There are two U.S. industries who's products have increased in cost at a rate far outpacing standard inflation: Healthcare and Higher Education.
Both of these are information based industries. The cost of reproducing and transmitting information has dropped dramatically over the last few decades. Both of these industries should be seeing dramatic efficiency improvements from the Information Age, but they have not.
At the same time, the demand for both industries has increased dramatically. The Bachelor's degree is now considered the entry point for a reasonable job. An aging population has increased the demand for healthcare, as has the technological advancements of healthcare--better detection and improved treatments means more opportunities for treatment.
The final problem is the "Third-Party Payer" issue which pervades both of these industries. Insurance is the payer for healthcare, and student loans are the payer for higher education.
The inability of people to cope with such increasing costs had led many to look at just giving up, and demanding the government pay for it. Medicare for All/Single-Payer is offered as the solution to high healthcare prices. Free college and student loan forgiveness is offered as the solution to high higher education prices.
The problem is, neither of these are solutions to the high cost of the product. If we are going to depend on government to solve the the high cost problem, we need a solution that focuses on cost.
We need to identify the source of high costs in these industries.
We need to identify where entrenched organizations are preventing competition which could lower costs.
We need to actively invest in research which holds the potential for an order of magnitude decrease in specific health care areas (i.e., AI). Disruption of the status-quo must be the goal.
We need to actively subsidize higher education inversely to the cost of the product: more grants for students taking low-cost distance learning living at home, fewer grants for students taking high-cost courses at expensive campuses. Disruption of the status-quo must be the goal.
We need a Secretary of Health and Human Services who is a tyrant to all of the embedded interests in the health care industry.
We need a Secretary of Education who is a tyrant to all do the embedded interests in the higher education industry.
Sunday, February 24, 2019
Monday, February 11, 2019
An Atomic New Deal
There is plenty of debate between those who believe Solar and Wind alone can replace not only all carbon dioxide emitting electrical power generating sources (Coal, Natural Gas, Biomass, etc.), but also existing nuclear power capacity.
The "Green New Deal" proposes to upgrade or replace every building and home to improve its energy efficiency. Part of this includes replacing fossil fuel based heating and cooking appliances with electric models, but obviously a big part also is improving insulation, etc.
Likewise, many who have proposed "Green" programs promote densification as part of the solution. Move people to the urban center. End suburbs and exurbs. After all, a 2,000 square foot high rise apartment can be insulated, heated, and cooled at a much lower energy cost than a stand-alone 2,000 square foot detached single-family house. And if people are moved into the urban center, they have easy access to energy efficient mass transit.
There is a common assumption across these proposals: Scarcity. They assume zero CO2 energy is scarce, and attempt to manage scarcity by managing demand.
However, what if we took a different approach? What if instead of assuming scarcity and managing demand, we assumed abundance and manged supply?
We know what happens when energy is abundant, as we saw that during the post-WWII era. There was an initial recession caused by the WWII demobilization, but then the post-war boom really took off. This basically continued until the 1970s Energy Crisis which started in 1973. The quarter-century period from 1948 to 1973 was when the family automobile, the suburban single family home, and air travel replacing train travel occurred. Abundant energy also powered the agricultural Green Revolution, which is a by-product of industrial scale agriculture. Something that took a quarter of a century to create, and then has lasted despite energy crises and multiple recessions will be very hard to unwind. The desire to move everyone towards plant-based diets to reduce the impact of animal agriculture on the environment is likely impossible without industrial scale plant agriculture.
The decade which followed the 1973 Energy Crisis saw fundamental changes to reduce demand. Smaller cars became the norm. The 55 mph speed limit was introduced. Home insulation became a serious consideration. People turned down thermostats in the winter, and turned them up in the summer. People wore heavier clothes indoors in the winter, and fans became popular again, even in air conditioned buildings.
There are experts in transportation who looking at the looming convergence of electric powered passenger vehicles and self-driving autonomous passenger vehicles and see a revolution in local transportation. "An 80% reduction in required vehicles and a corresponding 80% reduction in traffic." Think about that. If rush hour traffic drops by 80%, if owning a private vehicle is no longer the cost of entry for living in the suburbs, the real and opportunity costs of living in the suburbs drops dramatically. So the need for densification dies with it.
Improvements to home efficiency and transition to all-electric appliances have potential. But some improvements are easier than others. A drop-in range, a direct water heater replacement, these are simple. Replacing a furnace with a heat pump in moderate climates is straightforward. But in colder climates, there will be a heavy dependence on auxiliary heating. Electric heating requires significant power. So mass electrification will require abundant, inexpensive, electric power. More and cheaper electricity makes all of this easier. Scarce electricity makes all of this harder. Adding attic insulation and updating weather stripping is easy. Installing new windows is harder. Improving wall insulation or vaulted ceiling insulation in existing homes is almost impossible. During housing growth bubbles, many cheaply designed and constructed houses were built. There is a limit to improving insulation of an existing home.
Bill Gates' push for Traveling Wave Reactors (TWRs) with his startup TerraPower is worth considering. TWRs would burn available Uranium-238 and existing nuclear waste. Other advanced reactor concepts, such as Molten Salt Reactor (MSRs) and other Generation IV Reactor designs are also worth considering. The point is, we could produce enough electricity to cover the demand of a fully electrified society (all-electric homes, even in cold climates, electric cars, electric trucks, etc.) with the demand of things like electric heating and the hard to overcome lack of energy efficiency of older homes.
To me, this is a no-brainer. If the goal is to rid the grid of CO2 producing power plants, and to grow the grid to support a massive increase in electrification, it will take much more than Solar and Wind. Solar and Wind have a place. Solar can be decentralized, and works great as a summer augmenting generation source. Wind makes the most sense in an off-shore implementation. But it is not enough.
You have to ask the question: Is the Green New Deal designed to solve our future energy requirements, or is it to herd us into dense cities where Carter-Era savings programs manage demand down to meet a lower output?
An abundant energy program combined with autonomous, electric vehicles and improved telecommunications technology as the potential to lead to a second suburban revolution, with kids playing in backyard tree houses, neighborhood playgrounds, and cul de sacs, with abundant energy allowing easy, high definition teleconferencing from home offices. It even could allow knowledge workers to live and work in rural areas, with all of the benefits of space and nature.
Autonomous electric tractors could tend industrial scale farms, and autonomous electric semi-trucks could deliver produce (including plant-based artificial "meat" indistinguishable from beef) from the industrial farms to supermarkets.
Improved telecommunications and zero emissions transportation could make "place" much less relevant in the future.
Are these bad things? Are these things to be avoided?
No. they are not.
Bring on the Atomic New Deal.
The "Green New Deal" proposes to upgrade or replace every building and home to improve its energy efficiency. Part of this includes replacing fossil fuel based heating and cooking appliances with electric models, but obviously a big part also is improving insulation, etc.
Likewise, many who have proposed "Green" programs promote densification as part of the solution. Move people to the urban center. End suburbs and exurbs. After all, a 2,000 square foot high rise apartment can be insulated, heated, and cooled at a much lower energy cost than a stand-alone 2,000 square foot detached single-family house. And if people are moved into the urban center, they have easy access to energy efficient mass transit.
There is a common assumption across these proposals: Scarcity. They assume zero CO2 energy is scarce, and attempt to manage scarcity by managing demand.
However, what if we took a different approach? What if instead of assuming scarcity and managing demand, we assumed abundance and manged supply?
We know what happens when energy is abundant, as we saw that during the post-WWII era. There was an initial recession caused by the WWII demobilization, but then the post-war boom really took off. This basically continued until the 1970s Energy Crisis which started in 1973. The quarter-century period from 1948 to 1973 was when the family automobile, the suburban single family home, and air travel replacing train travel occurred. Abundant energy also powered the agricultural Green Revolution, which is a by-product of industrial scale agriculture. Something that took a quarter of a century to create, and then has lasted despite energy crises and multiple recessions will be very hard to unwind. The desire to move everyone towards plant-based diets to reduce the impact of animal agriculture on the environment is likely impossible without industrial scale plant agriculture.
The decade which followed the 1973 Energy Crisis saw fundamental changes to reduce demand. Smaller cars became the norm. The 55 mph speed limit was introduced. Home insulation became a serious consideration. People turned down thermostats in the winter, and turned them up in the summer. People wore heavier clothes indoors in the winter, and fans became popular again, even in air conditioned buildings.
There are experts in transportation who looking at the looming convergence of electric powered passenger vehicles and self-driving autonomous passenger vehicles and see a revolution in local transportation. "An 80% reduction in required vehicles and a corresponding 80% reduction in traffic." Think about that. If rush hour traffic drops by 80%, if owning a private vehicle is no longer the cost of entry for living in the suburbs, the real and opportunity costs of living in the suburbs drops dramatically. So the need for densification dies with it.
Improvements to home efficiency and transition to all-electric appliances have potential. But some improvements are easier than others. A drop-in range, a direct water heater replacement, these are simple. Replacing a furnace with a heat pump in moderate climates is straightforward. But in colder climates, there will be a heavy dependence on auxiliary heating. Electric heating requires significant power. So mass electrification will require abundant, inexpensive, electric power. More and cheaper electricity makes all of this easier. Scarce electricity makes all of this harder. Adding attic insulation and updating weather stripping is easy. Installing new windows is harder. Improving wall insulation or vaulted ceiling insulation in existing homes is almost impossible. During housing growth bubbles, many cheaply designed and constructed houses were built. There is a limit to improving insulation of an existing home.
Bill Gates' push for Traveling Wave Reactors (TWRs) with his startup TerraPower is worth considering. TWRs would burn available Uranium-238 and existing nuclear waste. Other advanced reactor concepts, such as Molten Salt Reactor (MSRs) and other Generation IV Reactor designs are also worth considering. The point is, we could produce enough electricity to cover the demand of a fully electrified society (all-electric homes, even in cold climates, electric cars, electric trucks, etc.) with the demand of things like electric heating and the hard to overcome lack of energy efficiency of older homes.
To me, this is a no-brainer. If the goal is to rid the grid of CO2 producing power plants, and to grow the grid to support a massive increase in electrification, it will take much more than Solar and Wind. Solar and Wind have a place. Solar can be decentralized, and works great as a summer augmenting generation source. Wind makes the most sense in an off-shore implementation. But it is not enough.
You have to ask the question: Is the Green New Deal designed to solve our future energy requirements, or is it to herd us into dense cities where Carter-Era savings programs manage demand down to meet a lower output?
An abundant energy program combined with autonomous, electric vehicles and improved telecommunications technology as the potential to lead to a second suburban revolution, with kids playing in backyard tree houses, neighborhood playgrounds, and cul de sacs, with abundant energy allowing easy, high definition teleconferencing from home offices. It even could allow knowledge workers to live and work in rural areas, with all of the benefits of space and nature.
Autonomous electric tractors could tend industrial scale farms, and autonomous electric semi-trucks could deliver produce (including plant-based artificial "meat" indistinguishable from beef) from the industrial farms to supermarkets.
Improved telecommunications and zero emissions transportation could make "place" much less relevant in the future.
Are these bad things? Are these things to be avoided?
No. they are not.
Bring on the Atomic New Deal.
Sunday, February 10, 2019
The Connundrum Continued
A thought came to mind on my previous post, and it is this: Does a stake need to be put in the ground?
Was Ross Perot's 1992 run a "stake in the ground" against NAFTA and globalism which only bore it fruit in 2016 after more people came to his views?
Would a third-party or independent candidate with traditional, centrist, mainstream views of economic classical liberalism, realism in foreign policy, and a balanced view on immigration put a "stake in the ground" against a Democratic nominee embracing Democratic Socialist economic policies, non-interventionist foreign policies, and amnesty for illegal immigrants, and a GOP incumbent embracing protectionist economic policies, non-interventionist foreign policies, and restrictionist immigration policies?
Such a candidate may be destined to lose in 2020, and may swing the election in a way that is undesirable for the populist Democratic Socialist left or the populist paleoconservative right, but would stand as a stark contrast to both the populist Democratic Socialist left and populist paleoconservative right. That candidate would likely be burned by the objection of one side's extremists, but the positions they espouse could be a starting point for more mainstream 2024 or 2028 candidates from either or both parties.
The risk is, if there is no centrist "stake in the ground", there may be no rallying point for those future mainstream candidates. How could a mainstream Republican run against populist paleoconservatism without being able to point to the votes lost by the paleoconservative populists to the mainstream centrist independent candidate? How could a mainstream Democrat run against populist Democratic Socialisism without being able to point to the votes lost by the Democratic Socialist populists to the mainstream centrist independent candidate?
The zero-sum politics of both sides is a problem, because while it seeks to preserve the next election, it may poison more elections further in the future.
This "stake in the ground" concept is why I supported the Libertarian Party ticket in 2016. I thought Trump would lose and the GOP would be left picking up the pieces. But I also thought the LP ticket would get more than the 3.3% it received. If a major candidate loses, and there is a minor candidate who draws from only one side and gets about 8% of the vote, they represent about 15% of that side, which is fairly significant. The candidate may be seen as a spoiler, but chances are their key supporters and staffers will emerge as power brokers, and a similar candidate will emerge under the official party banner.
The last issue is who would emerge as the "similar candidate" on each side in the future if a centrist mainstream independent spoils the 2020 election? There are a number of potential candidates on the GOP side, but it is less clear on the Democrat side.
Was Ross Perot's 1992 run a "stake in the ground" against NAFTA and globalism which only bore it fruit in 2016 after more people came to his views?
Would a third-party or independent candidate with traditional, centrist, mainstream views of economic classical liberalism, realism in foreign policy, and a balanced view on immigration put a "stake in the ground" against a Democratic nominee embracing Democratic Socialist economic policies, non-interventionist foreign policies, and amnesty for illegal immigrants, and a GOP incumbent embracing protectionist economic policies, non-interventionist foreign policies, and restrictionist immigration policies?
Such a candidate may be destined to lose in 2020, and may swing the election in a way that is undesirable for the populist Democratic Socialist left or the populist paleoconservative right, but would stand as a stark contrast to both the populist Democratic Socialist left and populist paleoconservative right. That candidate would likely be burned by the objection of one side's extremists, but the positions they espouse could be a starting point for more mainstream 2024 or 2028 candidates from either or both parties.
The risk is, if there is no centrist "stake in the ground", there may be no rallying point for those future mainstream candidates. How could a mainstream Republican run against populist paleoconservatism without being able to point to the votes lost by the paleoconservative populists to the mainstream centrist independent candidate? How could a mainstream Democrat run against populist Democratic Socialisism without being able to point to the votes lost by the Democratic Socialist populists to the mainstream centrist independent candidate?
The zero-sum politics of both sides is a problem, because while it seeks to preserve the next election, it may poison more elections further in the future.
This "stake in the ground" concept is why I supported the Libertarian Party ticket in 2016. I thought Trump would lose and the GOP would be left picking up the pieces. But I also thought the LP ticket would get more than the 3.3% it received. If a major candidate loses, and there is a minor candidate who draws from only one side and gets about 8% of the vote, they represent about 15% of that side, which is fairly significant. The candidate may be seen as a spoiler, but chances are their key supporters and staffers will emerge as power brokers, and a similar candidate will emerge under the official party banner.
The last issue is who would emerge as the "similar candidate" on each side in the future if a centrist mainstream independent spoils the 2020 election? There are a number of potential candidates on the GOP side, but it is less clear on the Democrat side.
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