue some more texture to add some items that are not part of the conventional intergenerational budget debate which can be summarized perennially as “vote for me or things will all go to hell pretty soon if they aren’t already there”, but every year real personal income rises and real government spending minus interest payments rise; life expectancy goes up and almost all the Cassandras are proven wrong, but by then they’ve long since moved on to the next pending calamity. Here are the unconventional texture points:

  • Personal income is continuing to rise ahead of inflation such that every generation earns about twice as much per capita as the one before
  • That is, a falling percent of the federal budget should still buy more robotics, rockets, science, human spaceflight, exploration (and settlement?!) even as it buys fewer staffers and is a lower share of GDP
  • Bracket creep, estate tax and alternative minimum tax are going to increase receipts above historical revenues and changes that fix these are likely to fix macro spending issues at the same time
  • The boomers are likely to work part time or full time during retirement years
  • The boomers are more comfortable with the stock market and are likely to earn higher returns there than previous generations of pensioners
  • The boomer echo will put more workers in the worker to retiree ratio again as the boomers die off before the boomer echo generation retires
  • Between Federal, State, County and Local taxes, we are taxed together at above the monopoly rate; if there were a coordinated decrease, revenues would increase for each
  • Private spending on human spaceflight will rise and is already about 0.3% of NASA spending; depending on how you count capital spending by people like Bigelow, it’s in the single digit percent
  • First-party State, County and Local spending and incentives for space flight will increase as more states cross the income threshold of the US and USSR economies in the late 1950s which was about 1/8 what it is now for the US. California has already crossed this. Texas and New York will in the next 20 years. If space gets cheaper, Florida may enter the ranks of states that could have their own space programs. Initiative by a vocal minority may rocket this issue into the fore. Oklahoma and New Mexico are more like the USSR in the space race looking at space as a way to look far bigger than their economies suggest and to leap frog other states in an emerging industry. The Soyuz is still flying and is now profitable even as Russia has an economy 1/6 the size of the US (USSR had 1/2 the US economy in 1960) so the space portion of their strategy is validated. And may even work for New Mexico which has about 1/12 the size of the 1960 USSR economy now
  • Boomers dying will likely dry up support for a cargo-cult do-nothing NASA as memories of Apollo die with them; Obama can be seen as a coming attraction of how the next generation will treat NASA
  • Support for ITAR and missile counter proliferation will wane, but existing techniques will ossify as civilian launches start to dwarf military ones as long as there is no space 9/11 which has a mixed effect on cost of flight
  • Competition and achievement from the private sector will put pressure on budgets to achieve more value for the dollar, but at the same time make obtaining that value easier