San Francisco to London in 30 minutes!

Imagine a transportation method that will allow for you to travel from San Francisco to London in 30 minutes.   We used to have a supersonic plane called the Concorde that would allow for a person to fly from New York to Paris in 3.5 hours instead of the 7 it takes on a normal plane.  The trip from San Francisco to London is even further, but this new mode of transportation would allow for you to make it in less than 30 minutes.

How would that change the world?  You are working on a complex business arrangement and you need to meet with people on the multiple continents as quickly as possible.  Soon you will be able to.  Meet in Washington in the morning, go to Beijing for lunch and then finish it off in San Francisco for dinner.

Today in Australia, Elon Musk proposed just such a system that his company SpaceX will start to build within the next year.   While the benefits of quicker travel between points on earth is compelling, that primary motivation is even more visionary.

The goal of the BFR (Big Falcon Rocket) is to lower the cost of space travel while at the same time increasing the capacity.  The BFR is more capable than any rocket that has ever been produced or is planned to be produced.

The BFR is more powerful than the Saturn V which was the rocket that took Buzz Aldrin to the moon.

Taking this same set of rockets and sorting them by increasing launch costs puts the BFR on the other side of the list:

While the BFR will be more costly to build than any of those other rockets, those costs can be spread out over multiple flights since it is 100% reusable.  Some argue that reusability costs performance, and it is true.  But you could improve the performance of airplanes by not having landing gear or flaps.  And use those weight savings to give a slightly more cargo capacity.  Instead of landing the plane you could use parachutes to land the cargo and let the plane crash in the sea.  Sounds crazy.  No one would consider doing that.  But that is exactly the same thought process that has driven rocket design since its beginning.  And we have just lived with it.  Never questioning the absurdity of it.

We have seen space art like this in the past.  It has always been like a mirage.  Always just over the next horizon:


But this does not feel like a mirage.  The resources that have developed, built and operated the Falcon 9, the Dragon Capsule, and the Falcon Heavy will be deployed full-time on the BFR project within the next year.  And Elon is planning to use the BFR as the sole rocket to service his customers going forward.

Take a look at his presentation and get a glimpse of the future:

What’s the economy for anyway?


An excerpt of a book “What’s the economy for, Anyway"” was published in The Bloomberg’s Businessweek and sent to me by a friend:

It is a very good article that asks a lot of fundamental questions.  Below is a listing of books and other material that is referenced from this article.  Also included are works by Josef Pieper, a philosopher that explores the value of leisure.




A free $2 Trillion

“The Fed has kept short-term interest rates near zero since December 2008 and has bought more than $2 trillion in long-term securities to push borrowing costs down further and boost recovery from the 2007-2009 recession.”  (Fed unlikely to extend QE2, officials say by Ann Saphir (Reuters – 03/25/11)

The Federal Reserve was able to buy $2 trillion in long-term securities.  This is amazing consider that GDP is right around $14 trillion (Google) and the 2010 US Federal Government is $2 trillion (  Where does the Federal Reserve get that $2 trillion from?  (From what I’ve read, it seems it just gets it out of thin air.) The ability to pump this amount of money into the economy is just extraordinary. 

Winning the Lottery can make you less of what you already are

With just a bit of luck $1 could have become $312 Million in last Friday’s Mega Millions lottery.  Think of it, just pick 6 numbers correctly and all of your financial needs could be met, or could they?

It is my belief that giving people in financial distress a large sum of money actually makes the problem worse.  The distress financial situation is often caused by not matching expectations and expenditures with means and ability to earn.  Many of these situations start out slowly of earning just a little less than one spends, and then as the amount of difference (debt) accumulates, more desperate action is required that exasperates the condition.

A recent news article points to a related trend Why Lottery Winners Go Bankrupt by Jack Hough (Smart Money 3/28/11)

My belief is that if you want to have a happy life, learn how to live within your means.  And constantly push yourself to increase your means.

When you are at the top of the world, don’t pull back.

It is funny when you are poor, when you are the underdog.  You have nothing to loose!  The risks are zero, and the opportunities real or imagined far out way the costs of zero risk.

But then you get a job, doesn’t pay much, but enough.  You get out of debt, buy a house, get a car, start a family. 

But a funny thing happens when you are no longer poor… You know have something to loose.  Now the risks that you take have real costs and the opportunities seem more imagined than real. 

This same thing happens with nations.  Now, the US has all the industries, 200 years ago we were nothing but farm boys.  But now, we have things to protect.  Those people that got that job, started that family, bought that house, by the tens of millions are afraid of loosing it all with the next downsize, next downward turn in the business cycle.

But economic success is like sand in the hand.  The hard you squeeze to keep it the more it will spill through your fingers.  The best way to hold sand is with your hand open.  Sure it exposed to the wind and a slight tilt of the hand will make it all spill out.  But if you focus, you can hold more than you ever could with your hand closed.

Likewise, the surest way to loose our success as an economic power is to try to protect that economic power through artificial constraints.  Instead, we should upon the flood gates of economic competition at all levels.

We should unilaterally end all trade restrictions.  Let the world compete against each other in our markets.  Sure they will compete against our industries, and many, many of our companies will go out of businesses.  But the ones that survive will be able to compete against any company in the world.  Also, remember that outputs of one industry is an input into another.

One of my favorite economic stories is about how India restricted trade on computer imports in order to protect their computer manufacturing industry.  Then the real money in the late 90s and 2000s was in computer services.  How much of lead would India have if computers were a lot cheaper and more widely available?  But how could they have know?  Likewise, how can we know what will be the next big thing?

We must open the flood gates to imports.

We must end subsidies.  Same reason as above.  No industry is worth protecting at the cost of inefficiencies.  We need to open the gates of competition and those industries that stand, stand.  Those that fall, free up resources to be used in a more useful way.

We must open up the people markets as well.  If you want to come to the United States to study, can pay for it, and do not have a criminal background, then you should be welcomed here.  We want the best minds here!

If you come to school here and then get offered a job, then you should get an automatic visa to work here.

If you are in another country, willing to come here and work, don’t have a criminal history, and someone offers you a job, then you should be granted a visa.

People might be like, are you crazy?  Where will the Americans work?  The point is that capital, production, the jobs will all go where it is cheapest.  If we artificial limit competition for labor (intellectual and otherwise), then we limit the efficiencies of our economy.  We want America to be the best place to work.

This would be good for the world.  This would be good for America.

You have a product to sell?  Sell it here in America!  If you have a service, sell it here in America.  If you want to go to school, then go to school here in America.  If you want to work, then work here in America!

English-only: going the wrong way!

“Friendswood’s proposed English-only plan divides city”

The US students, employees, companies, and other organizations have to work together internationally.  In order to do so, it is helpful to know several languages, to be exposed to several cultures, and to view your own thinking in the context of it not being the only thinking.  English-only drives like this are a way to try to isolate ourselves and eventually limit ourselves.

Instead of passing “English-only” laws, we should be promoting multiple languages. 

How to find leaks on your board

Recently, the news has been filled with reports about a particular Fortune 100 company, and how it addressed leaks from the board of directors.  These reports have triggered Congressional hearings and much public debate and comment.  The focus so far has been on where the investigation went wrong.  However, I think an equally critical issue to address is how to address leaks from a company’s board.  Board leaks about pre-announced events such as acquisitions, mergers, spin-offs, and hiring/firing of executives could allow for some to benefit financially from this privileged information.  If the chairman of the board suspected leaks and did nothing to plug them, would the chairman be complicit in insider trading?
Here are some ideas on how to deal with leaks.
1) Lecture the board – Ask each person 1 on 1 if he or she is leaking the information.  Remind each one individually of his/her responsibility to the company regarding this privileged information.  This approach was tried in the latest scandal.  It neither revealed the leaker nor stopped the leaking.
2) Lecture the media – Ask the reporter/media outlet to reveal the leaker.  Remind them of the harm it does to the company/markets to have insider information leaked.  Can the media be held accountable for revealing privileged information?  I do not think so.  Although this approach was not tired, it would probably not work.  It would also alert the media to the fact there are leaks on the board which is something the company wants to keep secret.
3) Crime Stoppers approach – Offer a monetary reward leading to information regarding leaking from board members.  This could entice people associated with the leaker, the reporter, or the media outlet to reveal the leaker.  It has the downside of alerting people to the fact that there is leaking on the board.  However, if it was a standing policy this could be avoided.  Perhaps it should be administered by an outside group?
4) Sequester the board – Anytime that the board is aware of pre-announced information, keep them isolated and away from any contacts.  Take them to a remote area and keep them off the communications network.   This has many obvious drawbacks.  The board will probably always have something that should not be shared, so they may have to stay out of touch indefinitely.  Also, you want your board members to have as much information as possible to make the best possible decisions, so this could be undesirable.  It would be very difficult to enforce, people that want to connect find ways.
5) Board members agree to be investigated – What if we required access to phone records, permission to be spied on, access to emails, etc. as part of being a board member?  As a board member, there would be the expectation that the company would be following you and observing you.  The downside with this approach is that people would not sign up to be board members.  Also, it probably would not work.  Most spying works because the target is unaware of it.  If people felt they were being watched, they would find ways to communicate undetected.  Plus, if board members submit to this, how long will it be before they expect all the employees to submit to it as well?  This would definitely put us on the road to a Fahrenheit 451 type world.
6) Routinely give people on the boards “tracers” – Tracers in this case would be “sensitive” information that would only be given to one board member at a time.  If the information got out, then you found your leak.  This would not work as well, because if it was routine, then the board would know about it.  They would also suspect this information as being a tracer.  They only have to ask others if they had heard about it.  Plus, you need trust between your board members.
Can you think of any other ways?  If so, please leave them in the comments section. 

China will help Africa to build big dam

Africa has long been ignored as a place to invest and for development by the western nations.  China is not missing the opprotunity.  Perhaps now we will start to see a pickup in the development of Africa?
China will help Africa to build big dam

Ten Recurring Economic Fallacies, 1774–2004 – Mises Institute

Ten Recurring Economic Fallacies, 1774–2004 – Mises Institute

Milton Friedman’s “Free to Choose”

I have read the book, which I recommend.

Free to Choose: A Personal Statement

I have not seen the movies yet, but found a link to them today.

“Free To Choose” TV Series by Milton Friedman