Drug war logic repeated on China currency question

Lemme see: inside every Chinese peasant is an American consumer just waiting to break free!

Stephen Roach piece in WSJ.  He's the former Asia head for Morgan Stanley now back to Yale.

Roach is one of those economists who points out that past experience with Japan says gets a revalued currency won't change our foreign trade deficit with China, which is really with Asia as a whole and has been consolidated by China over the past decade or more through its efforts to become the final assembler of note.

Some bits:

The currency fix won’t work. At best, it is a circuitous solution that would address only one of the many pressures shaping the imbalances between our two nations; at worst, it would lead to a trade war, or risk jeopardizing China’s understandable focus on financial and economic stability.

Besides, in a highly competitive world, there are no guarantees that currency shifts would be passed through to foreign customers in the form of price adjustments that might narrow trade imbalances. Similar fixes certainly didn’t work for Japan in the late 1980s, and haven’t worked for the United States in recent years . . . 

Contrary to accepted wisdom, America does not have a bilateral trade problem with China — it has a multilateral trade problem with a broad cross-section of countries.

And why do we have these deficits? Because Americans don’t save. Adjusted for depreciation, America’s net national saving rate — the sum of savings by individuals, businesses and the government sector — fell below zero in 2008 and hit -2.3 percent of national income in 2009. This is a truly astonishing development. No leading nation in modern history has ever had such a huge shortfall of saving. And to plug that gap, we’re left to borrow and to attract capital from lenders like China, Japan and Germany, which have surplus savings.

If Washington were to restrict trade with China — either by pushing the Chinese currency sharply higher or by imposing sanctions — it would only backfire. China could very well retaliate against American exporters, and buy goods from elsewhere (a worrisome development in what is now America’s third-largest export market). Or it could start to limit its purchase of Treasury securities.

The United States would then have to turn to some other nation or nations, at a higher cost, to finance our budget deficits and make up for our subpar domestic savings. The result would be an even weaker dollar and increased long-term interest rates. Worse still, as trade was redirected away from China, already hard-pressed American families would be forced to buy products that are noticeably more expensive than Chinese-made imports.

But Washington remains unwilling to address our unprecedented saving gap, and instead tries to duck responsibility by blaming China. Scapegoating may be good politics, but proposing a bilateral fix for a multilateral problem is just bad economics.

China should stay the course with its measured currency reforms, allowing the renminbi to continue to appreciate gradually and steadily over time. Contrary to the inflammatory rhetoric of China’s critics, this is not “manipulation.” It is a reasonable strategy to anchor the renminbi to the world’s reserve currency, the dollar, in an effort to maintain financial stability in an all-too-unstable world.

True, but by doing so (see reference #2), China is creating a beggar-thy-neighbor bandwagon effect, as Taiwan, Japan and South Korea all start intervening to keep their currencies cheaper, to the point where Brazil's finance minister declares that an "international currency war" has broken out.

Roach then goes on to talk about fixing China's low consumption rate (only 35% of GDP, or about half of the US), but here I think he falls into the trap that Michael Pettis warns about: there is no easy shifting from investment driving most growth to consumption stepping up.  In short, anything but a slow redirect gets a crash, and so long as the redirect is slow, it's unlike to effect a serious shift.  When you stack those two analyses one on top of the other, you get the feeling that China will go on as it does (addicted to exports) until a crash there forces otherwise.  It would seem we've taken sufficient lumps to force the necessary change here--one hopes, which is the big reason why we feel so down on ourselves right now while wildly elevating China in our minds.

But as I like to say, the China model is brilliant until the first big crash.

The thought that prompted the post was that, just like in the drug war, we want our "enemy" to stop exporting so much of that stuff to the U.S., when it's our demand for that stuff and our lack of self-control which is the real issue.  But as Roach points out, we don't like to deal with our own issues, and in a classic psychological trip, we transfer our anger over our lack of self-control by blaming our "dealer."

Not exactly the Opium Wars, but you get my drift.

WPR's The New Rules: Global Warming Shifts Focus to Friendly North

 

From the Arctic Council's website.

According to virtually all global warming projections, humanity faces significantly more conflict in the decades ahead as we fight over dwindling resources in climate-stressed lands. However, those reports typically overlook one likely outcome that could counterbalance the more negative impacts of global warming -- that of northern territories becoming significantly milder, more accessible, and, most intriguingly, more hospitable to immigration. This is the essential good news to be found in Laurence C. Smith's fascinating new book, "The World in 2050."

Read the entire column at World Politics Review.

Read about the book because of Smith's piece in the WSJ, which I blogged.  Asked Putnam for the book and got it pronto.  Like I hint at in the piece, Smith's survey of futurism was only average and didn't really add anything to the book.  I have no idea why he or his editors felt the need to promise "the world in 2050," because the text simply doesn't deliver. But the book-within-the-book on the "New North" was eye-popping. I would have loved to hear more about that and skip all the surveying.

USA-EU differences on role of PRC

FT piece on polling that says Euros take more pessimistic view of China possibly showing global leadership in years ahead than Americans do.  Oddly enough, the Germans were the most pessimistic.  Why odd?  Germany is doing so well economically WRT China.

Polling by German Marshall Fund.

Data says Americans to the tune of 91% predict China will exert strong leadership within next five years.  That may just be our ennui talking.  Only two-thirds of Euros think this.

I think the Euros are being more realistic, as I think China global leadership will be underwhelming for a long time.  Bluster will go up, as will hubris, but serious visionary leadership?  Not China's style nor comfort level--not yet.  In a single-party state, people who go out on ledges get pushed off.

Charts of the Day: World Economic Forum survey on US competitiveness

Annual WEF "most competitive country ranking," where US now drops to fourth after Switzerland, Sweden and Singapore.

Of course, my usual counter is to say we're comparing a multinational state of 50 members to unitary states, so just as reasonable to see where those three stack up against our 50 individuals members as the other way around, but I quibble.

What's interesting is checking out the details, as in, when you see where we're still near the very top (innovation, labor market, business sophistication, higher education, infrastructure, technology--almost all in the private realm) versus where we've fallen lowest (public spending, public debt, national savings rate--more in the political realm).

So the question begs: What is really "broken" in America?  Capitalism or the political system?

Why China will continue to disappoint as a "near-peer" rival

NYT's Keith Bradsher in early Sept regarding a visit by Larry Summers in Beijing:

Top Chinese officials are calling for quiet discussions instead of open friction with the United States, after a summer marked by bilateral disagreements over the value of China’s currency, American military exercises off the Korean Peninsula and American efforts to resolve territorial disputes in the South China Sea.

State media showed China’s president, Hu Jintao, meeting Wednesday with Lawrence H. Summers, the director of the National Economic Council, and Thomas E. Donilon, the deputy national security adviser. American and Chinese officials have been trying to lay the groundwork for a state visit to the United States this winter by the Chinese president.

Wednesday’s meeting with Mr. Hu followed earlier talks this week in Beijing by the two American officials that were aimed not at fashioning new pacts, but at maintaining a dialogue that had been strained at times in recent months.

“Strategic trust is the basis of China-U.S. cooperation,” said Dai Bingguo, a Chinese state councilor who met with them, the official Xinhua news agency reported.

Prime Minister Wen Jiabao told the two Americans that China and the United States should not view themselves as rivals, according to the Chinese state news media.

Part of the dynamic we witness in elite US circles right now is an attempt to redirect our fears away from non-state actors and back toward the rising "near-peer"--an old Pentagon code phrase for China.  It is seen as part and parcel of admitting our need to get our own economic house in order, pull back from "empire" and keep our powder dry for the real threat down the road.

For many, this is a highly tempting path.

But the problem with it is, the Chinese will continue to disappoint.  They simply will not maintain sufficient counter-party status to sustain a truly hardened competition.  There will never be an opportunity for a true American shove because the Chinese will always be careful enough to avoid the push necessary to trigger that. They simply have too many stakes in the fire to ever fully give themselves--and their future--over to America and its tendency to go overboard in "crusades." Yes, we can chase them around that block for quite some time, but it will not give us the economy nor the military power we need for the future; it will just give us familiar detours from the changes we ultimately must make.

Meanwhile, vast collective problems will remain poorly addressed, because so long as Sino-American strategic partnership remains stunted, a critical mass of great-power cooperation will remain out of reach.  And no, I'm not being unrealistic about what that partnership may entail.  China and the US have vastly different economic needs:  China has no choice but to shrink the Gap economically while the US has little choice but to continue working the Gap militarily.  There is vast strategic overlap there that provides both sides missing assets, so long as both sides can become far more realistic about what cooperation would entail and yield.

Both sides currently lack the leadership to make this happen, I fear, especially in combination with even more unrealistic and uninformed domestic constituencies standing behind them.  But the efforts to foster such links will and must continue, even if we're collectively just killing time.

There is no faster nor surer path for America and China to become second-tier powers than for rivalry to fester into conflict. That's the real lesson to take from Britain and German in the first half of the 20th century.

Our present success in fostering an American-style globalization vastly outpaces Britain's success in establishing its colonial-style globalization of the late 19th and early 20th centuries, so the strategic risks we face is sharing power are completely different, no matter how slowly China has evolved toward something more pluralistic in terms of their politics.  We have won all the major battles worth winning in getting China's buy-in on markets and globalization, securing a fifth-generation-warfare victory that--yes--may still take a good two decades to unfold.  

The greatest danger we face today is our own desire to self-sabotage that delayed win, primarily because we are led by too many people lacking the strategic imagination to see it in the distance.

But fear not, our numbers are growing--and not just in business circles.

The "great wall of America" masks boiling points on both sides

LA Times column via WPR's Media Roundup.

Whenever I feel the urge to criticize Israel's security fence, I usually put down my brick when I realize what a glass house we live in back here in the States.

The opening:

Between cynicism and hypocrisy lies the 2,000-mile U.S.-Mexico border. America is raising a wall in the desert to separate Mexican drug exporters from American drug consumers, to separate Latin American peasants who will work for low wages from the Americans who would hire them.

The Great Wall of America, straddling less than half the length of the border, descends into canyons and across the desert floor. For the Mexican, it represents a high hurdle. For the American, it is an attempt to stop the Roadrunner's progress with an Acme Border Sealing Kit.

In some places the wall is made of tennis-court-style cyclone fencing or dark mesh of the sort used for barbeque grills in public parks. In other places the wall is a palisade of 20-foot-tall bars that make a cage of both sides. The most emphatic segments are constructed of graffiti-ready slabs of steel.

Richard Rodriguez, the author, adeptly compares our fence to Israel's, but the larger point is that we should be expanding our definition of America, not contracting it.

On patriotism-for-profit talk radio and television, the illegal immigrant is, by definition, criminal. She comes to steal the American dream. But in my understanding, the dream belongs to the desperation of the poor and always has. The goddess of liberty in New York harbor still advertises for the tired and the poor, the wretched refuse. I tell you, there is an unlucky man in the Sonoran Desert today who will die for a chance to pluck dead chickens in Georgia or change diapers in a rest home in Nevada.

Great empires expand beyond their own borders. Empires in decline build walls.

Nicely stated.

I watched Robert Rodriguez's "Machete" last week.  It captures, glancingly, some of the intense, thoroughly righteous anger from the other side (albeit with rather fantastic expressions of gratifying violence), and when you examine the economic roots of that anger, it's not all that different from that of the Palestinians vis-a-vis Israel.

More natural counter-China balancing in Asia: Vietnam + US

AP story on growing mil-mil cooperation between US and Vietnam via Stewart Ross.

Cold War enemies the United States and Vietnam demonstrated their blossoming military relations Sunday as a U.S. nuclear supercarrier cruised in waters off the Southeast Asian nation's coast — sending a message that China is not the region's only big player.

The visit comes 35 years after the Vietnam War as Washington and Hanoi are cozying up in a number of areas, from negotiating a controversial deal to share civilian nuclear fuel and technology to agreeing that China needs to work with its neighbors to resolve territorial claims in the South China Sea.

But I say again, cannot the Assassin's Mace render this all asunder, with a flip of a button?

Yes, yes.  As the Pythons used to note, "No one expects the Spanish Inquisition!"

To which I now add, "Nyyyoooooobody eck-spects the Assassin's MaSSSSSSSSSSSS!"

[It's a fair blog.]

Sad commentary: the public resistance to mosque construction--in Lower Manhattan and elsewhere in America

NYT story on public resistance across America to mosque construction.

Not a new story:  public education in America took off in the 1830s in response to the rising influx of Irish Catholics and their parochial schools.  And whenever the middle class income takes a hit, resistance to foreigners swells.

But it's particularly galling to see Americans resist a group trying to organize themselves religiously in our midst, because freedom of religion brought so many of us to these shores.  Starting a church is such an American thing, and these people are declaring themselves openly and rooting themselves in our society--who doesn't want to see that sort of upfront behavior?

To me, the suspicious ones are the ones who don't want to build out in the open and declare themselves, so formal connectivity is always to be welcomed.

Sad state of affairs.  

When I first heard of the mosque proposal in Lower Manhattan, I thought it was perfect--very American.  But too many of us are reaching for the lowest common denominators, which usually are based on fear and ignorance.

No way to win a Long War, say I.

The GOP's "young guns"

Economist piece by Lexington highlighting the "young guns" Eric Cantor of VA, Paul Ryan from WI and Kevin McCarthy from CA.  All decent picks, but not a word about NJ's Chris Christie, who, to me, is the most interesting of the lot--despite being probably not experienced enough for 2012.

I read the piece less because I'm interested in the field than because I find myself running into such a strong consensus, wherever I travel, of Obama's profound weakness with the electorate.  I've read the analysis that says, all he has to do is win the same percentages with Hispanics (easy due to GOP stance on immigration) and African-Americans (hard to see how he's disappointed them) and get himself not more than a third of whites and he wins all over again.

And yet, you keep running into signals that say the GOP base is fired up and the Dems' is not.  We see Obama getting rougher--and rightly so--in his speeches, but you don't know how that's going to go over--as in, which side gets more fired up.

And so you have to consider these early profiles with all due seriousness.  I see somebody either young or a clear outsider--just like Obama presented himself, enjoying all the same we-pour-into-this-empty-vessel-all-our-hopes-and-dreams-and-fears dynamic that our man from IL did three years ago.

All pretty near idle fancy at this point, but the mind does wander. Where is the technocrat who feels--more?

Why is America doing worse than most of the Old Core?

The "race from the bottom," so sayeth The Economist, as the Old Core economies see who can recover with the least awkwardness.

Everybody we know seems to be enjoying better GDP growth and lower unemployment.  So what gives?

The main theories are unsurprising:  differences in fiscal policies, exchange rates and debt levels.

So Germany and the Brits are praised for being stingier with public money, but the mag says that doesn't explain sudden spurts in growth.  

Did the euro's dive limit our exports while helping Germany's? You bet.  Japan's rising yen a problem?  It would seem so.  But the mag says that theory with plenty of holes too.  Our exports rose with strength too, despite all our issues.

And the UK has high debt but not the same unemployment as we do, so the debt explanation doesn't seem to cut across.

And our unemployment, says The Economist, is making the rest of the world pessimistic about the future, figuring if old standby America isn't up for the strong recovery, then how can anyone else be?

After all that exploration, the mag says the real reason is that America's recovery is the most mature, meaning we restocked our shelves faster than anyone else, so I guess we're quasi-double-dipping earliest.

Oh well . . ..

Chart of the Day (4): Trimming the real fat in the U.S. economy

FT full-pager analysis.

The tale of the tape.

We're not way out of proportion (pun intended), but why should we lead on this one?

The weird factoids:  Rich men are more likely to be fat than poor men, but poor women are significantly more likely to be fat than rich women.

So the classic rich couple is the heavy-set man with the thin wife and the classic poor couple is the skinny guy with the chunky wife.

The second chart seems to explain the epidemic:  we've just changed our diet considerably since the 1960s, because when I was growing up, being overweight was really fairly uncommon.  Now, you walk around and its the skinny people who stick out--really a stunning turn in just a couple of generations (1970-2010).  

Gotta believe it can be reversed if it happened that fast.

I recently dropped 20 pounds and it feels great.  The biggest driver for me? I'm just getting bored with food, especially when I travel because so much of it is so tasteless that you just start wondering, "Why bother?"

The environmental cost of natural gas fraccing

Solid NYT piece that shows we're just beginning the Erin Brockovitch-style fights over the environmental impact of natural gas fracturing methods.  

I expect the news will get worse before it gets better, but that it'll be a good process of discovery that forces more careful extraction techniques and technologies.

So, bring on the lawyers, say I.

China's rise: it takes two to tango--and tangle

image here

FT op-ed by usually sensible Michael Pettis, who's unusually alarmist here (along with the headline of "The risk is rising of another global trade war"; did I miss the first one?).

Basic logic sound: the great imbalance is still there.  China still relies too much on exports and America's trade deficit is back up there. The kicker is rising unemployment + the election:

In the months ahead, the US will be forced to choose either protection or soaring trade deficits with rising unemployment.

Do we blame the American consumer?  No, says Pettis.  Blame it on the shift in global trade imbalances.

Five countries or regions have largely driven these imbalances in the past decade.   Three of them--China, Germany and Japan--run huge trade surpluses on which they are dependent for domestic employment growth.

Counterbalancing them have been the two trade-deficit champions--the US and trade-deficit Europe, dominated by Spain, Italy and Greece.

The financial crisis has undermined the precarious decade-long equilibrium between these blocs by forcing trade-deficit countries to reduce debt, especially household debt.  As they do, the excess demand they provide to the rest of the world must decline.  Trade-surplus countries have resisted this adjustment fiercely by trying to maintain or even increase their surpluses.

Which makes China lecturing America and Germany lecturing Greece all the more hypocritical.

Because we're such an open economy, we become absorber by default--until Congress steps in, argues Pettis. Currently we lack the industrial, currency intervention and interest-rate management policies that the trade-surplus state use at will.  So we're left with tariffs and import quotas.

Powerful argument.

Second cite, an FT op-ed by John Plender, makes similar points, with historical examples (the 1920s-1930s shift from British to US power) to scare one a bit more.

He sees two likely paths, both of which will increase US trade protectionism:  we go loose fiscally and rack up more debt, or the GOP prevents budget loosening while monetary policy stays lax. Either way, "creditor countries would ultimately see their chief market dry up."

You heard it here first: Hillary and Joe switch jobs in 2012

FT column by Clive Crook.

You remember my Esquire column of 7/31/09?  It ended thusly:

End Game: A Swap with Biden?

Say Clinton puts in her four years dutifully, achieving a reasonable fraction of her ambitions. So what's her reward? Four more years of President Obama, quite possibly. But will Hillary be happy enough with four more for herself at State? Or could a bigger compensation package be in the works?

Let me lay out for you a scenario I consider most worthy for all sides to consider: Remember Don Regan and James Baker switching jobs between Ronald Reagan's two terms, with Regan going to White House chief of staff and Baker assuming the Treasury's top spot?

Well, try this one on for size: Biden has no legit hopes for the top slot in 2016, but Clinton can't be ruled out. Why not have them switch jobs in concert with the 2012 campaign run? Biden can run out his string in the job he's always wanted (four years at No. 2 is enough time served for anybody with his ego, yes?), and Hillary can make history as the first elected female vice president. Obama is thus doubly credited for shattering one glass ceiling and generously setting Hillary up to crack the ultimate one.

You heard it here first.

Well, Crook makes the argument for Hillary as a better running mate for Obama in 2012 without going the extra step of job-swapping, which I think would make the deal work for Biden (recalling Baker-for-Regan in Reagan II).

Crook's larger argument:  if you want a more successful Obama II, this would be a great way to shift course and move more to the center.  Crook actually explores doing this prior to the full-up election (as in, why would Clinton automatically rule out running in 2012?), but I don't consider that to be anything but fantastic.

I think the swap-out could work for everybody--at virtually no risk to anybody.

Religion scorecard: the Catholics still rule!

Carl Bialik's "The Numbers Guy" column in WSJ.

He cautions that the numbers are pure swag, since the census doesn't collect such info, so the surveys employed at a bit patchy. Compared to the rest of the world (70 nations do ask on the census), America has little sense as to the faith of its citizenry, says Bialik.

Important?  He uses the example of the proposed lower Manhattan mosque.  Experts say NYC has 600k Muslims, with some saying 600-800k in Manhattan alone!  If anywhere near true, then the 1.3m estimate above is clearly wrong.

Some experts say the real Muslim number is above 2m and perhaps as high as 7m.  Of course, there's the subset of who's really active, but that can be balanced by kids if the surveys focus only on adults, like above

Since the slide above only adds up to about 228m, I guess you can surmise that about 75m kids are absented, but because you can probably split those out similarly, then you arguably boost everybody's total by a quarter, so 72m Catholics, 3.4m Jews, 1.6m Muslims and so on.

But even on that basis, it seems weird that there are 5 Catholic Supreme Court justices and 4 Jews.

Other interesting factoid:  if you add up the atheists, agnostics, refuseniks and other non-religious, and then plus in the extra quarter, you're talking upwards of 60m non-participants, or one-in-5 Americans.   That seems high, based on other stuff I've seen, but about right when youth are pinged in surveys.

Chart of the day: In relative terms, the jobless recovery

Economist chart explaining why Obama feels little love over the recovery.

Compared to previous recoveries, this one is bested only by 2001 as being weaker on job hiring.

Seems to be a pattern in the sense that the best recovery was when we were a far less mature economy, the middlng ones were decades ago, and the worst ones happened in the last decade.

The Economist's verdict:  "Not since records began has so deep a recession been followed by so shallow a recovery in employment"--as in, "slightly fewer Americans are working now, a full year into the recovery, than when the recession ended in the middle of 2009."

So the recovery is what?  Fewer workers working a lot harder.

And that does not equate into political love for anybody.

Eventually, the push comes to shove on the new mercantilism

FT column by David Pilling on why China's telecom equipment giant, Huawei, is distrusted across the Old Core West:  it is seen as a front for the People's Liberation Army--a tie it claims is dead and buried, but many in the West aren't so sure.

Two sides to the larger dynamic, both well argued here:

In the view of Mr Prestowitz, who recently wrote The Betrayal of American Posterity, a book about the country’s loss of competitiveness, the US is repeating the mistake that Britain made at the end of the 19th century. Then, he says, the UK put too much faith in the workings of the free market, throwing away its advantage to mercantilist nations such as US and Germany. Japan and other south-east Asian nations such as Taiwan, got away with similar industrial policies in the context of the cold war. Now China is at it, but on a far larger scale, he says. “I’m not saying the Chinese are wrong to be doing what they are doing. I’m just saying that the US should not be as dumb as the Brits.”

Orville Schell, a China expert at the Asia Society, has a different take. He worries that the US is in danger of being overly wary of Chinese investments. As a result, he fears, it could miss out on the huge amounts of capital now flowing out of China. He points to a recent case in which 50 US lawmakers objected to plans by China’s Anshan Steel to invest $175m in America’s (hardly booming) steel industry. “The river of capital is flowing backwards,” he says of China’s huge foreign exchange reserves and its need to invest in real assets. “I understand national security concerns, but we shouldn’t cut ourselves off from these capital flows.”

This is the dilemma now facing the US. 

You want the kid to grow up and do well, but when he grows up just enough, you begin to fear him--his ambition, and his corner-cutting ways.

But getting in front of the money, as Steve DeAngelis and I like to say . . . well, that's a hard opportunity to pass up.

Chart of the day: Who adds labor and who doesn't

From WSJ column by David Wessel--always good.

This is the most interesting demo slide I've seen in a long while. Already put it into the brief.

What I note:

1. the decline of Europe and Japan (almost off the chart--pun intended)
2. how closely China's trajectory mirrors Old Core Europe
3. America as Old Core outlier without peer
4. India's fantastically long "golden hour" of declining ratio of dependents to workers--much longer than China's was.

But it's the numbers that jump out at you. Between now and 2050 we add 35m workers, China loses 100m and India gains 300m.

Desilu = 20th century, Desi Hits! = 21st

Anjula Acharia-Bath, CEO of Desi Hits!

WSJ story on new record label focused on promoting Indian music.

Jai Ho!

Actually, my favorite recent Indian piece was that long soaring one that fronted Spike Lee’s “Inside Man.”

Legendary Jimmy Iovine supports Desi Hits!, which started in 2007 and is now coming under the larger umbrella of Universal.

The label is expected to blend Indian music with hip hop—naturally.

Fly me to the moon--privately!

Holman Jenkin’s column in WSJ taking Obama to task on his space policy.  It’s not that Jenkins disagrees with the internationalization thrust.  He just says Obama has done a terrible job of getting Congress on board.

The way he makes it sound, the White House is in full retreat, accepting a compromise bill by FLA senator Bill Nelson, “the ‘compromise’ being that the programs the president wanted to cancel will be renamed and spending accelerated.”

Missing in Nelson’s bill is all the money Obama wanted to redirect to private entrepreneurs to take over the task of keeping low Earth orbit projects supplied with astronauts and material. 

The usual answer from pork barrel-rollers in Congress persists:  only NASA is qualified to operate in space, an opinion that dooms us to suboptimal outcomes that eventually, entrepreneurs from elsewhere—apparently, will surpass.

Jenkins notes that while the private sector is clearly incentivized to strive for the safest possible operation that is economically feasible, NASA is just as clearly incentivized to “spend as much as possible to do as little as possible.”

Jenkins says the private space industry in the US has survived on mega-rich angel investors, pinning their hope that Obama would pull a space-age equivalent of the Air Mail Act of 1925, which had the effect of lofting the early airline industry.

Instead, Nelson bests Obama strictly out of greed for jobs in his state.

Sad state of affairs.

We can only hope that Richard Branson and Burt Rutan’s Virgin Galactic dramatically outshines NASA in the eyes of taxpayers, who thereupon should demand better use of their tax dollars.

Excellent piece by Jenkins.