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Bill received a BS in 1972 from West Point with concentrations in math, physics, chemistry, and engineering. He was an NCAA All American Wrestler and captain of the wrestling team. He is an eight-year infantry veteran, Airborne, Ranger, Arctic Light and Mechanized Infantry in the United States... More
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  • Performance Standards and Jobs 0 comments
    Sep 18, 2010 2:26 AM

    Millions of jobs, vast innovation, lower costs with better service resulted when communications shifted from central planning to a free market governed by performance standards in 1984. A century of analog networks and rotary telephones were radically re-tooled, creating great wealth and jobs.

    Repeat success:

    Again, millions of jobs, vast innovation, lower costs with better service will result when transportation and power infrastructures are returned to free markets.

    Oddly, this economic boom can be ignited by individual cities, capturing several industries, jobs, wealth and self-reliance:

    • Self-reliance is local. Self-reliance, changing the lifeblood of our economy from oil to ingenuity requires workers, lots of workers.
    • In 1984 communication shifted from central planning to ingenuity governed by performance standards. Repeat success by governing power and transport by performance standards, such as, passenger-miles per unit of energy.
    • Example Resolution: Grant rights of way access to anyone willing to risk private capital to built transportation networks that exceed 126 mpg.
    • Renewable energy is local, self-reliant. There is not an energy problem. Enough solar energy hits the Earth every hour of every day to power all human economies for a year. The United States, for all but the last 70 years, lived, mostly, within a solar energy budget. If innovations applied to communications are applied to power/transport a city can be self-reliant, an economic lifeboat, durable against oil's unstable supply and prices, saving cash spent to consume oil. Unleash the innovators.
    • Stop spending on 2020 Plans based on assumptions that are no longer valid, $30 a barrel oil ($1.45 gas), growing oil supply, stable oil supply, increasing home values, 95% employment, stable banking system, unlimited borrowing, etc....  Stop investments that drive further down oil's economic and ecological cul de sac.

    Example of Transport and Power Innovators:
    Morgantown, WV opened the world's only functioning Personal Rapid Transit (PRT or PodCars) network in 1975. Morgantown gained rights of way as a solution to make US cities independent of imported oil after the 1973 Oil Embargo. Congressional Office of Technology Assessment (COTA) study PB-244854 (published 1975) outlines PRT as a solution and warns of "institutional barriers" to innovation. These "institutional barriers" also caused the loss of thousands of miles of railroads as central planners subsidized oil/highways as the answer to all transport needs.

    Innovators have struggled since 1975 to gain rights of way access to make the next iteration. Heathrow Airport allowed access and will soon open a PRT network by ULTra. US companies such as Taxi2000, SkyTran, ET3, JPods still struggle. Blocked from innovating in the US, JPods signed an agreement to build in China. [Disclaimer, the author is founder of JPods, Inc.]

    Below are images associated with JPods networks. Instead of moving a ton to move a person, JPods strive to move just the person non-stop from origin to destination. By eliminating parasitic vehicle mass and repetitive applications of power in start-stops, energy requirements drop 85%. Efficiencies are great enough, that solar collector mounted over the rails gather 5,000 to 30,000 vehicle-miles of power per mile of rail per day. A 10x scale cost savings in the niche of highly repetitive urban transport pays for the jobs, materials, capital and profits to deploy networks. [US Patent 6,817,810]

    Just like Morgantown, PRT solutions are local. Self-reliance is local. Congestion, pollution, accidents are local problems. Stop looking to Washington. Govern by declaring the city's needs, invite innovators to convert current waste into profits and jobs.

    PodCars are just one of many niche solutions. In retirement communities golf carts are replacing cars. In China there are hundreds of millions of electric scooters, allowing coal to be used as a transportation fuel without excessive personal debt and the very large carbon footprint of electric cars.

    Germany's Feed-in-Tariffs (FIT's) de-monopolized power infrastructure, resulting in 250,000 new jobs, world leadership in wind and solar energy technologies and 12% of electricity from renewable sources. Herman Scheer, architect of Germany's legislation, notes that Kyoto and Copenhagen "stand in the way of the progress". The solution is to implement profitable local solutions.

    Several US cities and states have recently adopted FIT's. Innovators are already collecting and ramping up efforts, jobs will start compounding. New Jersey policies have already captured a significant number of solar innovators, their companies and their jobs.

    Cause of Infrastructure Problems:

    Mobilizing to fight World War I, communications, transportation and power infrastructures were socialized or monopolized. Incrementally, central planning leveraged fossil fuels and the great innovations of Ford, Edison, Bell and the Wright Brothers. The unintended consequences:

    • Forced abandonment of thousands of miles of railroads.
    • Displaced American self-reliance with oil's growing Potato Famine potential. While eight Presidents declared imported oil a threat to national security, central planning taxed and built infrastructure mandating that imported oil increase from 20% during the 1973 Oil Embargo to 65% today.
    • Expanded congestion costs to $87 billion per year.
    • Expanded accident costs to $162 billion per year. Parents would not allow children to ride on roller coasters or sleep in cribs with the safety record of the government's highway network. No customer would buy an airplane ticket from an airline with the safety record of highway networks. While Morgantown's PRT network delivered 110 million injury-free passenger miles, government highway networks killed over 430 times the number of people killed in the terrorist attacks of 9/11.
    • Bureaucracies failed to warn the nation to prepare for rising oil prices and stagnating supplies. Energy Information Administration (NYSEMKT:EIA) and International Energy Agency (IEA) repeated, grossly under-stated oil price risks and over-stated supplies (documentary). Left graph, Dallas Federal Reserve compares forecasted prices to actual. Right graph, ASPO compares forecasted supplies to actual. Like errors were repeated, year after year. The consequences? Foreclosures, unemployment, failure to adapt, housing and banking collapses. Life requires energy. Less energy, less life.
    Dallas Federal Reserve assessment of EIA
    • EIA failures to alert about rising oil prices can be seen in how many cities rigidly adhere to 2020 Plans that are based on gasoline costing $1.45 a gallon. Looking to Washington, city planners ignore local conditions of how foreclosures and unemployment devastate many of their citizens. Looking to Washington, city planners wait to be told what to do, ignoring that solar, wind and self-reliance are local.
    • Official Plans forced debt and costs that no customer would willingly pay. Gas prices increased from $1.45 in 2002 to $2.92 in 2006, eroding disposable income $2,000 per family per year. More and more families were forced to choose between paying for their mortgage or their commute. Foreclosures collapsed the banking system and housing market. One in seven Americans now lives in poverty.
    • Socialized costs not paid increased the national debt to $13.5 trillion.  Central planning made America the world's worst debtor, a supplicant begging the Saudis for oil and the Chinese to buy our debt.

    Bureaucracies are, by definition and character, the institutionalized suspension of judgment. We get ever more of what we have. Cars still have the same gas mileage as the Model-T. Pollution grows until it risks the balance of nature. Congestion gets worse, accidents more frequent, more debt, more oil imports. This is not the intent, but it is the measurable result. And amazingly, central planners dodge responsibility for infrastructure failures, while retaining control over the means of production. Socialism was a failure for Soviet central planners and is a failure for America.

    Consider another objective measure of innovation. How many politicians and bureaucrats are famous for their patents and inventions? Did Steve Jobs or Bill Gates create their innovations working for the government? Were Ford, Edison, Bell or the Wright Brothers funded by the government? Government managed know-how is hostile to innovators who are trying to change know-what.

    The scale of the opportunity in Transportation:
    CSX Railroad commercials note "Our trains move a ton of freight 423 miles on one gallon of fuel." Yet government planned networks move a person at 32 mpg in a car, 27 mpg in a bus and 38 mpg in a passenger train:

    • Next time you pay the small monthly fee for "unlimited calling" on your cell phone, remember centrally planned analog phone networks used to charge long distance. Private capital, not government programs, created the millions of jobs re-tooling communications infrastructure.
    • Next time you put $40 of gas in your car, think, a freight train could have carried you the same distance for $1.12 cents. About $38.88 of every $40.00 spent on oil is the potential profit and funds for jobs and materials to build infrastructure that provides on-demand personal convenience of an automobile while approaching the efficiency of long-haul freight.
    • Freight rail network construction was privately funded. The book Nothing Like it in the World describes how the railroads were built during the Civil War. An excellent model for re-tooling transportation and power. The government did use its balance sheet to lower interest rates, but not its cash.
    • Savings are not just money. Since 1975 Morgantown's PRT has delivered 110 million injury-free passenger-miles. In that same period, the governments' highway monopoly has killed 1.3 million Americans.
    • Yes, passenger trains, at 37 passenger mpg, are slightly more efficient than some cars. Rolling is more efficient, but they move three tons to move a person. Passenger trains ticket subsidies are about 30% in New York and 80% in Minneapolis. Someone driving a car must pay taxes to subsidize train operation costs.
    • Yes, at 27 mpg, per passenger mile buses are less efficient than a car. "Take the bus to be green" is green-washing by central planners trying to increase taxes for subsidies.
    The scale of the opportunity in Power:

    Thomas Edison was a premier inventor. Privately funded, he tinkered, finding the "trick" that made electricity commercially available.  Thomas Edison's 1910 comment on solar energy (Elbert Hubbard's Little Journeys to the Homes of the Great):

    "Some day some fellow will invent a way of concentrating and storing up sunshine to use instead of this old, absurd Prometheus scheme of fire. I'll do the trick myself if some one else doesn't get at it. Why, that is all there is about my work in electricity--you know, I never claimed to have invented electricity--that is a campaign lie--nail it!"

    "Sunshine is spread out thin and so is electricity. Perhaps they are the same, but we will take that up later. Now the trick was, you see, to concentrate the juice and liberate it as you needed it. The old-fashioned way inaugurated by Jove, of letting it off in a clap of thunder, is dangerous, disconcerting and wasteful. It doesn't fetch up anywhere. My task was to subdivide the current and use it in a great number of little lights, and to do this I had to store it. And we haven't really found out how to store it yet and let it off real easy-like and cheap. Why, we have just begun to commence to get ready to find out about electricity. This scheme of combustion to get power makes me sick to think of--it is so wasteful. It is just the old, foolish Prometheus idea, and the father of Prometheus was a baboon."

    "When we learn how to store electricity, we will cease being apes ourselves; until then we are tailless orangutans. You see, we should utilize natural forces and thus get all of our power. Sunshine is a form of energy, and the winds and the tides are manifestations of energy."

    "Do we use them? Oh, no! We burn up wood and coal, as renters burn up the front fence for fuel. We live like squatters, not as if we owned the property.

    "There must surely come a time when heat and power will be stored in unlimited quantities in every community, all gathered by natural forces. Electricity ought to be as cheap as oxygen...."

    Edison's insights on the ability to concentrate and store sunshine and electricity has been lost by a century of central planners. Displaced by socialized monopolies are the local railroads and windmills that operated 50 years ago. Also gone are the manufacturers and jobs of sustainable infrastructure. [summary of author's patent application for storing and distributing solar energy].

    Consider that life, the United States and all civilizations developed within a solar energy budget. Today, we know so much more about science, technology and manufacturing than when transportation and power infrastructures were socialized, protected from competition from new ideas.

    Will Innovators Fail:
    The constant objection from central planners is that innovations might fail. The truth, most innovators will fail. Free markets not kind to innovators. Edison noted he "found thousands of ways not to make a light bulb."  But, innovators have so few resources, their failures are tiny. And, a lot is learned in failing. Free markets create niches where ideas can be tried, fail, refined, commercialized and scaled. Private funding of ideas, requires most ideas to be very well thought out.

    Central planners, on the other hand, create civilization killers like debt, imported oil addiction and climate risks by socializing costs that should have been capitalized. Socialized costs cannot be measured and adapted to by people or markets.

    What will transportation and power infrastructure look like?

    At the Sept 2010 PRT conference hosted by Minnesota's DOT Commissioner, the House Transportation Committe Chairman stated his objection to experimenting with PRT with the comment, "We only want to do what we already know works."

    Central planners would tell the Wright Brothers that flight is impossible; Edison, that electricity and sunshine are to diffused to be commercially valuable; Steve Jobs that because of the Lisa, he could not create the MacIntosh, because of the Newton he could not create the iPhone or iPad. Innovation is a deviation from the known. Innovation is iterative; key components of understanding come only from experience.

    Customers are smarter than central planners because they reward and punish in real time based on their experiences (The Black Swan and The Wisdom of Crowds). Engaging the wisdom of the many is why free markets and democracies work.

    In a free market, inventions that delight customer will far exceed anything that can be forecast. BlueTooth, WiFi, the Internet, cell networks, texting, Google were not conceived or not in their present form when communications returned to a free market in 1984. Flip-phone communicators were only on Star Trek. It will be the same when transport and power return to free markets.

    In a free market the speed of deployment will shock central planners. It takes them a decade to build 10 miles of railroads. The Transcontinental Railroads, privately funded, were built at up to 10 miles per day with manual labor. Mulberry Harbors installed 20 miles of floating pontoon roads facing the North Atlantic in first three days of the D-Day Invasion.

    A century of socialized infrastructure created a profit potential of $38.88 of every $40.00 spent on oil. When that monopoly is broken, the scramble to convert current waste to profit/jobs/material will be similar to the boom of the Internet and cell phone networks. Developing countries will leap past the oil-powered economy as they did with cell networks.

    In a free market safety will be thousands of times better. Customers would not buy a crib with the safety record of the government's highway network; kills 14 of every 100,000 users. Only a government monopoly could exist with such a safety record.

    Governing by performance standards, stating what society needs instead of how to build roads, will attract entrepreneurs. Many will try, most will fail, some will be the Apple's, Microsoft, HP's and other companies that grew out of garages.

    In a free market, infrastructure winners are selected by customers not central planners. Selection is based on adding more value than the cost to complete, based on profits.

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