industrial policy

This article is about industrial policy. It worked for countries like Japan, Korea, Singapore and China. Basically, they were able to put vast pools of low-cost labor to work producing things to export to markets much bigger and richer than their own economies, using technology imported from those economies. That is no a recipe for success in today’s advanced economies. The article argues for investments in education, research, and innovation as the “industrial policy” of today. One interesting thing it does is draw parallels to the migration of manufacturing from the U.S. northeast to south.

In a recent International Monetary Fund working paper, we use these past successes to identify three principles that underlie what we call a “true” industrial policy. In the Asian “miracle” economies – such as Singapore and South Korea – as well as in Japan, Germany, and the United States, the government intervened early on to support domestic firms in emerging, technologically sophisticated sectors. The successful policies placed special emphasis on export orientation, and held firms accountable for the support received. Given the strong focus on cutting-edge sectors, this “true” industrial policy is essentially a technology and innovation policy (TIP).

Technology and innovation are key to economic growth. China’s Made in China 2025 program essentially emulates the strategy used by South Korea (and Japan before it) to escape the so-called middle-income trap. Likewise, the new UK and Franco-German industrial strategies focus on the industries of the future: renewable energy, artificial intelligence, and robotics.

Project Syndicate

progress on carbon capture technology

There is progress on carbon capture technology. Now I’m not scientifically illiterate, but I won’t claim to understand this story. What I gather is that earlier technologies used a lot of energy or required a lot of chemical inputs, or both, and this is an improvement.

Incumbent technologies are inherently inefficient due to thermal energy losses, large footprint, or degradation of sorbent material. We report a solid-state faradaic electro-swing reactive adsorption system comprising an electrochemical cell that exploits the reductive addition of CO2 to quinones for carbon capture. The reported device is compact and flexible, obviates the need for ancillary equipment, and eliminates the parasitic energy losses by using electrochemically activated redox carriers. An electrochemical cell with a polyanthraquinone–carbon nanotube composite negative electrode captures CO2 upon charging via the carboxylation of reduced quinones, and releases CO2 upon discharge.

Energy and Environmental Science

Sounds good. Of course, the moral hazard is that each technological advance like this is just seen as a license to pollute even more. I’m not going to stop yelling at those Exxon commercials where they talk about “plants a little more like plants”. YOU DIRTY MOTHERFUCKERS, YOU DELIBERATELY LIED TO US FOR 60 YEARS AND DESTROYED THE EARTH! NOW SHUT UP! Sorry, I lost control for a second there. I really hate that commercial. I never promised this blog would be 100% family friendly. Well, you know who is trying to kill your family and everybody else’s family? EXXON.

Fuck you Exxon

October 2019 in Review

Most frightening and/or depressing story:

  • A third of all of North America’s birds may have disappeared since the 1970s. (Truth be told, it was hard to pick a single most depressing story line in a month when I covered propaganda, pandemic, new class divisions created by genetic engineering, and nuclear war. But while those are scary risks for the near future, it appears the world is right in the middle of an ongoing and obvious ecological collapse, and not talking much about it.)

Most hopeful story:

  • I’ll go with hard shell tacos. They are one of the good things in this life, whether they are authentic Mexican food or “trailer park cuisine” as I tagged the story!  

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both:

  • A list of “jobs of the future” includes algorithms, automation, and AI; customer experience; environmental; fitness and wellness; health care; legal and financial services; transportation; and work culture. I’ll oversimplify this list as computer scientist, engineer, doctor, lawyer, banker, which don’t sound all that different than the jobs of the past. But it occurs to me that these are jobs where the actual tools people are using and day-to-day work tasks evolve with the times, even if the intended outcomes are basically the same. What might be new is that even in these jobs, you need to make an effort to keep learning every day throughout your career and life if you want to keep up.

There will still be openings for evil HR cats.

quantum supremacy

Google claims that its fastest computer, a quantum computer called Sycamore, is now faster than IBM’s fastest computer, a “classical” supercomputer called Summit. IBM is disputing the claim, but in any case it appears that quantum computers in general are making progress.

What matters is that Google’s machine is solving a computational problem in a fundamentally different way than a classical computer can. This difference means that every time its quantum computer grows by even a single qubit, a classical computer will have to double in size to keep pace. By the time a quantum computer gets to 70 qubits — likely within the next couple of years — a classical supercomputer would need to occupy the area of a city to keep up.

Quanta Magazine

Even if Google is the leader, I would assume that IBM, and a few other large corporations foreign and domestic, must have similar machines. Hopefully they will be used to improve lives, not just for nuclear weapons and derivatives trading.

still more ideas on funding Medicare for All

This Washington Post article offers still more ideas.

  • Redirect existing spending on Medicare, Medicaid, military hospitals and the Veterans Administration. (makes sense, as long as “Medicare for All” fully replaces these programs. Everybody hates Medicaid and it should just die. It didn’t occur to me until now that “Medicare for All” would replace the Medicare for all Old People we have now. If that is the case, it is disingenuous to include the current price of Medicare for Old in the price of Medicare for All, just for sticker shock purposes. Of course, sticker shock is an old political game. State the cost of your rival’s plan as a 10-year total, in inflated dollars, and any number you come up with will be shocking. And finally, I am assuming the actual physical Veterans Administration hospitals will not go away. Should we even consider expanding those or giving civilians the option of buying into them?)
  • a national sales tax on “non-necessities”, or a “progressive sales tax” (basically a VAT, but less efficient and possibly more progressive. My take: We should just do a VAT like all other advanced countries do. It is a very efficient, counter-cyclical kind of tax. The criticism is always that it is somewhat regressive. This can be countered by just redistributing some of the proceeds in a progressive way.)
  • a wealth tax (this makes me nervous. Even though it is fair in a moral sense, I think it may be a slippery slope where once the government starts grabbing assets, it could eventually go too far.)
  • Just call the new tax a “public premium” to distinguish it from the private premium most people are paying now. Or try to call the plan a “middle tax cut” because it will reduce overall health care cost for the middle class. (makes 100% logical sense, but the “tax and spend” counterattacks are obvious. A certain segment of the population is emotional about taxes regardless of logic. I think most of these people vote Republican regardless, but some will consider voting for a Democrat who is against taxes and those are the voters you risk losing by being honest and logical.)

I personally am comfortable just going with a payroll tax. I personally would be comfortable keeping some level of co-payments or deductibles. Things that should be “free” include preventive care, long-term medication that reduces risk of needing more costly care (e.g. insulin, blood pressure and cholesterol medication), and coverage for catastrophic events. People clearly need mental health and addiction treatment. But then is still some room for personal choices to decide how much health care we want to buy for what we expect to get out of it, given much better information on prices and outcomes than we have available now.

how defense cuts could fund Medicare for all

This New York Times op-ed goes through a series of defense cuts that could save $300 billion per year, enough to fund Medicare for All. The big ones are shutting down the big wars that are accomplishing little or nothing (or worse, creating future enemies and risks), closing foreign bases (and/or asking the foreign countries to fund them if they actually want them there), and phasing out most or all nuclear weapons.

I personally am indifferent between paying a monthly insurance premium vs. a monthly payroll tax to provide the same care at the same cost. But if we could get part of the way there with no tax increases at all, that is even better. Or, we could have a serious discussion about where else some of those current defense dollars could be spent (by the government) that would make us safer, richer, or healthier in the future.

goodbye my darling

The Darling, a major river in New South Wales, Australia (where Sydney, Canberra, and Melbourne are) has all but dried up. It’s not addressed in this article, but I recall that Australia’s political system has managed to anticipate and adapt to climate change reasonably well when it comes to drinking water for its major coastal cities. But one thing this article notes is that the country has gone from a net exporter to a net importer of wheat. It is also indigenous populations in the more rural areas who tend to bear the brunt.

my campaign platform for Philadelphia

I have to figure out who to vote for in local elections on Tuesday (I’m writing this on Sunday, November 3), so I like to think about what I would do if I were somehow put it charge. Now, I focus on policy rather than politics, and good policy is probably not good politics, so if you are trying to get elected you should take my advice with a grain of salt.

Policies that I would support at the federal and state level do not translate well to the local level in my mind. Looking at the whole country, a fair distribution of the wealth we have is important. At the local level, we have concentrated poverty within a narrow political jurisdiction, so there may not be enough wealth to go around, and if you try to grab what wealth there is and redistribute it, you may just scare the wealth across the jurisdictional border, which is just a couple miles away in any direction. So you have to focus on growing the pie if you want to have a chance at helping the poor. The local Democrats don’t do this – they are all about redistribution, skin color, sexual orientation, etc. The local Republicans are mostly racist jerks. There are a few independents who support pieces and parts of an agenda I could get behind, but nobody comes close to supporting a complete agenda to really explore real solutions to systemic problems.

So I thought about it and here is what I came up with:

  • Improve management of all city services and departments. Does this even need to be said? Yes, absolutely. We have a political and bureaucratic culture that resists learning and is tolerant of amateurism. We need to be open to learning about and adopting best practices from elsewhere, in all areas of government. We need to recruit, train, and retain talented individuals at all levels. We need to develop the leaders of tomorrow. The end result can be better services at lower cost.
  • Grow the work force and tax base. We can make it easy to start, license, and operate new businesses. We can connect the public, private and education sectors to provide education and training that matches actual skills with actual jobs. We can expand the innovation ecosystem to encourage startups and incubators, research and development, particularly in the biotech sector which is a local strength. None of this requires huge public spending. Philadelphia was a city of 2 million that has shrunk to about 1.5. We have room for at least half a million more workers and taxpayers, even more if we are willing to densify some neighborhoods. The gentrification issue makes this hard to talk about, but these could be highly productive, educated, talented professional people. Growing the pie with new taxpayers of some financial means would ultimately be good for everyone. Perhaps the gentrification issue could be somewhat defused if these new people were encouraged to spread out across many neighborhoods, all with excellent and equal transportation, education and other city services.
  • Replace regressive taxes with progressive ones, without increasing the overall tax burden. With the overall tax base growing, we could finally think about how to make it more fair and less burdensome to hardworking people and productive businesses. I don’t have all the answers here because this is not my area of expertise, but we need to follow the evidence, best practices from elsewhere, and try to at least bring local taxes in line with the larger metro area. We need to chip away at the public pension funding problem, because that will eventually come back to bite us if we don’t.
  • Law enforcement, criminal justice, and incarceration reform. I don’t have all the answers here, but again, look at best practices from elsewhere and follow the evidence. There are enormous potential financial savings here.
  • Preschool to community college education reform. Do I have to say it again? Learn about best practices, follow the evidence and innovate continuously. This is enormously difficult in the United States, but we have to keep chipping away at it.

glyphosate ban in Thailand

I find it interesting that Thailand is banning the herbicide glyphosate, which is widely used in the U.S. The U.S. is protesting this ban, and I wondered why until I realized that it could include a ban on importing food from the U.S. grown with glyphosate. One chemical and one relatively small export market might not be a big deal, but food is one thing the U.S. does still export in enormous quantities, and if bans like this spread on a larger scale and encompass more chemicals and biotechnologies, it could start to affect our agricultural practices. Probably for the better, but it could be complicated.

hard shell tacos

Hard shell tacos are not entirely an invention of the United States. As I learned in this exhaustive article on the subject, people in Mexico do deep-fry soft shell corn tortillas to make something similar to the hard shell tacos enjoyed in fast food joints, dive bars, and trailer parks in the United States. Mass production of the shells, though, goes back to a guy named Glen Bell, who started a fast food chain where the word Taco replaces his first name.

So U.S. tacos are roughly to Mexican food what spaghetti and meatballs are to Italian food or General Tso is to Chinese food. I say, try to enjoy some of the finer things in life while also not becoming too much of a snob. A couple low-brow cooking tips: Try the mass-produced hard taco shells with the square bottoms. Heat them up a little bit in the toaster oven. Beef and pork are both awesome, but if you feel bad for the mammals, ground turkey is also pretty good. Get the kind with lots of fat and thigh meat, not the ground turkey breast. It’s cheaper anyway. Fish tacos are also pretty awesome but a topic for another day. If it’s Meatless Monday, pinto beans with lots of toppings and seasoning are also very good, but let’s be honest, just not quite the same as a little flesh donated by our animal friends. Fry your onions a little bit and both your tongue and stomach will thank you.

Long live Taco Tuesdays!