A New Role for the Government??

The fiscal conservative in me says the government has no role whatsoever in matters of technology. The pragmatist in me believes otherwise. Time has proven that federal highways, funded by gasoline and other such taxes, are more efficient than coast to coast toll roads. Thus, there is justification for government funding of new highway technologies. Government funding of new weapons technology and weapons research is practically mandatory, unless you want our arms manufacturers selling to the highest bidder, and that high bidder not always being the US. How would you have liked some manufacturer developing the atomic bomb, then selling it to Germany or Japan? Of course, by funding the research, you control what happens with it, and can even influence the direction of the research.

That being said, what is government’s role in space technology? The entire NASA program, up through Apollo-Soyuz was to beat the Soviets to the moon and prove America’s superiority. Once that was accomplished, NASA became a n organization without a mission. The shuttle was created to get to the space station, the space station was a place for the shuttle to go. Promises of technological benefits from micro-gravity experiments still ring hollow. Now with the new race to Mars and the Moon, be prepared for even more hollow promises.

The issue I find most interesting when it comes to government funded technology is in the field of energy. Other nations, most notably France, have shown that government controlled nuclear power generation can be safe, efficient and cost effective. They rely on standardization, uniformity of training and constant re-certification. They have perfected fuel re-processing, which minimizes nuclear waste. The hodge-podge of manufacturers in the US, the incompatibility between different reactor types, and the pressure of competition all contributed to the high costs associated with nuclear power in the US.

Besides nuclear based energy sources, is there a role for the US government in energy development? Unfortunately (that damn laissez faire guy is complaining again), the answer is yes. We still use way too much petroleum for transportation. Yes, we use it for heating also, but a transition to cheap nuclear electricity would allow a transition to electric heat. It’s transportation where oil is used. If the US government took the CAFÉ standards, and steadily increased them to 100 miles per gallon, or limited emissions to near zero, it would force internal combustion engines to a level of efficiency that is currently unattainable with conventional technologies. Our dependency on foreign oil could crumble in a matter of years, and with that, Islamic fundamentalism could go the way of the KKK, a shameful blot, but powerless. I’m still thinking this through a bit, more to follow…

John Lukacs, the New Noah Webster, and Alan Greenspan and pap for the masses

I always try to read a book all the way through before commenting on it But I'm about halfway through John Lukacs "Democracy and Populism" and I'm a bit confused. There are moments of absolute brilliance here, a depth of perception I rarely find. Yet he spends huge portions of the book showing how our definitions of words like facism, totalitarianism, liberal and conservative are incredibly wrong. At the same time, he makes references to Hobbes and Locke that require a fairly sophisticated knowledge of philosophy. So let me get this straight, I don't know what facism is, but I have an indepth knowledge of philosophy? If you, like me, can't remember the tenets of Hobbes philosophy, basically he believed that people are by nature evil, well, not really, perhaps insanely selfish is the right description. Of course, trying to define the teachings of Hobbes or Locke or Aristotle in a few words is impossible. Lukacs is making an important point, that populism is a descent into hell, but damn, I wish he had more than 240 odd pages to prove his hypothosis. I should finish the book tonight, and hopefully will more soon.

On a different note, the world hailed the actions of the Fed this week. Why? The employment report on Friday, to me at least, indicates continued weekness in the job market. Yes, I know, more than "whatever the number" of jobs were created, yet the total number of unemployed INCREASED!!!! In the minds of Wall Street, the biggest problem is inflation, and god only knows prices are increasing. But ALL of the increase can be attributed to the rise in the cost of oil! When prices rise because of the scarcity, real or imagined, of a single commodity, that is NOT inflation. Rising oil prices increases the costs of many things. Take fertilizer for example. Much of the process of producing fertilizer requires the use of various forms of petroleum. The increase in the cost of fetilizer raises the price of producing raw foodstuffs. Add to that the added cost of transportaion because of fuel costs, and guess what, the cost of food goes up! Is this because there is too much money available for food? NO!!! It is because a bubble in oil prices is forming, and the ramifications are far flung.

Problem is, Greenspan and the Fed had little choice but to raise interest rates, because it's what is expected by Wall Street and the other brainless investment groups. If the Fed had not raised rates, the perception would be they lacked the courage to fight "a clearly inflationary" issue. Alan Greenspan is an incredibly intelligent economist. I first started reading his opinions in Ayn Rand's non-fiction works (yes, he submitted articles for Objectivist books, before Objectivism decended into a cult of personality) and he has a profound knowledge of market forces. He needs to be educating investors about what is really happening out there. Take my favorite example, tires. In the 60's, tires cost 10 to 20 dollars each, lasted 15,000 miles if you were lucky. Now inexpensive tires are $60, and last for 60,000 miles. That means in basic math terms the cost of tires has not changed in 40 years, so in real terms, they are nearly free! Problem is, most inflation formulae see $60 versus $15 and say tires cost 4 times as much as they used to. Greenspan knows this, he ses this, he must, he is not swayed by the emotional vagaries of an investor. However, he also knows you must play to the audience from time to time. Thus we increase rates, until he can educate the masses. Problem is, the masses are ignorant to such facts. They obsess about the 30 cent per gallon gas they bought, the $15 tires, and fail to see the value of what they are buying.

I don't know where this current economic ride is going to end. I have a saying, stolen from a song, that if the ride is worth the fall, let's ride. Unfortunately this ride is not worth any fall, let alone the one we are heading for. And if John Lukacs is right, it will be on much more than an economic basis.