[FoRK] Cutting through the stimulus BS

Stephen Williams sdw at lig.net
Sun Oct 25 13:18:28 PDT 2009


Jeff Bone wrote:
>
> (Via Kling.)
>
>   
> http://www.stanford.edu/~johntayl/Evidence%20on%20the%20Sources%20of%20Improved%20Economic%20Growth%20from%20the%20First%20to%20Second%20Quarter.pdf 
>
>
> So -- the "improvement" we've seen in GDP growth (mind you, not 
> adjusted for inflationary / dilutionary currency effects, offsetting 
> deflationary cost reductions, etc.) is *primarily* due to increased 
> private investment (in equipment, as it turns out;  refresh those 
> tools, boys!)
>
> The contribution of any "stimulus" so far is de minimus relative to 
> that.  Hardly surprising.  Well, except perhaps to a naif or a 
> neo-Keynesian.

It's all about psychological effects isn't it?  These are often 
indirect.  The optimism of doing something via the stimulus somewhat 
offset the cries of doom, gloom, and disaster long enough for people to 
take a breather and get back to living and working more or less 
normally.  (Except the unemployed, who probably have already passed 
through the angst of financial disaster and have found a fall-back 
position.)

The thing that I don't like about the stimulus choices is that they gave 
away too much money with too little direct positive benefit.  The 
indirect benefits are probably much larger, so it is possible they were 
good choices since anything more thoughtful up front might have been too 
slow and too fraught with specific idea backlash to get the immediate 
effect needed.

For instance, I would have favored spending a whole lot to bootstrap a 
new auto industry, more or less as a clean break from the existing one.  
Set up design / R&D competitions / markets in the major knowledge-worker 
areas (Bay Area, DC, Boston, Research Triangle, maybe Austin, etc.), 
plus open to virtual teams / companies, and then target a few very 
inexpensive areas for POC manufacturing, perhaps in Wichita (Cessna, 
etc.) or similar.  Near major entertainment areas perhaps, Vegas, 
Colorado, some nice areas in Canada.  Make a market where all 
manufacturing can attempt to compete.  Start serious efforts to create 
inexpensive "company town" like environments, except not actually owned 
by the companies involved.  Perhaps something between a homeowners 
association and a credit-union like structure.

A key set of ideas would be to make this a push for highly capable 
robotic factories, cheap, modular vehicles, electric or other 
low-maintenance hyper efficient propulsion, and AI automated 
self-driving (a la Darpa Challenge) vehicles.  Resolve to solve the 
technical, economic, and legal issues.  After success, plan to solve the 
efficient auto / train integration and automated aircars.

We have plenty of technology to get started on all of that, probably 
having success in 5 years.  We just have to collectively decide to do it.

sdw
>
> jb



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