Sunday, December 30, 2012

high speed trains -- could California and China do even better?

There are times when the state of California does more to create real progress
towards sustainable energy than the federal government does.
Thus I was intrigued this morning to bump into a new project which may or may not
survive the "fiscal cliff":

One vision of this is that we burn a whole lot of "oil" in airplanes --
which may be our biggest dependency on fossil oil after cars and trucks
are accounted. Could we build a network of high speed trains roughly
as fast and as cheap and as safe as commercial airplanes, with a higher degree of convenience
and comfort? As one way to reduce or eliminate oil dependency in that sector?
In fact, China is making massive investments in its new network of high speed trains,
which does all of that EXCEPT for the speed part. This week, they announced the opening of
an important new line, eight hours from Beijing all the way down to the Hong Kong area
in the far south -- a huge improvement in speed, but still more than twice the time
of airplanes from station to station.

The question naturally arises: would it be possible to do what China is doing, for trains
almost as fast as airplanes, at the same cost per mile as what China is paying?
(Since maglev trains are faster, this would actually mean less cost PER TRIP --
you get more trips on the same line, and more trips per train.)

The answer, objectively, seems to be "probably yes, if anyone cares, and if someone follows up."

California is not paying for the least cost technology. But a lower cost technology does seem
possible. See:

 I have done some further checking this week. It seems as if there is a path forward to do justice to
this solid possibility (with the usual mix of serious risk, serious hope, and a need for intelligent adaptability). But it also seems that people do not yet know about it. Myself, I am overwhelmed
by other causes, some "mine" and some not, so I can't do justice to this one. But I view it
as bigger than CHP, for example, and I do hope someone knows a way to follow up.

None of the comments here reflect the official views of NSF, of course. But I do have some knowledge well beyond this brief posting. In 2009, I did have email contact with Thomas Lipo and Jonathan Bird, learned more about the technology, and suggested that they send a proposal to the Energy, Power and Adaptive Systems (EPAS) program, for which I am normally one of the three Program Directors. But that year, since I was on loan to the office of Senator Specter, I could not fund or handle it myself; it was funded by Geworge Maracas, after peer review. All I could do was offer a bit of guidance. And Specter himself (and Matthew Kelly who later moved from his office to Amtrak) should get credit for encouraging me to look a bit deeper into trains, that year. The news from California and from China moved me to do one more check this past week... before I move back to planning and giving lecture 9 in the series also posted here. 

Also -- I do not mean to propose this as a "silver bullet" for the jet fuel problem.  In most key areas,
we need to develop SEVERAL promising possibilities, to be sure of finding the best. For the jet fuel problem, I envision a mix of several things in the future. I am excited by the rechargeable lithium-air batteries actually developed by Excellatron ( and by their calculations, working with people at Argonne and Rolls-Royce, suggesting that ELECTRIC AIRPLANES
designed like a Boeing 777 could have a range of 4000 kilometers, cutting energy costs by a factor of four, and substantially reducing the cost of airplane tickets. (Yes, it takes a new engine, but they have cutaways of the design.) And of course, alternate liquid and gaseous fuels provide another
technology path towards meeting the commercial airline market even after fossil fuels run out. Three main pathways to sustainability.. all of which call out for full justice.  But no one should imagine that any government on earth is doing full justice to any of the three.

Thursday, December 20, 2012

fiscal cliff -- not at all what you hear

I am not sure of the details here, since I haven 't had time to study the Obama and Boehner "B" offers
in detail, but it does seem very clear that the press discussions are confused. And "going over the cliff" doesn't mean what many imagine.

First, the differences between Obama B and Boehner B seem to be much less that people imagine --
much less than the difference between either and "fiscal cliff." BOTH of them avoid an immediate drop in demand, BY POSTPONING DEFICIT REDUCTION TO FUTURE YEARS. They bite less now, and more later. Any true Tea Party person dedicated to the single goal of deficit reduction would simply prefer the cliff. Anyone else... well, maybe the parties should agree on the key numbers of WHEN the deficit reduction kicks in, to what degree, and on the overall tax versus spending ratios
(maybe just the same as in the fiscal cliff status quo), FIRST, in law, getting rid of debt ceiling issues
contingent on adhering to the agreement.

Next -- Obama has given a WHOLE lot. The bar charts I have seen show about half the deficit reduction coming form "taxes" (i.e., higher than the temporary Bush rates) and almost half
from social security and medicare, and only about 10-15% other government spending 9which Boehner's does not cut at all). It seems quite plausible to me that Democrats in the Senate
would simply not put up with what Obama has already offered. MAYBE they can find just enough
Democrats to vote for cutting social security and medicare, combined with non-Tea-Party
Republicans, but for a given level of deficit reduction, many Democrats would conclude that
this deal is no better for escaping recession than the fiscal cliff would be, and they simply may not accept the mantra that "cutting entitlements" (social security and medicare) is the right thing to do.
It's like offering the middle aged folks in the US a kind of vast credit card swindle, where they
get more money in the short term, but pay for it in spades later on. Maybe Obama could convince them that he can do a lot of that just by improving efficiencies in health care, but maybe not.
Boehner certainly couldn't.

So the chances of a cliff are looking greater by the day...

But again, that's just a quick impression today, between tasks I put more energy into....

Saturday, December 1, 2012

Running from the fiscal cliff – or running from reality?

Running from the fiscal cliff – or running from reality?

This week, the smart money is betting more than 50-50 that we will “fall over the fiscal cliff,” that agencies like NSF and NASA and DOD will all be cut by more than 8% immediately, that unemployment will tick up by more than 1%, and the lots of folks will freak out in a way that makes the outcome even worse.

That’s true – but the efforts to “avoid the fiscal cliff” right now are screwed up, in a way which explains a lot of the pessimism.  The “fiscal cliff” is all about last year’s “sequestration law” coming into effect a month from now.  Demonizing that law has gone too far. By demonizing the law, ironically, we make it more likely that it will come into effect. UNLESS we change our way of thinking, it now looks 70% probable that it will come into effect, and maybe 20% probable that Congress will cancel the deficit reduction and freak out world markets in that other way. Hold onto your jobs, folks! And to your backup plans!

Why are they likely to fail? They basically are viewing the sequestration law as a great failure, which they don ‘t want to think about except to run away. And so they are trying to reinvent a new solution to exactly the same problem (deficit reduction) which members of Congress worked on very intensely over a year or two before now. The sequestration bill was the outcome of extremely intense bipartisan discussions and efforts over a long time. How can anyone imagine that Congress will do better in just one month than it could in two years, if it formulates the problem form scratch in exactly the same way as it did before, without any anchor points at all to limit the random groping?  (Did the elections change things? A little, but not much; some things are easier now, and others harder – but let me not get deeper into those “weeds” just yet.)

In my view, the only way to do much better than the sequestration bill is by STARTING from what was already achieved. In particular, that bill specifies what level of deficit reduction, what level of total taxes, and what level of spending will take effect at the start of 2013. Did they make the best choice for those three all-important numbers? Most of us would say no – BUT IF THERE IS NOT enough support in Congress to change any of these three numbers, our chances of doing better than the sequestration bill depend on our ACCEPTING those three numbers and acting within the limits of the constraints which they provide.

Now don’t get me wrong. It would be fine for the Congressional leadership to get together to try to see if they could get agreement in the Senate and also in the House to change the three numbers, perhaps by shifting schedules a little or perhaps by inserting promises for tax breaks that the wealthy MIGHT get in the future automatically IF certain objective criteria are met (like low unemployment and a balanced budget). But the main attention should shift to REVENUE NEUTRAL ways to shift taxes, and to shift spending, each in order to help the economy recover, without  changing the total level of taxes or the total level of spending. The war between less taxes versus more spending, in general, simply needs to be taken off the table, to have much chance of doing any better than what we already can expect.
We also need to think about options to increase jobs without major effects on total taxes or total spending.

When I put it that way, it may sound a whole lot harder. But in fact, it IS hard to do better than the sequestration bill, and we can only do better if we really focus on the hard problem.

So for example, how do we realign total taxes, when total taxes are scheduled to go up under the sequestration bill, without losing as many jobs as that is now likely to do? The obvious answer is to cut back on taxes which reduce jobs and demand, while cutting back to special favors and loopholes which do not produce as many jobs. (They all produce jobs; it’s a matter of HOW MANY, something which real mathematical economists have studied for decades all over the world – arriving at realities somewhat different from the pious hopes form all the various PR departments. People who believe their own propaganda too much do risk driving themselves broke, and the rest of us with them.)

Romney claimed he could find enough real loopholes, nonproducing tax breaks, to allow us to restore ALL of the tax breaks which expire under the sequestration bill. It would be best if Republicans would work hard to make more concrete suggestions about this. In truth, I do not believe that cutting back on the mortgage deduction (at least for middle class people) is one of those nonproductive tax breaks; it not only puts money into people’s pockets, to spend, but it also incentivizes home construction, an area where unemployment is especially bad fright now. It’s  a dumb idea. On the other hand, the oil industry has obtained a whole lot of special tax breaks which are not likely to haver any effect on the level of jobs in the US in that industry; those jobs are driven much more by the demand for gasoline, and the availability of new technologies, which would be funded easily enough even by banks if the oil companies were not already flush with cash. Sure, the lobbyists can argue for a LITTLE incentive effect, but it’s clearly a whole lot less than the home mortgage or the payroll tax reductions.

In fact, if we don’t welsh on deficit reduction (which should be agreed on up front,
If it’s going to happen), it is really hard to do a whole lot, I think. Unless Romney really has some ideas, above and beyond those oil industry special breaks which I know about.

I am not sure that both parties could come up with enough low-productivity tax breaks and loopholes to eliminate in order to restore even all the tax breaks for the middle class (98% of the population, as the President is now proposing to help).
I hope so. But maybe the best starting point would be to come up with enough just to permanently restore the reduction in payroll taxes and in AMT requirements (which affect the sheer burden of filling out and planning for taxes), as a first stage. Get agreement on that first, and pass it as a kind of amendment to the sequestration law, the starting point. And if we can then move on to restore more, try to do that.
Step by step, there is hope of progress – at least a little better than the sequestration bill. But reinventing the wheel won’t do anything, no matter how grand the fantasies which go into it.

The same thing applies to shifts in spending cuts. I don’t expect shifts anywhere near as massive as some folks are hoping for, starting from the sequestration law.
If the President says he can see some ways to improve efficiency in medicare and Medicaid, saving money for use elsewhere, that sounds both smaller than many hope for but also more realistic, a way to do some first aid in crucial things – like
student loans and other relatively less expensive things crucial to our underlying capacity as a nation, and to the spirit of hope and American dream which is far more crucial to our productivity than the size of people’s yachts. I don’t think it is politically realistic to imagine both houses of Congress approving the reduction or voucherization of social security which some folks lust for.

Are there other ways to increase jobs a lot without making the deficit worse? In my view, there are, but they depend on other tracks – and they also involve some issues beyond the reach of political folks. For example, there is a very serious independent inventor in Michigan, CEO of a company in another area, who could give us a new lower-cost solar thermal technology, which, when coupled with new permitting rules (making it harder to block renewable energy projects and the required transmission connections) and German-style feed-in tariffs, could stimulate a whole of benign new private sector investment, yielding new jobs without government spending. The multiplier effects of such investment would far exceed the initial transitional costs. Probably companies like GE would jump on this opportunity – IF
the guy in Michigan bothers, and if the right legal envcironment is created. And similar things could be done internationally – which is essential, in an era where the economies of US, EU and China are really just one tightly integrated dynamical system.  

In sum, the problem can be solved. We don’t need to have an increase in unemployment. But it takes new thinking, and right now the discussions between all parties in Washington is on a course to disaster. Someone better placed than me needs to job their brains…