Thursday, September 29, 2016

Answering Michael

September 29, 2016 At 6:35 AM
Let’s say that the first group of colonists rip a space suit and need a new one. Space suits are expensive, transporting them to Mars isn’t free. These colonists do represent a market, but in order to supply that market, they have to produce new wealth to trade for that space suit. Even if there were pure refined gold just sitting there waiting to be scooped into bins, you could not bring it back to earth and sell it for a profit. How are the colonists going to pay for that space suit, or anything else they need?

Great question Michael and the answer is simple.

A colonist damages his (or her) personal spacesuit beyond the ability of martian industry to repair. He contacts a colonist on earth preparing to leave for mars arriving perhaps a year in the future (a 3 month trip available every 26 months.) They discuss what the martian needing the suit can produce on mars in that year to trade for that suit and come to terms. That colonist doesn't have to personally produce these items since they can trade for some or all of those things with other martians. Meanwhile what suit does the colonist use? There will be spares that he can borrow or rent during that time. But being like most martians he may not even need a suit for that year because martians usually live in a comfortable shirt sleeve environment throughout the year. They also have the option of moving between such environments in sealed vehicles.

Where does wealth come from? Understand that export is not required.

Anyone thinking this isn't workable doesn't seem to realize this is already how it works on earth. If you can't afford the cost, you do without.

Wednesday, September 28, 2016

Elaboration on the mars economy

See this first.

The following is of course simplified:

Suppose we have 100 colonists on mars. Each can produce a certain amount of various products. Products essential to life support include energy, water, food, breathable air, etc. These must be produced on average above 100% of the colonies requirements (above because dips below 100% means some casualties. A safe reserve must always be maintained.) Other items will also be in demand but could be produced at less than 100% of demand without loss of life.

Planners determine that each colonist needs X solar panels and storage batteries for there energy needs. If a colonist produces less than 100% of their life support needs they will have strong demand for more, meaning they will be willing to pay more for it. If they produce 100% they will still have some demand for more but will be price sensitive. If they produce more than 100% of their life support needs some will be available for industry and some for resale. The labor requirement for producing energy will be low; mainly the result of how many solar panels (or other means) they deploy. Any profits they have may be reinvested to produce an increased rate of production.

Unlike energy, food comes in varieties that encourage more trade opportunities. Some food is more storable while other food is more perishable. Basic farming using Zubrin's example would require about an hour of labor per day to produce more than 300% of the colonies needs. Even though colonists could produce more than 100% of their needs demand and trade will be strong due to the desire for variety. As farming becomes more efficient a lower percent of the colony will be engaged in it.

Supply, demand, labor and such will be similar for other items. The invisible hand, a principle that can hardly be denied, will insure that production meets need. Note that exports have not been mentioned because none are required for this model to work.

Suppose items A and B are essential and items C and D are not. Colonist zero spends various amounts of his time during the day producing 50% of A, 20% of B, 10% of C, and 40% of D. Note these are percentages of the colony's average individual demand. This is not 120% of the individuals production capability. It may be more like less than a quarter of that.

Colonist zero must buy 50% more of A and 80% more of B. Zero keeps 5% each of C and D and sells the rest. Assume zero has a reserve of A and B that are not part of this calculation.

The colony overall produces 120% of both A and B. It produces 50% of demand for C and D.

The price for A and B will be relatively low and kept there by competition. The demand for C and D means the price will be somewhat higher and those producing it will have an incentive to produce more.

In this situation colonist zero will have 99 potential customers (though not all for all products because some will obviously be sellers rather than buyers of some items.)

What happens if production of items C and D rise to meet demand so that colonist zero can no longer sell enough of C and D to pay for what he must have of items A and B? Either he will sell his labor or start producing item E (assuming s/he is already producing as much of A and B as s/he is capable.)

The bible principle is very simple... if they don't work, let them not eat.

Sunshine is money

This post is dedicated to Jerry Pournelle, who got it right almost 50 years ago, and all those that continue to get it wrong today.

Reagan once famously said, “the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” This truth isn't limited to liberals. The intellectually insecure and lazy are often unwilling to test their assumptions. The assumption that I will prove isn't so, using just basic math, is that mars requires exports to be economically viable. It doesn't. That is not to say mars will have no exports because information, in forms from research to entertainment, will certainly be a mars export. But this only enhances mars economic viability. It is in no way required.

Let's start with a given... economic viability requires that income be greater than expense. Can we agree on that? Expense includes everything required to live. If some part of income above expense is retained this eventually leads to wealth. What are the details?

What Pournelle got right is that viability starts with having enough energy. Energy is the primary critical requirement. The useful energy must not only be enough for life support but also enough to manufacture a means to acquire more excess useful energy over time. Industry requires it.

Sunlight, converted into useful energy, is one very important income source. Just like on earth, this commodity can be traded among martian colonists for other assets. It is money. How much is produced by each colonist and how much is purchased by each is an economic choice like any other. That energy isn't just that which is converted to electricity. It is also the energy stored in plant growth. Plants are also money. The options of what to grow and trade makes for a very robust market. Do I have to continue in saying that minerals are also money. To be viable they simply have to be worth more to other colonists than the cost of extraction.

Where does the money to buy things come from? You missed it, didn't you? Read that last paragraph again, except with some insight.

Any martian that can produce anything another might want has produced wealth. Pieces of paper are not money. They are a convenience. Barter is an inconvenience that money cures. That's mainly all it is. So let's get even more basic...

Mars is economically viable if the life of each martian is viable. So let's take a closer look at that. You will note that no export to earth other than possibly data will be mentioned.

A martian starts out on earth buying a ticket to the surface of mars. That money comes from each ticket purchasers savings. No mystery involved. Elon Musk says to make this work the trip will send a lot of people at a time on a quick 3 month trip every 26 months. That ticket will include provisions consumed during the trip and personal property once they arrive (including a space suit.)

There will be a bootstrap period for the first colonists where abundant presupply will have to be sent first, but we are going to focus on the colonist that arrives later on mars with a spacesuit and just a few hundred kgs. of personal property. They have just enough consumable provisions to meet up with colonists that have been on mars for at least 26 months.

Some things can be made on mars and for some time other things will not be. Life support comes in a variety of forms. The lander will have life support as will a spacesuit (although of a shorter duration.) These are both subject to damage that may be difficult to repair. So the first order of business for our new colonist is to trade for a habitat that uses locally repairable life support components. That habitat is a trade good those on mars for the last 26 months or more can produce with just local labor and materials. That habitat could be paid for immediately with some items from earth or over time as part of a labor or some other agreement. The early colonists will have an advantage over later because there will be so many unique things they can import from earth (just in plant varieties alone) that they may be able to hold onto monopolies for some time. Unique skills will also be a valuable import.

Those habitats may or may not be completely self contained. Either works. If not, then the person living there must have tradable skills to make up for any deficiencies. That will not be difficult especially early in the life of the colony. Even basic labor alone will be in great demand. Beyond that, a colonist may have skills in short supply that raises their value even more. Is this really so difficult to imagine and note it involves zero export to earth?

Now for the simple math I promised. So simple it doesn't even require numbers!

Each colonist will have the ability to produce. How much and what is totally up to them but the invisible hand will be hard at work. Their market will be every other colonist. Known as a one to many relationship that applies to each and every person.

Can a colonist produce all of their own needs? It doesn't matter. What does matter is, can they produce some things in excess of their own needs. Of course they can. Each colonist willing to put in the effort can therefore produce wealth. If each colonist can produce wealth, so does the colony.

It's not that complicated. Put away your economics books and equations and just think.

Over time, industry will be built. Earth can participate in this wealth creation the same way we do in any other foreign stock market with zero export required.


Tuesday, September 27, 2016

Trump's lost opportunity

"Hillary, you're lecturing us on cyber security? How many of our operatives had to flee for their lives or lost them because of your felonious handling of our government's secrets?"

Trump-Clinton debate transcript SCORED

The transcript.

HC: We also have to make the economy fairer. That starts with raising the national minimum wage and also guarantee, finally, equal pay for women's work. (-2 issues that only win with ignorant voters.)

DT: they're using our country as a piggy bank to rebuild China, and many other countries are doing the same thing. (+1)

DT: We have to stop our companies from leaving the United States (+1)

DT: I'll be reducing taxes tremendously, from 35 percent to 15 percent for companies (+1 this is not a tax break for the rich. This is a tax break for consumers in any competitive market.)

HC: the kind of plan that Donald has put forth would be trickle-down economics all over again. (0 DT's last plus one covers this.)

HC: I believe is the more we can do for the middle class... (-1 because she's lying. She wants to raise taxes on the middle class.)

DT: When we sell into Mexico, there's a tax. ...When they sell into us, there's no tax. (+1 free trade is only free trade when both sides use the same rules. Reagan pointed this out.)

DT: She's been doing this for 30 years. And why hasn't she made the agreements better? (+1)

HC: Donald was one of the people who rooted for the housing crisis. He said, back in 2006, "Gee, I hope it does collapse, because then I can go in and buy some and make some money." Well, it did collapse. DT: That's called business, by the way. (+2 Trump)

HC: Some country is going to be the clean-energy superpower of the 21st century. (-3 This is the definition of govt. policy disaster.)

HC: Donald thinks that climate change is a hoax perpetrated by the Chinese. I think it's real. DT: I did not. I did not. I do not say that. (-1 Trump. This is a very weak response by Trump. He should have just let it slide.)

DT: She talks about solar panels. We invested in a solar company, our country. That was a disaster. (0 Trump is right but should have included details.)

DT: The Obama administration, from the time they've come in, is over 230 years' worth of debt, and he's topped it. He's doubled it in a course of almost eight years (0 Trump is right but said it in a way that destroyed its impact.)

DT: For 30 years, you've been doing it, and now you're just starting to think of solutions. (+2)

DT: Your husband signed NAFTA, which was one of the worst things that ever happened to the manufacturing industry. HC: Well, that's your opinion. That is your opinion. (+1 Trump.  Hillary's response is weak.)

DT: you go anywhere you want, Secretary Clinton, and you will see devastation where manufacture is down (+1)

DT: You called [TPP] the gold standard of trade deals. You said it's the finest deal you've ever seen.

HC: No. (-1 She lied again.)

DT: are going to regulate these businesses out of existence. (+2)

DT: I think I should -- you go to her website, and you take a look at her website. (+0)

dt: She tells you how to fight ISIS on her website. I don't think General Douglas MacArthur would like that too much. (+1)

HC: I have a feeling that by, the end of this evening, I'm going to be blamed for everything that's ever happened. DT: Why not? (+1 Trump. Reinforces the idea that Hillary has had decades to fix things.)

HC: $4 billion tax benefit for your family. (-1 Wow. Hillary just claimed Donald pays a lot of taxes!!!)

DT: Typical politician. All talk, no action. Sounds good, doesn't work. (+1 This should have been Trump's theme for the entire debate. He should have even complemented her on how well she talks lie a politician.)

DT: Our country is suffering because people like Secretary Clinton have made such bad decisions (+1 A simple powerful declarative statement which is what he should have stuck with.)

Releasing tax returns (-2 DT needed a prepared, succinct answer.)

HC: when he was trying to get a casino license, and they showed he didn't pay any federal income tax. DT: That makes me smart. (+1 DT)

HC: So if he's paid zero, that means zero for troops, zero for vets, zero for schools or health. (0 channeling Elizabeth 'You didn't build that' Warren.)

HC: It was a mistake, and I take responsibility for that. (As long as she isn't held responsible.)

DT: That was more than a mistake. That was done purposely (0 He keeps talking which weakens his point.)

DT: I am very underleveraged. ... I have a tremendous income ... It's about time that this country had somebody running it that has an idea about money. (0 would have been +2 if he said it w/o the parts I ellipsed.)

DT:'s one thing to have $20 trillion in debt and our roads are good and our bridges are good and everything's in great shape... (+0 He didn't finish the thought clearly.)

DT: it's politicians like Secretary Clinton that have caused this problem. (+1)

HC: you wouldn't pay what the man needed to be paid, what he was charging you to do...  DT: Maybe he didn't do a good job and I was unsatisfied with his work... Which our country should do, too. (0 But Trump made a reasonable point.)

DT: I take advantage of the laws of the nation because I'm running a company. My obligation right now is to do well for myself, my family, my employees, for my companies. And that's what I do. (+1 It can't be said any plainer than that.)

DT: When we look at the budget, the budget is bad to a large extent because we have people that have no idea as to what to do and how to buy. The Trump International is way under budget and way ahead of schedule. And we should be able to do that for our country. (+1)

Everybody agrees racism is worse since Obama took office (-3 DT because he didn't make this plain point.)

 Stop-and-frisk was ruled unconstitutional in New York (0 Trump made the point it's used effectively and is law in other places but did it ineffectively.)

DT: Lester, we need law and order. And we need law and order in the inner cities, because the people that are most affected by what's happening are African-American and Hispanic people. And it's very unfair to them what our politicians are allowing to happen. (+1 This resonates with those experiencing it.)

DT: ...the African-American community has been let down by our politicians. They talk good around election time, like right now, and after the election, they said, see ya later, I'll see you in four years. (+1)

Birther issue (-2 DT because he continues to allow this issue to linger.)

HC: he tried to put the whole racist birther lie to bed. (+1 racist is a dog whistle, but effective.)

DT: last week, your campaign manager said it was true. So when you tried to act holier than thou, it really doesn't work. (+1 Classic winning Trump.)

DT: we, along with many, many other companies throughout the country -- it was a federal lawsuit -- were sued. We settled the suit with zero -- with no admission of guilt. It was very easy to do. (0 Hillary uses this to successfully paint Trump a racist with some, but Trump has the correct response.)

cyber security (0 Trump blew his chance for a knock-out punch.)

DT: She's been trying to take [ISIS] out for a long time. But they wouldn't have even been formed if they left some troops behind (+1)

HC: the only way that American troops could have stayed in Iraq... (-1 the only way???)

DT: ...we've been working with them for many years, and we have the greatest mess anyone's ever seen. You look at the Middle East, it's a total mess. Under your direction, to a large extent. (+1)

DT: you were secretary of state when [ISIS] was a little infant. Now it's in over 30 countries. And you're going to stop them? I don't think so. (+1)

nuclear weapons in the hands of other countries (+2 HC. Trump could have used Ukraine as an example. The US negotiated nukes out of Ukraine's hands allowing Russia to annex Crimea. The point can be debated, but the left would rather use the issue as a club.)

DT: The single greatest problem the world has is nuclear armament, nuclear weapons, not global warming, like you think and your -- your president thinks. (+1)

DT: Russia has been expanding their -- they have a much newer capability than we do. (0 An important post debate topic.)

DT: I would certainly not do first strike. (0 Lost in the noise.)

DT: It was actually $1.7 billion in cash [to Iran.] (0 Again lost in the noise.)

DT: All of the things that she's talking about could have been taken care of during the last 10 years, let's say, while she had great power. But they weren't taken care of. And if she ever wins this race, they won't be taken care of. (0)

Stamina (+2 HC. Her poise during this debate gives her the win regardless of the point count. Trump, if he can, needs to do better.)

DT: We have made so many bad deals during the last -- so she's got experience, that I agree. (+1)

HC: [Donald has said] women don't deserve equal pay unless they do as good a job as men. (0 A missed opportunity for Trump. His response should have been, "So you're suggesting they should get equal pay even if they don't do as good a job?")

DT: ... $200 million is spent [by her campaign], and I'm either winning or tied, and I've spent practically nothing. (+1)

Trump won on points but Clinton won on presentation.

Sunday, September 25, 2016

More biased reporting

They can't even pretend to be unbiased. From the title I thought it might be a neutral article.

Here's the authors take on a Lauer interview.
Trump has very little idea what he's talking about and when pressed on a clear contradiction he starts making up new nonsense to avoid addressing the question.
Is that right? What Trump said is he has a good chance of becoming president. Correct. In that case, unlike Obama, it would be stupid to inform ISIS of his plan. Correct. Lauer falsely accuses Trump of having no plan. What Trump is clearly saying is he will listen to his generals. There is no contradiction.
Trump is extremely ignorant when it comes to public policy.
Trump is not a political wonk. He has an average business persons understanding of the issues, but with the executive ability to look deeper into things and listen to expert opinion. The farce is to believe a chief executive is suppose to have detailed knowledge and polished answer for every conceivable question. It's a stupid f%$&^g game the press plays that does less than no service to journalistic integrity.
it's usually pretty obvious he's just making things up.
This is the no win scenario. He doesn't generally have polished prepared answers like a politician would. This is actually a good thing. A real journalist, not looking to just antagonize, could actually use this fact to do their job better. Trump's other option is to tell the journalist he needs to defer his answer until after he's given it more thought. How well would this perfectly reasonable response fly with these antagonists? No win possible.
I think it would be highly advisable for Clinton to confront Trump on birtherism.
Why? Because of the authors biased hope that this non issue could harm Trump.
If [Hillary] can deliver a strong performance which cuts against perceptions.
True perceptions that she's a liar and a crook that used government to enrich herself even if it meant treason against this country, risked American lives and kept the poor in poverty (See Haitian relief.) Being careful not to raise expectations this 'reporter' can't help slobbering.
Absent a teleprompter, Trump has shown no ability in eighteen months to be anybody but himself in public.
Think about it. Trump can't win with this guy. He's basically admitting that Trump can give a good prepared speech. He's also suggesting Trump would do better if he actually was a con man. He's saying Trump is real. All the while implying this is a bad thing. The media hasn't just attempted to blind us, they're completely clueless themselves. I will be glued to this first debate.

The catastrophic collapse of all of the political pundits’ predictions.