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  • The Worst Of State-Sponsored Stupidity And The Best Of Private Innovation 10 comments
    Dec 4, 2013 3:37 PM

    Public transportation attempting a 20 mile per hour turn

    This is a tragedy because people were killed and others were injured. It is also a scandal because it was completely unnecessary, an unforced error.

    SpaceX blasting a satellite 22,000 miles above Earth

    This is a triumph. While our government has stopped going to the moon, our industry is reaching further and further into space. Such innovative thinking cannot bring back those lost, but it can improve - and save - lives in the future.

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Comments (7)
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  • Ba1k3es
    , contributor
    Comments (667) | Send Message
    I don't see the point.


    What about the worst of Private Sponsored Stupidity vs the Best of Public Innovation. Just a few months ago there was the West Fertilizer explosion. If private innovation is so great, why is it decades behind the public version, NASA.


    For every SpaceX, there is an Enron or a Bernie Madoff.


    It is really a diservice to paint things this way. But I guess idealogy blinds even those who pride themselves on rational judgement. Actual people do these things and most strive for their best. Look at accuracy of weather predictions on the private sector vs public (and try to rationalize the fact that the private sector gets access to the Public's for FREE).
    4 Dec 2013, 05:11 PM Reply Like
  • TheSandman
    , contributor
    Comments (81) | Send Message
    You mean like the many predictions of the "Worst Hurricane Season Evah?"


    Sure, not all Public is bad and not all Private is good. But if Private fails they go bankrupt and are liquidated; when gov't fails they get more money to fix the problem (cf. education spending per pupil.).
    5 Dec 2013, 09:54 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (9252) | Send Message
    Author’s reply » Exactly right. Much of the government's impact on the economy is not the direct impact of its taxing and its spending, but the indirect impact of the perverse consequences of its actions, which typically boil down to softening or reversing incentives. A funny recent example was a congressman who was able to -- in a single sentence -- indicate his view that the government needs to 1.) stop high gas prices and 2.) encourage greater fuel efficiency. Most of our political debate would evaporate were it conducted between people who had all read Henry Hazlitt's Economics in One Lesson.
    5 Dec 2013, 10:05 AM Reply Like
  • Ba1k3es
    , contributor
    Comments (667) | Send Message
    My point is anyone can point to examples good or bad in either sector, and picking at either extremes really doesn't make a persuasive argument but rather is more on par with a 24/7 newsite shock factor point.


    The public sector can thwart many examples of the "Tragedy of the Commons" that we face as a society. I find it ironic that someone with such an asteem for being bias conciense and making fundamental - data driven decisions puts out this idealogical crap, instead of using data backed by logic to make an argument.


    Chris, I find your investment advice to be sound, with clear thought, and in general far better than the rest. However, it is disapointing that when it comes to macro or other areas of society that all that goes out the window to make way for this idealogical drivel.
    5 Dec 2013, 03:07 PM Reply Like
  • TheSandman
    , contributor
    Comments (81) | Send Message
    "private sector gets access to the Public's for FREE"


    When was the last time you bought gasoline without tax, then drove on an interstate?
    5 Dec 2013, 08:45 PM Reply Like
  • Ba1k3es
    , contributor
    Comments (667) | Send Message
    What does this have to do with a comment about weather and how the accuracy of the public sector's forecasts are often on par or better than the private sector's when the private sector gets access to the public sector's data for free.
    5 Dec 2013, 09:05 PM Reply Like
  • Ba1k3es
    , contributor
    Comments (667) | Send Message
    Did you purposely try to distort, or do you just have poor reading comprehension, Sandman? It was clear I was talking weather.



    Does anyone not see the comedy that the public sector has sent satellites to space decades earlier, and now this is considered an achievement? Is anyone who visits the Hoover Dam, not impressed? Don't get me wrong, I love the private sector and there are many things they are much better at. However, there is a place for the public sector, for example instances of "Tragedy of the Commons" or "Paradox of Thrift" where it is better suited to tackle those challenges.
    5 Dec 2013, 09:07 PM Reply Like
  • TheSandman
    , contributor
    Comments (81) | Send Message
    My apologies. This is Chris's investing blog, not an open political forum. Anonymity shouldn't preclude manners.


    One can lose a lot of money investing ideologically. That is a whole field of study in behavioral finance, which is not covered in Chris's original post.


    So weather it is. It is no doubt that government weather and climate forecasting have been a net positive: lives saved from hurricane modeling and early tornadic warnings, crops planted with advanced climate models, and shipping navigation avoiding ice floes and terrible storms.


    But since as long as I have been studying them (my PhD is in physics/fluid dynamics & complex systems) the government climate models have not been just spectacularly wrong, they may be criminally fraudulent. Comparing temperature records published today and several years ago, the past keeps getting adjusted cooler so that the 1930's dustbowls weren't as bad, and the 2000's keep getting adjusted warmer. One can also easily document urban heat island effects being mitigated by making the surrounding stations warmer.


    In the latest IPCC report, nearly all independent climate models are more than 2 sigma away from the actual temperature record.


    NOAA predicted a warm winter:
    Have you checked the temperatures recently?


    So what is the penalty for the terrible, no-good, incorrect climate predictions (ignoring the potentially fraudulent manipulation of government-owned temperature records.)? Ans: they get more money to study the problem. I know this first hand, being a part of that racket.


    What would happen if a private company submitted manipulated financial records to the SEC so that current profitability meets past forecasts? (Hopefully, it would involve ropes and gallows!) I leave this as an exercise to the reader.
    6 Dec 2013, 10:41 AM Reply Like
  • Ba1k3es
    , contributor
    Comments (667) | Send Message
    Wow, you really like tangents, or have trouble actually debating on the same point.


    The whole debate was public vs. private, and is private always better. I brought up weather forecasting as an example that public sector performs just as well as the private.


    Then you state an example of NOAA predicting warm weather, but you are saying they were way off. Ok, but this doesn't show me the private sector performs better.


    In fact it doesn't, current studies show that no models/ forecasts of temperatures show any skill more than about 5 days in advance as compared to using just historical averages whether it is private or public.


    Studies do show, however, that NOAA's weather forecasting is basically about the same as the BEST in the private sector.


    So you might ask if NOAA knows their current skill level cannot predict temperatures better than historical averages, why should they make predictions based on models? Obviously, so that when that it can be documented, so it can be checked against later to see how they performed and if/when they start developing prediction capabilities that perform better than averages.


    Your manipulation conspiracy, I will ignore.
    6 Dec 2013, 11:59 AM Reply Like
  • Aharon Levy
    , contributor
    Comments (130) | Send Message
    Lack of understanding of incentives and rent-seeking behavior are improperly accounted for in most policy debates. And that is a huge problem.


    That said, the notion (as noted by one commenter and agreed to by DeMuth) that private industry is superior because when it fails (/when such failure is discovered) it liquidates is problematic. Would we be better off if the government liquidated wherever it failed? Maybe we would; there are certainly some who argue that. But government liquidation is often socially problematic in a way that private liquidation isn't.


    Finally, I think the "Look at this train crash/Look at this rocket launch" style of argumentation is extraordinarily problematic, not just in this context but throughout public discourse. I think humans inherently like narratives, and are particularly drawn to simple oppositions, often to the exclusion of a more sophisticated understanding (and I think DeMuth is a very sophisticated and open-minded thinker). SpaceX has received about half its financing from NASA, and train travel is still safer than car travel...
    11 Dec 2013, 07:47 PM Reply Like
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