Paul Krugman rants in tomorrow’s Times about how the Democrats should speak up if they win the House. Last week, he said this means spending 10% of the House’s floor time investigating the administration. This time he added Nancy Pelosi’s agenda item:

according to opinion polls, most Americans are actually to the left of Congressional Democrats on issues such as health care.

In particular, the public wants politicians to stand up to corporate interests. This is clear from the latest Newsweek poll, which shows overwhelming public support for the agenda Nancy Pelosi has laid out for her first 100 hours if she becomes House speaker. The strongest support is for her plan to have Medicare negotiate with drug companies for lower prices, which is supported by 74 percent of Americans — and by 70 percent of Republicans!

The first problem with this proposal is that Medicare has been captured by the drug companies and if they are empowered to do price controls, they will push prices up rather than down. Legislating lower prices is like trying to legislate the value of pi to be 3. It doesn’t work.

(more…)

The New York Times editorial page calls for non-militarization of space and is worried that we are starting a new space race.

The nuclear arms race and other races in the cold war may have been exceedingly dangerous and unwise to subject our country and the planet to such extreme weapons (that are still around albeit less in the public eye). But a race is a battle that the US is uniquely suited to decisively win with our huge economy, our innovative culture and our status as a sitting duck for asymmetric warfare such as terrorism.

Consider an analogous situation. The alternatives for Israel to stop rocket attacks from over their borders is to either clear an unduly broad patch of no-man’s land of all people permanently (which in itself requires advances in detection and the permanent enmity of the international community) or develop a laser weapon that can shoot down these rockets. The arms race offers the only glimmer of hope for peace.

(more…)

Paul Krugman is stirring people up with demagoguery today. He says that executives are making “367 times the average worker’s pay” and says that “The moral of the story is…we’re still waiting for serious corporate reform.” He ends with gloom and doom: “And don’t tell me that everything must be O.K. because stocks have been rising lately. Remember, they rose even faster in the 1990’s — and the 1920’s.” implying that we have a new stock bubble with the 1920’s comment–one that will inevitably crash like things did in 1929. This stirs people up about people getting paid too much which is something that causes Democrats to get madder than Republicans.

Let’s untangle today’s multiple untruth and propose some real reform.

(more…)

Rutan in Popular Mechanics ups the supply from 5,000/year to a 100,000 seat number for 12-year capacity. That’s 278 flights per year for each of his first five six-passenger craft and 3-4 flights per day. Perhaps they’ll be flying two per day out of both Mojave and New Mexico. That is not consistent with $200,000 ticket prices according to the Futron demand estimate from the 2002 survey data. The good news is that if they proceed with building that kind of capacity, it will be in their interest to fly it at marginal cost if they face sufficient competition whether or not they have broken even on their debt payments. The 12-year demand in the Futron Study updated white paper is 40,000. That’s a pretty big supply/demand mismatch which would cause the price to drop out if there are at least two vendors beyond Virgin Galactic with sufficient spare capacity. With (in alphabetical order) Armadillo Aerospace, Blue Origin, Masten Space Systems, Rocketplane-Kistler, and XCOR Aerospace producing vehicles and/or donating flights to Space Frontier Foundation Teachers in Space and/or getting their craft and/or spaceport licensed there rates to be more supply. Will this drive the price down more swiftly than Futron predicts?

It’s certainly in the interest of each firm to talk about huge fleets to try to get the competition not to build. Decisive win for investors or consumers?