A friend on a listserv commented on the Planetary Resources announcement yesterday:
>
>
> Hmm. Cant help but wonder what the costs of these asteroid resources will be. l wonder - will they be intended for government purchase, corporate purpose? A fair price would incorporate the cost of transport. .
>
That certainly is a real concern, which I mentioned briefly in my blog account.
In many ways, the technical and business plan is much better and more intelligent than other things I have seen
in the space industry space (not counting communication satellites or use of GPS). They have revenue
streams in place more than just selling nonterrestrial material (NTM). They rely on robotics to do the job with
lightweight payloads, which can hitch a ride at relatively low cost on any of a variety of other launches. It also turns
out to connect to a lot of technologies I've been directly involved in.
HOWEVER ... to bring back X kilos of nonterrestrial material to earth does involve a transport cost, and it does make me slightly queasy
that their plans do not seem to involve any effort at all to turn around the crisis we are facing on the cost of getting to space (low earth orbit) in the first place.
That crisis worries me a lot, as I've probably said here before.
Back in 2009, I tried to warn people that the Ares rockets which were the backbone of NASA's "return to the moon"
and space exploration in general were badly conceived antiquated technology, soon to expose huge excess of cost over what had been promised back in the days of Michael Griffin's 90-day plan which was grossly politically biased to come up with "the right answer" -- the answer which would
send the most jobs to Decatur. I found myself wondering whethe r Senator Mikulski understood that she is the chair of the relevant appropriations committee,
and did not have to put up with such incredibly gross waste. Ares didn't REALLY experience cost overruns; the problem was that the initial promises
were grossly dishonest. Expendable rockets are NOT cheaper than partially reusable systems like the space shuttle.
What surprises me now is that people have made such strong commitments to a "new" Space Launch System which takes the same approach, which is
a virtual clone of Ares, and just as expensive and wasteful.
There is a debate raging now. SHOULD the big aerospace companies and the space community offer to NASA something which has more
than twice the capability for the same development cost, since they do in fact know how to do better? Boeing was even brave enough
to put out feelers on a MUCH more cost-effective alternative, wh! ich would substantially enhance national security, in a story in Aviation Week
which I cite in my recent paper on this subject. (I wrote an invited paper for a Russian aerospace journal which just came out; the draft in English is posted
at http://vixra.org/abs/1112.0018.)
But the feeling out there is:
1. The politicians will not tolerate discussion of an option which would give the US more capability for the same cost.
They forwarded me a message from Launchspace which expresses the feelings of experts quite well:
===================================
Shuttle - RIP
(Launchspace Staff)
The Space Shuttle Program has ended on a sad note. Last week Discovery took a "victory lap" around the Washington Mall, riding on its carrier Boeing 747. However, this was hardly a victory for America's space program. After 30 years and well over 100 flights into space, shuttle orbiters are to become museum pieces. These will forever remind us of the once magnificent flying machines and the daredevil astronauts that rode them into the black vacuum of space. The sad part of this in that the end of the Space Shuttle Era is also the end of a once great US human space flight program. NASA has promised many follow-on exciting human space adventures, but credibility of the space agency is at an all-time low. NASA has devolved into little more than a jobs program, trying to keep thousands of excellent engineers and scientists busy, but with little vision or Administration support for continuing human exploration of the solar system and beyond. Once proud astronauts are now relegated to begging the Russians for rides on Soyuz launch vehicles, and at a very high price.
NASA is reduced to hoping that commercial space companies can replace the Russians and ferry astronauts to and from the ISS. Flights beyond ISS will await some new and undefined architecture that will require a new and very expensive expendable booster system, SLS, a booster system that will easily exceed the cost of operating the shuttle. It is not surprising that no one wants to pay for this new system. It appears to be a giant step backward to the days of the Apollo Saturn V. We might go so far as to say: "This is a small step backward for NASA, but a giant step backward for America's space program."
===============================================
2. There is a debate about what Romney would do about this. Is he in his heart a guy from Bian Capital who loves to fire people who don't perform, who
wants to get rid of any large-scale wasteful spending, who would be happy to zero out such a gross waste of money in the blink of an eye?
Or in his heart, is he the most compliant servant of fat cats and corruption in decades, a kind of new Taft, who has brought on the same old Griffin to
be his space advisor, who will continue to maintain the status quo of money going down the same rathole producing nothing, even as our real technical capabilities here go closer and closer to the cliff? In these discussions, I initially said the first... and cited Romney's speeches in Florida... but I have to admit that this is a kind of optimistic slant! on Romney, and the folks here overwhelmingly tend to assume the latter view... and are basing their actions on that assumption.
I(I wonder if Griffin has had a few quiet discussions with them behind closed doors.) No reduction in corporate welfare here, they all assume.
3. Still, the Administration itself is far form blameless. Maybe it was a lower level functionary being too clever...
I recently received an inquiry from Israel about the incredible scandal
http://www.foxnews.com/scitech/2012/04/23/pentagon-explains-why-hypersonic-mach-13-drone-failed/
Of course, you know about CYA: "We intended our new vehicle to explode in mid air. That was our plan all along."
because of security, I do not really know the true story, but I have been able to piece together a pretty good possibility.
DARPA HAD decided to go ahead with a global reach vehicle, to cost about $300 million, which would have incidentally solved our fundamental problem of affordable access to space (or at least made us capable of getting there cheaply, and prevented the imminent loss of that capability.)
But some idiot at a middle level thought they were clever by reducing costs, and getting rid of the effort to get the skin really right.
So they made a vehicle th! at melted.
Will Romney or Obama or their people ever lift a finger to get us back on track, in DARPA even if NASA is a lost cause?
For now, it looks more likely to me that Russia or China will make us look like incredible weak fools sooner than we expect...
but one can always hope... and make just a little noise...
Best of luck,
Paul
Wednesday, April 25, 2012
Tuesday, April 24, 2012
Google invests in asteroid mining hardware work now
Today (4/24/2012) the newish company Planetary Resources held a big press conference announcing that their initial investment plan has been fully funded, by people like Larry P{age and half a dozen others, and has begun work on hardware. The basic plan is available, of course, at their web site. But there were a number of zingers.
First, it's mainly a robotics effort. They have a small team, but it's clear that the team posted on the web is less than half the full team. Moseley and other JPL people
clearly play a critical role. In listing key enabling technologies on the **IT** side,
crucial to success in these robotics... they basically referred to telescopes and
planetary rovers form JPL, but ALSO "medical devices and automotive." What does JPL do in automotive technology related to these goals? I can guess. For some kind of robotic control, the best chip available for many years was the chip developed by Mosaix, a spinoff or partner of JPL. Their initial contract with Ford was very widely publicized by JPL. But they developed a more powerful Phase II chip, under funding from me.
However, there is new stuff in the pipeline of the same family which will be far more powerful. I have a couple of chapters in press in the new books on memristors...
Robotic mining: in fact this was a major theme in JIETSSP, the funding initiative on space solar power which I led in 2002. (The last US government funding effort on energy from space.) The best really working technology for that did not come from JPL... It involved "teleautonomy." A key challenge was to
develop robotics skills... and that's basically a task for ADP, an area I have been pushing very hard to advance from NSF. But it has been a great struggle, given the resistance of old fashioned binary thinkers... still, the new book edited by Lewis and Liu, from IEEE Press, gives the best present state of the art. NASA Ames was a great center for this stuff, but Shelby's Apollo on steroids preserved jobs in Decatur by firing a lot of the key folks in California... (with no resistance at all by Boeing lobbyists)... weakening US technology in this area, but maybe freeing up some people for this venture.
The venture depends VERY heavily on hitching rides to get to earth orbit in the first place.
The ultimate costs will still be pretty much proportional to cost of getting from earth to LEO,
which this venture will do nothing to reduce. There is potential to reduce those costs a hundred fold. It would
be really great if they could join the meager efforts to make that happen... but the plan right now says nothing about that. These guys are quite competent, but none of today's launch service
efforts are within a factor of ten of what could be done for cost reduction in that area. My
new paper which just came out in Russian, invited by a Russian aerospace journal... gets somewhat into the real story, which is a long one.
Since Moseley was a telescope guy... no surprise that the first two phases, Arkyd (sp?) 100 and 200,
involve building space telescopes in Bellevue, Washington, and getting them into orbit. They plan six years of that. That's the real hardware, the real investment, for the next 5-6 years.
To "prospect." But they have dual use, and parallel cash streams are used to stay in the black.
Does this mean we get Google Earth II as a spinoff? Maybe...
BUT: a few years ago, I funded a bug named David Hyland, who later moved from U. Michigan to Texas A&M, who was actually the guy who first sold JPL on "constellation imaging" technology,
after we had some discussion of earth observing platforms at an AF meeting he led in 1997.
(A very, very memorable meeting for me, in many ways.) That was only Phase I of a
more ambitious more cost-effective constellation observing technology he developed,
"Quantum Twiss interferometry.' That was proved out in hardware studies under NASA's TPF program... but then came Shelby, and it's interesting whether it's dead, black or European right now. Could be any of the three. It would be a huge opportunity for this group... and would enhance the spinoffs to an incredible degree.
And, yes, a lot of this traces back not only to stuff I funded, but algorithms I developed
even before that...
I hope they succeed, but that earth-to-LEO cost is ever more a crisis for ANYTHING in space...
For more details on the group, see
www.PlanetaryResources.com,
which contains a link to the video of the press conference:
http://www.youtube.com/watch?v=t0c9oZh4vTo&fs=1&rel=0&autoplay=1
First, it's mainly a robotics effort. They have a small team, but it's clear that the team posted on the web is less than half the full team. Moseley and other JPL people
clearly play a critical role. In listing key enabling technologies on the **IT** side,
crucial to success in these robotics... they basically referred to telescopes and
planetary rovers form JPL, but ALSO "medical devices and automotive." What does JPL do in automotive technology related to these goals? I can guess. For some kind of robotic control, the best chip available for many years was the chip developed by Mosaix, a spinoff or partner of JPL. Their initial contract with Ford was very widely publicized by JPL. But they developed a more powerful Phase II chip, under funding from me.
However, there is new stuff in the pipeline of the same family which will be far more powerful. I have a couple of chapters in press in the new books on memristors...
Robotic mining: in fact this was a major theme in JIETSSP, the funding initiative on space solar power which I led in 2002. (The last US government funding effort on energy from space.) The best really working technology for that did not come from JPL... It involved "teleautonomy." A key challenge was to
develop robotics skills... and that's basically a task for ADP, an area I have been pushing very hard to advance from NSF. But it has been a great struggle, given the resistance of old fashioned binary thinkers... still, the new book edited by Lewis and Liu, from IEEE Press, gives the best present state of the art. NASA Ames was a great center for this stuff, but Shelby's Apollo on steroids preserved jobs in Decatur by firing a lot of the key folks in California... (with no resistance at all by Boeing lobbyists)... weakening US technology in this area, but maybe freeing up some people for this venture.
The venture depends VERY heavily on hitching rides to get to earth orbit in the first place.
The ultimate costs will still be pretty much proportional to cost of getting from earth to LEO,
which this venture will do nothing to reduce. There is potential to reduce those costs a hundred fold. It would
be really great if they could join the meager efforts to make that happen... but the plan right now says nothing about that. These guys are quite competent, but none of today's launch service
efforts are within a factor of ten of what could be done for cost reduction in that area. My
new paper which just came out in Russian, invited by a Russian aerospace journal... gets somewhat into the real story, which is a long one.
Since Moseley was a telescope guy... no surprise that the first two phases, Arkyd (sp?) 100 and 200,
involve building space telescopes in Bellevue, Washington, and getting them into orbit. They plan six years of that. That's the real hardware, the real investment, for the next 5-6 years.
To "prospect." But they have dual use, and parallel cash streams are used to stay in the black.
Does this mean we get Google Earth II as a spinoff? Maybe...
BUT: a few years ago, I funded a bug named David Hyland, who later moved from U. Michigan to Texas A&M, who was actually the guy who first sold JPL on "constellation imaging" technology,
after we had some discussion of earth observing platforms at an AF meeting he led in 1997.
(A very, very memorable meeting for me, in many ways.) That was only Phase I of a
more ambitious more cost-effective constellation observing technology he developed,
"Quantum Twiss interferometry.' That was proved out in hardware studies under NASA's TPF program... but then came Shelby, and it's interesting whether it's dead, black or European right now. Could be any of the three. It would be a huge opportunity for this group... and would enhance the spinoffs to an incredible degree.
And, yes, a lot of this traces back not only to stuff I funded, but algorithms I developed
even before that...
I hope they succeed, but that earth-to-LEO cost is ever more a crisis for ANYTHING in space...
For more details on the group, see
www.PlanetaryResources.com,
which contains a link to the video of the press conference:
http://www.youtube.com/watch?v=t0c9oZh4vTo&fs=1&rel=0&autoplay=1
Sunday, April 22, 2012
Big dark matter study might even allow FTL travel
Moni-Bidin
http://www.livescience.com/19796-dark-matter-alternatives.html
Real science pays real attention to empirical reality, and stands ready to turn on a dime
when important new information comes in. And it always remembers that learning from
experience and experiment... is a kind of game of probabilities, which those of us
who know about learning never forget.
About three days ago, I was very open-minded in principle about whether
Einstein's general theory of relativity (GR) is the ultimate truth. But in practice,
I didn't see any reason to doubt it, or to doubt the conclusion that realistic human
travel beyond the speed of light would be essentially impossible. OK, there are
wormhole solutions to GR, but I gather that these tend to be unstable and ask for
use of a kind of matter ("exotic matter" with negative mass) that we have absolutely no
idea of how to produce, whose very existence is hypothetical and a problem for all
present physical theories. For the "next big revolution" in physics, I saw
changes in all parts of physics EXCEPT GR.
But now... a major new empirical result has come in (see above).
On a HUGE scale, we have known for a decade or two that the great motions of galaxies
are grossly out of line with what would be predicted from GR, based on the mass of
what we see out there. But the hypothesis of "dark matter" seemed to solve all that.
This is where the psychology of modern science gets to be quite interesting... and
predictably pathological. We had two choices out there -- to assume a huge amount
of a new kind of matter, totally different from anything in our experience
or in today's standard model of physics electroweak theory plus quantum chromodynamics,
the twin pillars of most of physics today), or to change GR. To change
the standard model, or to change GR. Apriori, I can't see why we should have so much
confidence that the standard model is the one that has to change, and that GR is the
one which has to say the same. We don 't really know yet. The weird thing is that
the reactive political establishment of physics is usually very upset when I suggest tinkering with the tiniest detail of the standard model, to make it more consistent with GR. Usually I am "on the GR side." But the sheer mental inertia takes over...
when they have played with dark matter for all of a decade or two, it becomes instant nonquestionable dogma to many!
I am in the minority who really believes we DO have compelling reasons to question the standard model of physics as it stands today, at its core, and has provided an alternative. But in the new controversy... dark matter versus changing GR..
I am utterly agnostic and vastly entertained.
It intrigues me that MSNBC and LiveScience, in reporting the study, ASKED
the obvious question: "Ok, if we can take this experimental result at face value
even though we have a lot of checking to do), what does that tell us?"
Suddenly there is a significant possibility (30-60% probability, like) that
replacing GR with a new theory by Moffat, a theory called MOG (Modified Gravity),
is a "next big step up" for physics, much closer to reality than GR.
We shouldn't suddenly treat that as a new dogma... but we have every reason to take it seriously.
Also, all of a sudden, all those analyses of how hard it would be to do FTL travel...
may be based on the wrong theory. In MOG, the speed of light is a variable.
The basics of MOG are available on wikipedia.
http://en.wikipedia.org/wiki/Scalar-tensor-vector_gravity
People have not yet studied MOG so much as they have studied MOG, so we do not yet know. There are many interesting questions here --
1. What ARE the FTL implications if MOG happens to be true?
2. Are there problems with stability and well-definedness with MOG which may justify
some technical changes in the theory -- or which introduce novel stochastic factors?
3. Does his phi field really have exactly the form given? Does it require modifications such as those I argue we need for the "Higgs field" in electroweak theory? Or does it also couple with neutrinos or such? (Phi itself could be considered
a KIND of dark matter, a very different kind from what reactive thinkers have assumed.)
And, of course, there are the questions of whether the new experimental result will
hold up when new surveys of stars or galaxies are done. (Yet it is still possible that the dark matter hypothesis is consistent with data on one scale but not another; it would be a typical mental aberration for folks to assume that consistency on one scale "shows that the earlier result" (about another scale) "is wrong." Also, as Moni-Bidin has noted, "we might find that the dark matter is there, but is simply shaped like a giant cigar in space... though I can't quite imagine why that would be as yet."
UNLIKE MOffat's theory, these cigar alternatives are not so well motivated right
now... but we will see.
Some critics have said: "that's well and good, but where are the phions?"
Well, in my version of QFT we shouldn't expect to see phions UNLESS a specific
decay mechanism has been predicted and looked for; perhaps I need to do more google search to see whether that is the case, but I am not aware of it right now.
It would be really nice if people could remember that old idea about exploring the unknown and paying enough respect to empirical reality... not only from Solyndra..
=====
By the way -- I mentioned wormholes here mainly because most people know about them,
and I always seem to be at risk from giving more details than people feel comfortable with. But in truth -- I was really thinking of the "Alcubierre solution" in GR,
which also requires "exotic matter." Would that kind of faster than light moving solution be possible in MOG, without negative mass matter? I don't know. It would
be interesting to find out.
Not that we should rule out the possibility of someday discovering negative mass
matter. That doesn't seem to fit very well either in today's physics or even 'the next generation," but ... m,aybe when we know more, we will be better prepared to do more justice to the possibility. Maybe.
But we have big steps to make first -- in the formulation of quantum theory,
in the realms of the standard model, and perhaps, it seems, even in the realm of gravity.
http://www.livescience.com/19796-dark-matter-alternatives.html
Real science pays real attention to empirical reality, and stands ready to turn on a dime
when important new information comes in. And it always remembers that learning from
experience and experiment... is a kind of game of probabilities, which those of us
who know about learning never forget.
About three days ago, I was very open-minded in principle about whether
Einstein's general theory of relativity (GR) is the ultimate truth. But in practice,
I didn't see any reason to doubt it, or to doubt the conclusion that realistic human
travel beyond the speed of light would be essentially impossible. OK, there are
wormhole solutions to GR, but I gather that these tend to be unstable and ask for
use of a kind of matter ("exotic matter" with negative mass) that we have absolutely no
idea of how to produce, whose very existence is hypothetical and a problem for all
present physical theories. For the "next big revolution" in physics, I saw
changes in all parts of physics EXCEPT GR.
But now... a major new empirical result has come in (see above).
On a HUGE scale, we have known for a decade or two that the great motions of galaxies
are grossly out of line with what would be predicted from GR, based on the mass of
what we see out there. But the hypothesis of "dark matter" seemed to solve all that.
This is where the psychology of modern science gets to be quite interesting... and
predictably pathological. We had two choices out there -- to assume a huge amount
of a new kind of matter, totally different from anything in our experience
or in today's standard model of physics electroweak theory plus quantum chromodynamics,
the twin pillars of most of physics today), or to change GR. To change
the standard model, or to change GR. Apriori, I can't see why we should have so much
confidence that the standard model is the one that has to change, and that GR is the
one which has to say the same. We don 't really know yet. The weird thing is that
the reactive political establishment of physics is usually very upset when I suggest tinkering with the tiniest detail of the standard model, to make it more consistent with GR. Usually I am "on the GR side." But the sheer mental inertia takes over...
when they have played with dark matter for all of a decade or two, it becomes instant nonquestionable dogma to many!
I am in the minority who really believes we DO have compelling reasons to question the standard model of physics as it stands today, at its core, and has provided an alternative. But in the new controversy... dark matter versus changing GR..
I am utterly agnostic and vastly entertained.
It intrigues me that MSNBC and LiveScience, in reporting the study, ASKED
the obvious question: "Ok, if we can take this experimental result at face value
even though we have a lot of checking to do), what does that tell us?"
Suddenly there is a significant possibility (30-60% probability, like) that
replacing GR with a new theory by Moffat, a theory called MOG (Modified Gravity),
is a "next big step up" for physics, much closer to reality than GR.
We shouldn't suddenly treat that as a new dogma... but we have every reason to take it seriously.
Also, all of a sudden, all those analyses of how hard it would be to do FTL travel...
may be based on the wrong theory. In MOG, the speed of light is a variable.
The basics of MOG are available on wikipedia.
http://en.wikipedia.org/wiki/Scalar-tensor-vector_gravity
People have not yet studied MOG so much as they have studied MOG, so we do not yet know. There are many interesting questions here --
1. What ARE the FTL implications if MOG happens to be true?
2. Are there problems with stability and well-definedness with MOG which may justify
some technical changes in the theory -- or which introduce novel stochastic factors?
3. Does his phi field really have exactly the form given? Does it require modifications such as those I argue we need for the "Higgs field" in electroweak theory? Or does it also couple with neutrinos or such? (Phi itself could be considered
a KIND of dark matter, a very different kind from what reactive thinkers have assumed.)
And, of course, there are the questions of whether the new experimental result will
hold up when new surveys of stars or galaxies are done. (Yet it is still possible that the dark matter hypothesis is consistent with data on one scale but not another; it would be a typical mental aberration for folks to assume that consistency on one scale "shows that the earlier result" (about another scale) "is wrong." Also, as Moni-Bidin has noted, "we might find that the dark matter is there, but is simply shaped like a giant cigar in space... though I can't quite imagine why that would be as yet."
UNLIKE MOffat's theory, these cigar alternatives are not so well motivated right
now... but we will see.
Some critics have said: "that's well and good, but where are the phions?"
Well, in my version of QFT we shouldn't expect to see phions UNLESS a specific
decay mechanism has been predicted and looked for; perhaps I need to do more google search to see whether that is the case, but I am not aware of it right now.
It would be really nice if people could remember that old idea about exploring the unknown and paying enough respect to empirical reality... not only from Solyndra..
=====
By the way -- I mentioned wormholes here mainly because most people know about them,
and I always seem to be at risk from giving more details than people feel comfortable with. But in truth -- I was really thinking of the "Alcubierre solution" in GR,
which also requires "exotic matter." Would that kind of faster than light moving solution be possible in MOG, without negative mass matter? I don't know. It would
be interesting to find out.
Not that we should rule out the possibility of someday discovering negative mass
matter. That doesn't seem to fit very well either in today's physics or even 'the next generation," but ... m,aybe when we know more, we will be better prepared to do more justice to the possibility. Maybe.
But we have big steps to make first -- in the formulation of quantum theory,
in the realms of the standard model, and perhaps, it seems, even in the realm of gravity.
Saturday, April 14, 2012
Defusing the ticking time bomb in the EU Economy
A few days ago, the Financial Times carried an op-ed by Gideon Rachman on
"the ticking time bomb that no one can defuse." I sent him an email (first item below)
on what the real time bomb is -- not the banks, not the euro, but the risk of a new Great Depression. In other words, jobs and aggregate demand. And I argued that
we CAN defuse it... if we use our brains a bit more effectively and really focus on the problem.
A few days after that, there was another op-ed by Soros which actually did seem
to be aware of the real time bomb... TO SOME DEGREE. A good start, but we need a lot more. So my comments on that, somewhat technical come next. And then a few thoughts
about a friend's discussion with Larry Summers..
=====================
=====================
---------- Forwarded message ----------
From: Paul Werbos
Date: Fri, Apr 6, 2012 at 2:56 PM
Subject: any way to defuse the time bomb about to blow up in your face
To: gideon.rachman@ft.com
Dear Mr. Rachman:
Thank you very much for your stimulating op-ed on the ticking time
bomb in the economy of Europe.
What scares me most here is that the biggest time bomb is not about
the euro or about the banks
(important as they are) but about aggregate demand. My worry is that
aggregate demand will keep slipping in Europe,
with or without the euro, and that a combination of decay in Europe
and naive policies coming into the US
might bring us to something a bit like reliving the thirties.. if
indeed we would actually through a repetition of
that level of stress. The recent suicide in Greece, and the problems
in Italy and Spain and even France,
should be deeply worrisome to anyone open to reality.
Is there any way to defuse that ticking time bomb? Perhaps that is the
number one question many of us should be thinking very very hard and
very creatively about.
A few months ago, I thought about this question in very concrete
terms. If we need more aggregate demand in southern Europe,
but the Germans worry they would lose if they sent more money to the
government of Greece ("down the toilet"), what is the resolution of
the impasse? Concretely -- if Greeks (and Italians and Spaniards) need
more jobs, what can German money buy from them that
gives jobs but is a worthwhile investment for Germany? It seemed
obvious electricity. More precisely,
Germans are preparing to pay 20 cents per kwh for huge volumes of
offshore wind, when the lowest cost versions of solar thermal solar
power (dish Stirling) would offer electricity at only 13 cents per
kwh, in a far more reliable and useful time frame. Why not an
immediate pan-European investment (some kind of private-public
partnership) to inject huge amounts of money into building such solar
farms in areas of reliable sun in Greece, Italy and Spain? A great way
to reduce the risk of depression and create jobs, while
making a real profit, reducing dependence on Russian natural gas, and
doing something good for the environment, all at the same time. A real
Pareto optimum.
But -- I am reminded that this would require someone actually honest
and competent enough to lead the investment.
I remember the old saying: "If you think you have invented the perfect
form of government, imagine how it would be implemented if all the
positions were staffed by chimpanzees." Elevated titles and such
certainly do not guarantee competence in this kind of venture,
especially when vested interests are involved. And after all, why
don't the European banks do this all unilaterally anyway,
if there were not a problem of sheer technical competence here?
So here is a second possibility, perhaps a bit more realistic.
You know that the US has some of the same underlying problem as the EU
(except for the personal skills of President Obama,
which are far from infinite but are also notably a help here). You
know that government debt levels are also similar in China, if
provincial governments are included.
So why not a kind of aim for a strange kind of new ultra-G-$ meeting
(US, EU (Merkel?), China (Xi), Brazil) aimed
at some kind of monetary cease-fire, so we can all have low interests
rates to pay off debt?
And why not include in that agreement a big new infusion through IMF
to the World Bank, to a major effort NOT limited
to developing nations, to a kind of competitive financing (with even
competing funds in the Bank) to
develop minimum cost renewable energy, alternate liquid fuels and the
like, to the market?
The skills of the World Bank are not unlimited, any more than those of
the ECB (or of the folks who made the Solyndra loan in the US), but if
funds were restricted to certain class of investment, we wouldn't have
quite the same liquidity trap
which limits the aggregate demand benefit from today's monetary
easings. As I think of this, I see some analogies to funding issues of
NSF (where I work), of ARPA-E, and of mainline DOE and DARPA. Neither
they nor the European banks are infallible, but a '
proper structuring of risk, uncertainty, commitment to fund, and
diversity of channels ought to be able to do as well as
anything else humanity can do. And it would be a lot better than
falling into total paralysis and depression.
A competition with a focus, a commitment to act, and some diversity
should really do quite well.
Anyway, that's the best I can think of right now to try to defuse the
bomb. If we don't find someone to do SOMETHING,
it's your face and mine (along with a few million others) which may
get blown off, regardless of whatever else we do.
Of course, if you can think of any way at all to increase the
probability of defusing the time bomb, I would want to help.
Best of luck,
Paul
Dr. Paul J. Werbos
Not representing official views of NSF, IEEE, www.stateofthefuture.org, etc.
===================================================
===================================================
Soros' op-ed certainly describes other important aspects of this situation.
In a way, I's day my letter is like one eye, and his is like another;
one must see through two eyes to get
a correct three-dimensional picture.
There are certain technical details I left out of the letter to
Rachman. (I am usually leaving
out some technical details, because there are always so many of them.)
For example, when I wrote to Rachman, I was influenced by a message I
heard clearly a few days before from GE's
director of strategic policy, where he talked about the way funds have
dried up recently for many new energy projects.
"Appetite for risk" were the words he used. And Soros makes related
points. Part of our "liquidity crisis" is
actually a matter of fear. In a way, the threat of depression is
caused by a kind of prisoner's dilemma effect,
which strengthens a reflexive phenomenon. Of course, Soros is quite
familiar with the basic idea
and importance of reflexive phenomena, but this case is very special
in ways which go beyond
some of the examples he has seen before. I think of it in part as a
simple matter of the existence of multiple solutions
in the rational expectations model, where the choice of solution is
based on psychology. Actions to change the psychology,
for example by deciding we WILL invest X dollars in certain areas, can
make a crucial difference.
I also think of it as matter of how one organizes and allocates risk,
a topic which today's dynamic stochastic general equilibrium theory
does not yet do full justice to, because of the lack of consensus
about risk expectations. (NOT that we would
want to enforce such consensus!!)
=========================
A friend asked Summers: Do you know anyone is awake about
the risk of depression -- job loss and aggregate demand -- in the EU,
and about ways that energy investment could reduce the risk?
Summers was CERTAINLY aware of that risk in the US. But he said -- energy
is too small to make a difference.
=======
Added April 16: this morning, the Financial Times has an op-ed by Wolfgang Munchau which also clearly states that the real concern even among investors is about
the level of the overall economy (aggregate demand) much more than about the narrower issues of euro and bank solvency. I would be tempted to quote a sentence or two... but I think that FT prefers that people go to their web page for their material.
Even the best economics at "300,000 feet" often loses touch with reality.
If electricity is about 10 cents per kwh, OECD data show 20,000 terawatt hours per year... $2 trillion per year. And yearly US oil imports have been bouncing around another half trillion per year, with lots of risk of going much higher.
Those kinds of numbers really are enough to matter, especially if we start building up
new capital which generates flows at that kind of level.
Best of luck,
Paul
"the ticking time bomb that no one can defuse." I sent him an email (first item below)
on what the real time bomb is -- not the banks, not the euro, but the risk of a new Great Depression. In other words, jobs and aggregate demand. And I argued that
we CAN defuse it... if we use our brains a bit more effectively and really focus on the problem.
A few days after that, there was another op-ed by Soros which actually did seem
to be aware of the real time bomb... TO SOME DEGREE. A good start, but we need a lot more. So my comments on that, somewhat technical come next. And then a few thoughts
about a friend's discussion with Larry Summers..
=====================
=====================
---------- Forwarded message ----------
From: Paul Werbos
Date: Fri, Apr 6, 2012 at 2:56 PM
Subject: any way to defuse the time bomb about to blow up in your face
To: gideon.rachman@ft.com
Dear Mr. Rachman:
Thank you very much for your stimulating op-ed on the ticking time
bomb in the economy of Europe.
What scares me most here is that the biggest time bomb is not about
the euro or about the banks
(important as they are) but about aggregate demand. My worry is that
aggregate demand will keep slipping in Europe,
with or without the euro, and that a combination of decay in Europe
and naive policies coming into the US
might bring us to something a bit like reliving the thirties.. if
indeed we would actually through a repetition of
that level of stress. The recent suicide in Greece, and the problems
in Italy and Spain and even France,
should be deeply worrisome to anyone open to reality.
Is there any way to defuse that ticking time bomb? Perhaps that is the
number one question many of us should be thinking very very hard and
very creatively about.
A few months ago, I thought about this question in very concrete
terms. If we need more aggregate demand in southern Europe,
but the Germans worry they would lose if they sent more money to the
government of Greece ("down the toilet"), what is the resolution of
the impasse? Concretely -- if Greeks (and Italians and Spaniards) need
more jobs, what can German money buy from them that
gives jobs but is a worthwhile investment for Germany? It seemed
obvious electricity. More precisely,
Germans are preparing to pay 20 cents per kwh for huge volumes of
offshore wind, when the lowest cost versions of solar thermal solar
power (dish Stirling) would offer electricity at only 13 cents per
kwh, in a far more reliable and useful time frame. Why not an
immediate pan-European investment (some kind of private-public
partnership) to inject huge amounts of money into building such solar
farms in areas of reliable sun in Greece, Italy and Spain? A great way
to reduce the risk of depression and create jobs, while
making a real profit, reducing dependence on Russian natural gas, and
doing something good for the environment, all at the same time. A real
Pareto optimum.
But -- I am reminded that this would require someone actually honest
and competent enough to lead the investment.
I remember the old saying: "If you think you have invented the perfect
form of government, imagine how it would be implemented if all the
positions were staffed by chimpanzees." Elevated titles and such
certainly do not guarantee competence in this kind of venture,
especially when vested interests are involved. And after all, why
don't the European banks do this all unilaterally anyway,
if there were not a problem of sheer technical competence here?
So here is a second possibility, perhaps a bit more realistic.
You know that the US has some of the same underlying problem as the EU
(except for the personal skills of President Obama,
which are far from infinite but are also notably a help here). You
know that government debt levels are also similar in China, if
provincial governments are included.
So why not a kind of aim for a strange kind of new ultra-G-$ meeting
(US, EU (Merkel?), China (Xi), Brazil) aimed
at some kind of monetary cease-fire, so we can all have low interests
rates to pay off debt?
And why not include in that agreement a big new infusion through IMF
to the World Bank, to a major effort NOT limited
to developing nations, to a kind of competitive financing (with even
competing funds in the Bank) to
develop minimum cost renewable energy, alternate liquid fuels and the
like, to the market?
The skills of the World Bank are not unlimited, any more than those of
the ECB (or of the folks who made the Solyndra loan in the US), but if
funds were restricted to certain class of investment, we wouldn't have
quite the same liquidity trap
which limits the aggregate demand benefit from today's monetary
easings. As I think of this, I see some analogies to funding issues of
NSF (where I work), of ARPA-E, and of mainline DOE and DARPA. Neither
they nor the European banks are infallible, but a '
proper structuring of risk, uncertainty, commitment to fund, and
diversity of channels ought to be able to do as well as
anything else humanity can do. And it would be a lot better than
falling into total paralysis and depression.
A competition with a focus, a commitment to act, and some diversity
should really do quite well.
Anyway, that's the best I can think of right now to try to defuse the
bomb. If we don't find someone to do SOMETHING,
it's your face and mine (along with a few million others) which may
get blown off, regardless of whatever else we do.
Of course, if you can think of any way at all to increase the
probability of defusing the time bomb, I would want to help.
Best of luck,
Paul
Dr. Paul J. Werbos
Not representing official views of NSF, IEEE, www.stateofthefuture.org, etc.
===================================================
===================================================
Soros' op-ed certainly describes other important aspects of this situation.
In a way, I's day my letter is like one eye, and his is like another;
one must see through two eyes to get
a correct three-dimensional picture.
There are certain technical details I left out of the letter to
Rachman. (I am usually leaving
out some technical details, because there are always so many of them.)
For example, when I wrote to Rachman, I was influenced by a message I
heard clearly a few days before from GE's
director of strategic policy, where he talked about the way funds have
dried up recently for many new energy projects.
"Appetite for risk" were the words he used. And Soros makes related
points. Part of our "liquidity crisis" is
actually a matter of fear. In a way, the threat of depression is
caused by a kind of prisoner's dilemma effect,
which strengthens a reflexive phenomenon. Of course, Soros is quite
familiar with the basic idea
and importance of reflexive phenomena, but this case is very special
in ways which go beyond
some of the examples he has seen before. I think of it in part as a
simple matter of the existence of multiple solutions
in the rational expectations model, where the choice of solution is
based on psychology. Actions to change the psychology,
for example by deciding we WILL invest X dollars in certain areas, can
make a crucial difference.
I also think of it as matter of how one organizes and allocates risk,
a topic which today's dynamic stochastic general equilibrium theory
does not yet do full justice to, because of the lack of consensus
about risk expectations. (NOT that we would
want to enforce such consensus!!)
=========================
A friend asked Summers: Do you know anyone is awake about
the risk of depression -- job loss and aggregate demand -- in the EU,
and about ways that energy investment could reduce the risk?
Summers was CERTAINLY aware of that risk in the US. But he said -- energy
is too small to make a difference.
=======
Added April 16: this morning, the Financial Times has an op-ed by Wolfgang Munchau which also clearly states that the real concern even among investors is about
the level of the overall economy (aggregate demand) much more than about the narrower issues of euro and bank solvency. I would be tempted to quote a sentence or two... but I think that FT prefers that people go to their web page for their material.
Even the best economics at "300,000 feet" often loses touch with reality.
If electricity is about 10 cents per kwh, OECD data show 20,000 terawatt hours per year... $2 trillion per year. And yearly US oil imports have been bouncing around another half trillion per year, with lots of risk of going much higher.
Those kinds of numbers really are enough to matter, especially if we start building up
new capital which generates flows at that kind of level.
Best of luck,
Paul
Thursday, April 5, 2012
A children's view of our elections: Dr. Seuss or what?
Imagine a class of children talking...
A boy said: "I am so glad we are done with that primary stage. All those nasty old roadrunner cartoons, with the newt sunning himself on a rock and looking down on the other guys... now we get to something much nicer, like Dr. Seuss."
"Yes," said a girl,"We get to choose between the cat in the hat and the grinch."
"Hey," said the boy,"He's not a REAL cat in the hat. He only thinks he's the cat in the hat. He hasn't cleaned up his mess yet, and there are all those broken plates from when he tried to do some tricks that were a little too hard."
"On no," said the girl,"At least he's TRYING to be a good cat in the hat, and that's
better than being an old grinch. Besides, after the elections, he may have thing1 and thing2 to help him, and then the messes will get cleaned up."
"Hmm," said the boy. "I don't really believe in Dr. Seuss. I believe in Alice in Wonderland. That's the world we're really living in..."
"Oh yeah?," said another boy. "Which one is the mad hatter?"
"Well," said a girl, "We still have that sanctimonious rabbit running around.
But either one of the real candidates could be the mad hatter."
"No," said another boy,"Obama has to be the mad hatter, because Romney is the black queen. Nothing else fits so well. Whose coronation is that bunny racing to attend, after all?"
"I disagree," said a kind sweet Mormon girl. "I still like Dr. Seuss.
But you should remember that the grinch turned out to be the very best,
after he had a nice little girl to talk to him. Maybe that's all he needs...
and he was so nice to his wife when she was sick, unlike that terrible tin woodman from those Wizard of Oz primaries last time.."
And then a voice rolled in from the side, the voice of Romney,"That's right. I can be what you want, whatever it is. Any trick that cat can do, I can do too.
I can be a cat. I can be a friendly grinch. I can be R2D2, see... I can mold myself to anything you like.."
"Oh, no," said another girl," You're not REALLY plasticman. And we don't want plasticman anyway. I think you are PINNOCHIO. And you've been talking to too many foxes lately, who pull your strings... let's have a look at your nose...."
And then story time ended. For one day. Many very different stories to come.
====================
Next day: They say:"Almost, not quite. Isn't Newt Gingrich still there? Doesn't
he make a better mad hatter? Obama is more like the Cheshire Cat. And maybe Ryan
will audition for tweedeldum?" Well... maybe different tomorrow..."
A boy said: "I am so glad we are done with that primary stage. All those nasty old roadrunner cartoons, with the newt sunning himself on a rock and looking down on the other guys... now we get to something much nicer, like Dr. Seuss."
"Yes," said a girl,"We get to choose between the cat in the hat and the grinch."
"Hey," said the boy,"He's not a REAL cat in the hat. He only thinks he's the cat in the hat. He hasn't cleaned up his mess yet, and there are all those broken plates from when he tried to do some tricks that were a little too hard."
"On no," said the girl,"At least he's TRYING to be a good cat in the hat, and that's
better than being an old grinch. Besides, after the elections, he may have thing1 and thing2 to help him, and then the messes will get cleaned up."
"Hmm," said the boy. "I don't really believe in Dr. Seuss. I believe in Alice in Wonderland. That's the world we're really living in..."
"Oh yeah?," said another boy. "Which one is the mad hatter?"
"Well," said a girl, "We still have that sanctimonious rabbit running around.
But either one of the real candidates could be the mad hatter."
"No," said another boy,"Obama has to be the mad hatter, because Romney is the black queen. Nothing else fits so well. Whose coronation is that bunny racing to attend, after all?"
"I disagree," said a kind sweet Mormon girl. "I still like Dr. Seuss.
But you should remember that the grinch turned out to be the very best,
after he had a nice little girl to talk to him. Maybe that's all he needs...
and he was so nice to his wife when she was sick, unlike that terrible tin woodman from those Wizard of Oz primaries last time.."
And then a voice rolled in from the side, the voice of Romney,"That's right. I can be what you want, whatever it is. Any trick that cat can do, I can do too.
I can be a cat. I can be a friendly grinch. I can be R2D2, see... I can mold myself to anything you like.."
"Oh, no," said another girl," You're not REALLY plasticman. And we don't want plasticman anyway. I think you are PINNOCHIO. And you've been talking to too many foxes lately, who pull your strings... let's have a look at your nose...."
And then story time ended. For one day. Many very different stories to come.
====================
Next day: They say:"Almost, not quite. Isn't Newt Gingrich still there? Doesn't
he make a better mad hatter? Obama is more like the Cheshire Cat. And maybe Ryan
will audition for tweedeldum?" Well... maybe different tomorrow..."
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