Government Stories 2016

Stories that earlier appeared in Nelson's News
Note: Carl Nelson Consulting, Inc is not an investment adviser and may hold a financial interest or client relationship in companies discussed.

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More hope than Obama's.  The big winner in 2016 was the small-company Russell 2000 stock index, which gained 19.5%. The small-cap index got a huge lift after Election Day, surging nearly 14% as investors began to price in what they believe will be a better outlook for smaller, domestically focused U.S. companies under a Trump administration.  .... The stock market, which once feared a Trump presidency, has rallied sharply since the billionaire businessman’s surprise win. The so-called “Trump Rally” has been driven by a belief that the president elect’s business-friendly policies will be a major boost to the economy and, most important, corporate profitability.  [Adam Shell, USA Today, Dec 30, 16] Signs are that free-market big biz is back in the saddle with Trump cronies heading the departments, especially SBA.Trump didn't have much operating room in picking liutenants since he didn't do government in his real estate empire.   No sign of a job-making revolution he promised in campaign days, and the Republicans in Congress may or may not tone down the love of small biz in programs like SBIR. Stand by for almost anything.

Talk was easy, institutions powerful.  candidates with magical solutions, promising a painless and rapid restoration of prosperity. ...   will almost certainly be disappointed. The scale and complexity of modern societies, entrenched private interests, and institutions ossified by powerful countervailing forces increasingly make radical reformations difficult -- even in the face of widespread dissatisfaction. In all likelihood, nothing much will change in 2017   [Sayajit Das, Bloomberg View, Jan 2, 17]

Republicans have won their chance. Now it is time to see what they can do with it. [New York Times, Jan 2, 17] Their apparent first two moves in support of the forgotten men who voted them into office:  tax cuts for the rich and health insurance removal for 30 million sick and unappreciated common folk.

Mr. Cohen notes that all presidential candidates’ views of national security change once they’re in office, because they’re forced to confront the world as it is, not the world as they wish it to be. The problem is that Mr. Trump apparently does not sit still for the intelligence briefings that try to describe the world as it is. And if that’s the case, the future may not be as dark as Mr. Cohen foresees. It may be darker.  [reviewing Elliot Cohen's The Big Stick, New York Times, Jan 2, 17]  On the campaign trail, talk is free and often fantasy.  In office, action counts and has consequences as the enemy gets a vote.

Michael Lewis on Trump:  “The truly bad thing about Trump is that he’s exploiting for his own gain the envy that some people feel, playing on their resentments. He denigrates and preys on people who are unlucky and then reinforces the good fortunes of people who are already lucky.”  [Walter Isaacson, Washington Post, Jan 1, 2017]

Social media has swallowed the news – threatening the funding of public-interest reporting and ushering in an era when everyone has their own facts.  [Katherine Viner, Guardian, Jul 12, 16]

George Orwell argued that clichés indicate the corruption of thought by politics; speakers relying on them reveal an absence of original mental effort.  [Danielle Allen, Foreign Affairs, Jan/Feb 17]

Trump said telecommunications company Sprint notified him that it would move 5,000 jobs back to the U.S. from overseas. [Wall Street Journal, Dec 28, 16]  No mention of how many of those jobs would go to poorly educated angry white males in the Rust Belt. But maybe their motivation wasn't jobs, but something more visceral exploited by a showman white male.

Phantom research. A former research scientist at the Lawrence Livermore National Laboratory was sentenced to 18 months in prison Tuesday for turning in false data and reports to the federal government to receive funding over a four-year time period. ...  submitting false data and reports to the Intelligence Advanced Research Projects Activity (or IARPA) to defraud the government out of funds intended to pay for research, according to the U.S. Department of Justice.   ...  Federal officials did not say what became of the funds fraudulently received from the government.     [Katrina Cameron, East Bay Times, Dec 21, 16]

Perhaps you’d like to leave your day job to start a small business; the absence of Obamacare’s heath care exchange might mean you cannot. .... [Without Obamacare mandate] people purchasing individual health insurance will be more likely to use it, and the cost will go up accordingly, pushing more people out of market. That, in turn, could set off the so-called “death spiral” as insurers pull out. All that chaos will almost certainly affect the market for employer insurance in some (not good!) way.  [Helaine Olen,, Dec 27, 16]

A stable world of productive institutions protected by military strength was the project led by the U.S. after World War II. It came to be known as Pax Americana, or peace through global U.S. leadership.  In a world so disordered that attending [a New York] church puts one’s life at risk, reinventing a Pax Americana appropriate to the 21st century is overdue.  [Daniel Henninger, Wall Street Journal, Dec 28, 16]  And which nationalist Americans who elected Trump are ready to pay the price for Pax Americana?  Trump will have to figure out how to be both for and against Pax Americana as tax cuts for the upper class consume Republican priority. 

Fearing Trump's scienceIf anyone has any questions left about what Donald Trump's energy plans will do to the climate, just read his brand new website for clarity.  [Dana Hunter, Scientific American, Dec 26, 16]   Since science relies on truth through testable hypotheses, and Trumpism relies on mob-pandering fantasies, science has a justified fear. Which means relying on Congress to put science in law.

Amateur hour.  “The key here is not the fact that these are smart, successful people who view the world differently,” [historian Tim] Naftali said. “That’s not new. It’s the fact that the center of the operation has absolutely no experience managing policy differences.”  An additional concern, he said, is that Mr. Trump may permit people to approach him through back channels that disrupt an “orderly policy process.”  [Damian Paletta, Wall Street Journal, Dec 27, 16]

Faith over failure.  Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did. ....  Mr. Brownback’s policy gave businesses an incentive to come to Kansas. But it also gave existing businesses a big tax break—or a reason to restructure to avoid paying taxes—without creating any new jobs.  [Richard Rubin and Will Connors, Wall Street Journal, Dec 23, 16]

Always need a villain.  No candidate talked much about automation on the campaign trail. Technology is not as convenient a villain as China or Mexico, there is no clear way to stop it, and many of the technology companies are in the United States and benefit the country in many ways. Andrew F. Puzder, Mr. Trump’s pick for labor secretary and chief executive of CKE Restaurants, extolled the virtues of robot employees over the human kind in an interview with Business Insider in March. “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex or race discrimination case,” he said.   [Claire Cain Miller, New York Times, Dec 21, 16]  Stand by, Michigan, for even more job losses encouraged by SECLABOR.

Who's winning?  since [Trump's] victory, the preponderance of benefits has gone not to the 99 percent but to the much-reviled 1 percent of which Trump is of course a card-carrying member. Over the past month, U.S. stock markets have been roaring.   ....  Not even the most robust trickle-down theory suggests that equity market gains create jobs.  ....  Trump’s supporters will give him some time to demonstrate what’s in it for them, but not much.  [Zachary Karabell,, Dec 22, 16]

SBIR Insider Rick Shindell reports that Congress passed the 2017 National Defense Authorization Act (NDAA) which contained language that keeps SBIR/STTR authorized through September 30, 2022. ... Most of the "base" SBIR/STTR program remain the same, but "pilot" programs expire September 30, 2017.   Uncertainty of contracts will prevail until Congress enacts a full budget supposedly by April 2017 when the Trump turmoil should be in full swing with ultra-business people at the upper levels of the Executive Branch and eager to impress.   They seem likely to order things that the courts and the Congress will eventually  reverse.

National Academy of Sciences published another SBIR report, this time the Department of Energy, one of the five agencies with serious SBIR money. It said the program was meeting most of the SBIR law's objectives. How nice.  Something north of $4 billion dollars spent over three decades and the major result is that the agency satisfied Congress's one-and-only prime objective: pass out money to small biz without having to fight about in annual appropriations.  So much the better if anything good happens even if it would have happened anyway.   It's not the least bit clear that  small biz would not have got the same total money in open competition.  And with various excuses, the economists on the review group never asked SBIR's economic impact for the nation.  Because NAS knows that Congress does not want that question asked. It did report that only 2% of the projects attracted venture capital. Does that mean that the economics of the stuff is poor or that the government is competing with private capital investment by giving taxpayer's capital away for votes?  Good economic results in a few companies? Of course, as a wag noted in the early days of Star Wars - you should expect some economic good to come from spending $4 billion.  Free download of report.

The SBA is wasteful cronyism. Federal bureaucrats have no clue which small businesses deserve funding. Likewise, workers don't need a Department of Labor to set one-size-fits-all labor policies. Let competition set the rules. Employers and workers will make the choices and contracts that work best for each of them.  I hope Andy Puzder and Linda McMahon take over the SBA and Labor Department, then immediately shut them down  [John Stossel,, Dec 21, 16] Reason, wishing for a return to the 19th century, wishes the Executive Branch had the power to close unfavored agencies. But it does not have that power which must originate in Congress. Any moves to ditch SBA would ditch SBIR with the same shovel.

New York state’s population shrank between 2015 and 2016, according to U.S. Census Bureau estimates. [Todd Kehoe,   Albany Business Review, Dec 20, 16]  Let's guess high taxes and low temperatures pushed retirees out. Although low taxes and high temperatures did not keep Mississippi from a decline also.  Where did the New Yorkers go?  Biggest gainer - Texas.

Kansas failed tax-cut experiment leads to Democrats picking up 13 seats in legislature. Distaste for the governor, combined with a decreased emphasis on social issues like abortion, created an opening for candidates like Mr. Parker [elementary school teacher], who campaigned largely on the budget and the threat he said conservative policy-making posed to public schools. ... Mr. Brownback, who took office after eight years of Democratic governors, has led a rightward policy shift. He signed legislation rolling back income taxes and eliminating some business taxes, all the while assuring voters that economic growth would help make up for lost revenue. [Mitch Smith, New York Times, Dec 21, 16].

Private profit, political jealousy. Kite Pharma (Santa Monica, CA; no SBIR, founded 2009, IPO 2014) succeeded in developing a marketable immunotherapy partly through a CRADA with NIH.      ....   Kite’s treatment, a form of immunotherapy called CAR-T, was initially developed by a team of researchers at the National Cancer Institute, led by a longtime friend and mentor of Dr. Belldegrun. Now Kite pays several million a year to the government to support continuing research dedicated to the company’s efforts.Kite says it has not decided what to charge for KTE-C19, but Dr. Belldegrun hinted that Kite’s therapy might be relatively expensive because ideally it would be a single treatment that would cure the patient, not a drug that would have to be taken continuously. He added that Kite would take steps to make sure that everyone who needed the drug could get it. ...... Kite says it has spent more than $200 million on research and development, including running larger clinical trials than those conducted by the cancer institute, and recently spent about $30 million to build a factory that will be able to make treatments for up to 5,000 patients a year. .....  The National Institutes of Health, the parent agency of the National Cancer Institute, currently has about 400 cooperative research agreements with companies, and licenses hundreds of patented inventions for private-sector development.  ...   Kite’s two main competitors, Novartis and Juno Therapeutics derived similar immunotherapy treatments largely from academic institutions, developed at least in part with government funding. ....  Hillary Clinton, in her campaign for president, promised to set new rules for federal support of research so that Americans “get the value they deserve” for the money taxpayers spend in supporting research. [MATT RICHTEL and ANDREW POLLACK, New York Times, Dec 19, 16]

The Defense Innovation Unit Experimentalor DIUx, is based in Mountain View, California. Its aim: tap into projects already in the works at startups and companies, then adapt them to national-security missions. The private sector funds the R&D, while the DoD procures the products and services — allowing DIUx to run on a shoestring. After a shaky start, due in no small part to cultural differences between Californian technologists and traditional military types, the pseudo startup has relaunched itself and started to thrive. Writing for MIT Technology Review, Fred Kaplan explains how DIUx has overcome the Pentagon’s byzantine processes to discover exciting new ideas —but must now face up to an uncertain future with Donald Trump as president. .... The management problemIn Silicon Valley’s culture, meetings end either with a decision on whether a deal is possible or, often, with the deal itself. In the Pentagon’s culture, meetings lead to more meetings, which might lead to an R&D contract in 18 months, followed by testing, approval, then a renewed competition for a contract to build a prototype in another couple of years, then an assessment, followed by several more stages. No one in the Valley could put up with such delay:   [, Dec 19, 16]   DOD had three decades of SBIR opportunity to connect innovation with their missions. But they spent most of their SBIR money on safe predictable R&D that only a government could love. To get real innovation they had to wait for private investment to invent and develop stuff that the military could adopt in its normal deliberate fashion that emphasized control and uniformity of equipment.  Except of course when bombs were exploding in their faces and they needed something quick, like iRobot's  IED killers.  Star Wars SBIR actually adopted a similar attitude, that insisted that Phase 2 SBIRs go to companies that could attract investment from third parties as validation that the tech had a future that the military could later tap after private (or DOD) development investment.  That idea lasted about eight years until the Star Wars bureaucracy grabbed the money for more safe and sane conventional R&D after the idea's champions retired.

Kaplan tells a story:  In 2006, Raj Shah was an F16 pilot in the U.S. Air Force, flying combat missions in Operation Iraqi Freedom. It was the war’s worst year, and Shah had a problem. The display screen in his cockpit had no moving map. The GPS showed him ground coördinates, but there was no overlaid image—no moving dot or icon—that showed where he was in relation to those coördinates. “There were times,” he recalls, “when I didn’t know whether I was over Iraq or Iran.” During home leave, he bought an iPAQ, one of the early pocket PCs, and loaded it with a standard, cheap aviation-map program. Back in his F16, he strapped the pad to his lap and relied on it—not the plane’s multimillion-dollar mil-spec software—for navigation.   .... Today Shah is managing partner of DIUx Kaplan's article

a repeal [of Obamacare] would unleash the awesome power of loss aversion, among the more deeply rooted human tendencies known to behavioral scientists. Their consistent finding: The amount of effort people will expend to resist being stripped of something they already possess is significantly larger than the effort they will devote to acquiring something they don’t already have. ....  people would fight hundreds of times harder to retain the health benefits they currently possess than they would to acquire those same benefits if they lacked them. [Robert Frank, New York Times, Dec 17, 16]

[NASA's] longstanding investment at its Glenn Research Center in heat pipes helped Thermacore (Lancaster, PA; something like $25M SBIR 1983-2010) adapt the technology to wick away dangerous heat during brain surgery.   One story: When NASA needed a cryocooler to install on the Reuven Ramaty High Energy Solar Spectroscopic Imager, engineers at Goddard Space Flight Center turned to Sunpower (Athens, OH; $6M SBIR) for help. The company's cryocoolers feature just two moving parts and have a long lifespan. After 18 SBIR contracts, the company has a dozen models of cryocoolers that are aiding research in space and are employed in high-powered telescopes, multispectral and hyperspectral scanners, and superconductors on Earth.   [NASA Spinoff 2017]  Sounds like two cases of a federal mission agency using SBIR for straightforward engineering that uses proven technology for useful products. But then, SBIR allows both the agency and the company to proclaim innovation for whatever they're doing.  No watchdogs are watching.

Ego trip and campaign policy reversal.  “I’m here to help you folks do well,” Mr. Trump said. to the most successful tech executives in the country. A complete abandonment of Ronald Reagan's idea that government was the problem, not any solution.  The candidate who warned during the presidential campaign that Amazon was going to have antitrust problems, that Apple needed to build its iPhones in the United States instead of China, was nowhere to be seen. [DAVID STREITFELD, New York Times, Dec 14, 16]

Crony capitalism is dead in Washington! Long may crony capitalism prosper worldwide under Donald Trump!   .... Even if you believe everything Trump does is motivated solely by love of country, one cannot serve two masters. And if there is anything that Trump’s 70 years have established it is his love of money. .... There is only one legitimate solution to this looming national security and Presidential integrity nightmare. Trump must create a blind trust and have others not within his crony capitalism sphere pick an independent broker—and that broker must liquidate all Trump holdings with full disclosure of the terms of each deal.   [David Cay Johnston, The Daily Beast, Dec 14]  For Christmas, The Donald could go cold turkey withdrawal from his conflicts of interest. Or he could give all his children a copy of a book "Let's Pretend: A Fable."

New York Governor announced a $650 million initiative to support the development of biotech in the state of New York, where life science businesses have had trouble for years gaining a foothold despite a strong core of biomedical research work in New York City and beyond.   ...  three main components: $250 million in tax incentives for both new and existing biotechs; $200 million in state grants earmarked for laboratory space; and another $100 million to invest in early-stage life science companies that will be “matched” by at least $100 million in support from private sector partnerships.  [Ben Fidler,, Dec 12, 16]  Big state, big taxes, big plans.  Small, proudly tax-avoiding states, can't do such things with paltry state revenue.  Unfortunately for the proudly low budget states, they have weaker education and unattractive politics for tech  entrepreneurs.

Boeing is pledging to donate $1 million to help pay for events surrounding Donald Trump’s inauguration Jan. 20. ...  matches the amount Boeing gave to President Obama’s 2013 inauguration.   [Puget Sound Business Journal, Dec 9, 16]  No hard feelings Mr Pres, you have your game and we have ours. BTW: we'll still be here when you evaporate.

Trump denied the likelihood that Russia directed cyberattacks related to the U.S. election, despite contrary findings by the nation’s intelligence official. .... Earlier, his transition team said the CIA had botched its analysis of Iraq’s program of weapons of mass destruction in 2003, implying the agency couldn’t be trusted now.  [Shane Harris, Wall Street Journal, Dec 10, 16]  His evidence: I don't want to hear it. But he earlier loved to hear the same report about Russain diddling with his opponent's election campaign. Lawmakers of both political parties vowed to investigate.  If "they lied before" is the standard for credibility, Trump would be rated multiply unbelievable.

Hammers.  To borrow the psychologist Abraham H. Maslow’s words, if all the men around President Trump are hammers, the temptation will be “to treat everything as if it were a nail.”  [Gordon Adams, New York Times, Dec 9, 16] Case 1:  military officers in national government.   Case 2:  these troubling social trends linked to a dysfunctional economy help explain why Donald Trump outperformed Hillary Clinton in counties with the "highest drug, alcohol and suicide mortality rates." The people in those troubled areas were seeking economic change that the Democrats, as embodied in Hillary Clinton, simply weren't offering. But Donald Trump did.  ....  As a first step, the new administration and Congress need to work together to cut and simplify taxes, deregulate businesses, and end the costly travesty of ObamaCare.    [Investors Business Daily, Dec 9, 16] No matter the societal ill, tax cuts are the answer.  Stand by for four years of enriching the rich in search of solutions for economic and social problems of the unrich.

Let biz be biz.  Business leaders are predicting a dramatic unraveling of regulations on everything from overtime pay to power-plant emission rules as Donald Trump seeks to fill his cabinet with determined adversaries of the agencies they will lead.  [Wall Street Journal, Dec 6, 16]  At EPA  He’s an untrained anti-environmentalist. He’s a polluter. He’s a fossil-fuel fanatic, a lobbyist-lover, a climate crazy.  OR  He’s a constitutional scholar, a federalist (and a lawyer).  arguing that States, with their unique knowledge of local problems, economies and concerns, were free to innovate their own solutions.   [Kimberly Strassel, WSJ, Dec 8, 16]  Which has some merit if all the environmental harm stayed within the state boundaries. What's missing is protection of the rights of state citizens when a dominant state political force overrides those rights in service to a particular set of state entities.  It could be the classic purchase of the state legislature by moneyed interests or plain class discrimination like the post-civil war South. The rightist WSJ Op-Ed writers naturally take the side of business that subscribes to its publication.  Strassel would give Oklahoma uncontrolled power to discriminate against its citizens. 

DIY Intelligence. In an interview with Time magazine, President-elect Donald Trump again flatly denied that the Russian government was involved in launching cyber attacks on the Democratic party and a top advisor to Hillary Clinton during the presidential election. Trump said that despite the consensus of the U.S. intelligence community that Russia attempted to influence the U.S. presidential election, “I don’t believe it. I don’t believe they interfered.” Asked if he thought the various U.S. intel agencies were politically-driven in their assessment, Trump replied, “I think so.” [Foreign Policy sitrep, Dec 8, 16]   Characteristically, Trump offered no evidence for his view. Stand by for showman government where the standard for truth will be "What I think ought to be true."

[Trump] defended his prospective cabinet against criticism that it is too packed with wealthy people, arguing that the ultrarich are precisely the ones who should be leading the government. [JULIE HIRSCHFELD DAVIS, New York Times, Dec 8, 16]  Having ridiculed his opponent as a tool of the elites, he appoints the super elites to manage his government.  Along the same line: Trump’s predicament is reminiscent of the neighborhood dog who loves chasing cars, only now his jaws are locked tight onto the rear bumper of an 18-wheeler heading cross-country. In foreign policy, the stakes for Trump are obviously enormous — but so too in domestic policy, because half the country is nearly insolvent. Half can’t afford an unexpected $500 bill for a car repair or medical emergency. He will be held accountable.  [David Smick, National Review Online, Dec 8, 16]  But so far, his appointments are people who are likely to make life even tougher for the insolvent half  because most of their pet ideas simply mean to raise business profits.

SBA Wrestler. Linda McMahon, the co-founder of the pro-wrestling enterprise World Wrestling Entertainment was selected by President-elect Donald Trump to head the Small Business Administration. [NPR, Dec 7, 16]

Euphoria. Major indexes reached new records as investors embrace the prospect of tax cuts, regulatory rollbacks and fiscal stimulus under President-elect Donald Trump.   [Wall Street Journal, Dec 7, 16] Despite the warnings of economists about Trump's empty campaign promises.  Ah well, they got him elected.  And he is even going to improve government by personally negotiating the price of a multi year development and procurement of new Air Frce One planes. He will find the development of military hardware and services is tricky business. Boeing knows a lot more than he does about the biz and the military is always changing its mind about what it wants.

When Presidents Defy Economic Gravity, Gravity Usually Wins   ....  If Mr. Trump really wants to boost manufacturing employment he would figure out how to train workers to fill some of the 334,000 manufacturing jobs that are now vacant. If he doesn’t have the patience for that, he should just raise tariffs across the board. It would hurt consumers and could start a trade war, but at least they’d be transparent. [Grep Ip, Wall Street Journal, Dec 7, 16]

[Trump's] style, including his opaque personal financial dealings and his sudden shots at certain companies, has helped unnerve a corporate America that traditionally craves stability. Some business leaders and economists have worried whether executives can speak their minds about the president-elect or his policies without fear of facing Trump’s rage.   [Drew Harwell and Rosalind S. Helderman, Washington Post, Dec 8, 16]

President-elect Petulant  called for canceling Boeing Co.’s work on a new version of Air Force One, asserting that the company was trying to rip off taxpayers.  “The plane is totally out of control,” Mr. Trump said   [Doug Cameron and Damian Paletta, Wall Street Journal, Dec 6, 16] Boeing said it had a $170 million contract to study the equipment that a redesigned Air Force One might need. That project has just gotten underway, so billions of dollars in cost overruns at this point appear to be impossible.  [MICHAEL D. SHEAR and CHRISTOPHER DREW, New York Times, Dec 6, 16]  Mr Petulant will soon have the power to terminate the contract for convenience of the government with appropriate termination penalties. Then he can order the Defense Department to keep the present planes or to start over with open competition, including possibly foreign, even Russian, aircraft makers. Maybe even a Trump subsidiary company. 

Quotation of the Day  "This is getting ridiculous fast, when an important policy and acquisition decision is being made by Twitter." RICHARD L. ABOULAFIA, an aviation consultant with the Teal Group in Fairfax, Va. [New York Times]

Cheap talk is just that. the nonpartisan Congressional Budget Office predicts roughly 2% annual growth for gross domestic product pretty much as far as the eye can see.  But Mr. Trump says his tax, trade and other policy proposals will generate average annual GDP growth of 3.5% or more—a pace the U.S. hasn’t seen in more than a decade. The last stretch of sustained growth above that level ended in 2000.  [Ben  Leubsdorf, Wall Street Journal, Dec 5, 16] Trump's Republican forerunners have made those promises for three decades with little result, or else Trump wouldn't need to promise such stuff.

One of Donald Trump’s most consistent campaign promises has been to prevent U.S. businesses from moving good jobs to Mexico -- whether through taxes, jawboning, or more drastic means, such as an outright prohibition. Economists might regard this as a misguided form of protectionism, but in fact, it’s worse than that: If instituted, it could prove a major step toward imposing capital controls on the American economy and politicizing many business decisions.  [Tyler Cowen, Bloomberg View, Nov 29, 16]

Second order effects. Bernie Sanders said the Carrier deal is incomplete and leaves the incoming Trump administration open to threats from companies.  "Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives," Sanders wrote in a Washington Post opinion piece  [Emily Stephenson, Reuters, Dec 1, 16]  Dear Donald: you can never change just one thing.

Latest grandiosity. Trump said his administration would usher in a new “Industrial Revolution.”  ...  “The era of economic surrender is over,” he said. “We’re going to fight for every last American job. It is time to remove the rust from the rust belt and usher in a new industrial revolution. We’re going to do it.”  [Damian Paletta and Peter Nicholas, Wall Street Journal, Dec 1, 16]  The quadrennial triumphant entry into Washington on a white horse.  But any such revolution powered by technology is likely to reduce the number of jobs for less than well-educated workers who elected Trump's fantasy economics. To launch his revolution so far is assembling one of the wealthiest administration teams in recent memory. .. claiming  prospective appointees a “cabinet of winners,” and said their backgrounds give them insight into how to improve the economy for the middle-class workers in America.   [Rebecca Dallhouse, Wall Street Journal, Dec 1, 16] But all except the President have to divest their conflicting interests which would be many.

China plans to clamp tighter controls on Chinese companies seeking to invest overseas, in an effort to slow a surge in capital fleeing offshore. [Wall Street Journal, Nov 2, 16] Feeling the bite of capital drain.

 Fault lines inside the corporate world are emerging over a proposed rewrite of the U.S. tax code, pitting importers against exporters.   At the heart of the fight is a Republican plan in Congress that would impose corporate taxes on imports while eliminating them from exports, a move that would upend decades of tax policy. [Richard Rubin, Wall Street Journal, Nov 26, 16] Fantasy games continue about how Republicans could get away with unilateral trade restrictions with no adverse consequences from trade partners.

Francis Fukuyama, the Stanford University professor who famously said Western-style liberal democracy was triumphing in an “End of History” global political evolution, now says Donald Trump’s coming presidency could usher in the collapse of the postwar world order.   [Ian Talley, Wall Street Journal, Nov 25, 16]  Could the angry white males of the upper Midwest crash the world, or will the US Constitution's separation of powers prevail again in maintaining stability?

Trickle-down  returns. Yet for now, Mr. Trump’s emphasis on tax cuts and deregulation is ushering in an ’80s-like euphoria among the rich. .... As he told the wealthy crowd at the [elegant 21] restaurant, “We’ll get your taxes down. Don’t worry about it.”   [Robert Frank, New York Times, Nov 26, 16]

A vulture for Commerce. Wilbur Ross, the billionaire investor considered the "king of bankruptcy" for buying beaten-down companies with the potential to deliver profits, is President-elect Donald Trump's choice for commerce secretary, a senior transition official said.

First conflict.  Trump holds stock in the company building the disputed Dakota Access oil pipeline, and pipeline opponents warn that Trump's investments could affect any decision he makes on the $3.8 billion project as president.  [Minneapolis Star Tribune, Nov 25, 26]  A president who owns interests in 500 companies has an insoluble problem - keeping the trust of the voters. What he could say: look, the voters knew well that I was concealing my businesses during the campaign and they elected me anyway. I promise to make the best decision for the country whenever the potentially 500 conflicts arise. Raise your hands if you believe him.

4.2 million Americans lose overtime pay, Republicans rejoice. [The Independent (UK), Nov 26, 16]  Beauty is in the eye of the beholder.

Trump promised jobs.  As the management consultant Warren Bennis famously observed: “The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”  [Tom Friedman, New York Time, Nov 22, 16]    He also promised a lot of other fantasies on which he is already waffling.   What he will eventually learn is that whatever exists does so for a reason - lots of people want it that way as the best available compromise.  Extremes make good press but not bad policy.

tens of thousands of square feet of brownfield where abandoned plants like giant art installations depict what capitalism looks like when it doesn’t need people any more .... Because just as almost every nation has a Middletown, most western nations also have a Trump. Indeed, in no small part, they have a Trump precisely because they have a Middletown and their Middletown is suffering. ... each applies the same mixture of patriotic fervour, class grievance, racial animus and economic insecurity to their own national conditions.  [GaryYounge, Guardian, Nov 18, 16]

To placate voters by raising tariffs is to tackle 21st-century globalisation with tools better suited to the 20th (or even 19th) century. Given the new world of global supply chains, a tariff is like erecting a wall in the middle of a factory.   [The Economist, Nov 18, reviewing  The Great Convergence: Information Technology and the New Globalization. By Richard Baldwin]   But, tariffs are something an uneducated mill-worker can understaand and vote for.

When Donald Trump was asked in October how the U.S. should respond to various Chinese excesses, he said that if “we cut off [the economic] relationship with China, China would go bust so fast.” Of course so would everyone else, given China’s integration into the U.S. manufacturing supply chains and its heavy investment in U.S. real-estate and financial markets. The reason the measures would backfire is not that China “controls” the United States, as many Americans fear. The problem is that the two economies are now part of one large whole.  [James Fallows, Atlantic Monthly, Nov 15, 16]

Good news for the rich: the downtrodden whites elected a president to cut taxes for the rich with a fairy tale of economic wonderworks justified by "dynamic scoring." Accordingly, Republican political economists will tell us what the cutters want to hear of growth from new investment.  Never mind that the same scheme fell on its face recently in Kansas, a laboratory of democracy. It's all part of the pig-in-a-poke that the voters chose in the form of Trump's economic promises.

 Brent Scowcroft, former National Security Advisor: "If you're asked to serve [in the Trump administration], please do. This man needs help." (Via tweet by Strobe Talbott.)   Looking for a challenge?

Reality looms. the frustrated working-class voters who cast their vote for Mr. Trump are likely to remain as frustrated as ever: stuck with insufficient education in a world of low growth and diminishing opportunity. Maybe they will figure out that most of the industrial jobs they lost are gone for good, that protectionism can’t bring them back, and that the main driver of their plight is technological change. The critical question then is not so much how Mr. Trump’s supporters will respond politically but how Mr. Trump will react to their inevitable disappointment.  [Eduardo Porter, New York Times, Nov 15]

If wishes were horses. near the top of Trump’s to-do list is a pledge to double economic growth from its recent desultory rate of 2 percent a year to 4 percent — through massive tax cuts, the relaxation of government regulations and measures that curtail imports. ... but his proposed policies would also elevate economic uncertainty — and uncertainty hurts growth   [Robert Samuelson, Washington Post, Nov 14]  Economists have for three decades called the tax-cut growth engine a mirage. Kansas has again proved it a mirage for government revenue.  And there's no economic support for expecting huge growth, if any, from fewer regulations and import restriction. Some of those wishes could increase corporate profits but unless that profit growth is supplemented by new investment, there's no growth engine at all.  We certainly are not short of capital for investing, only short of much compelling economic incentive for doing so.  On the other hand, the deficit increase he would create would help put money into the economy, much more than the tax cuts would since the rich tend to save theirs. But economist Tyler Cowen warns againmst measuring progress by GDP:  Even if the Trump administration makes bad infrastructure decisions and wastes a lot of money, measured GDP still is going to rise. ... The real danger is that a year or two from now, Trump will be a popular president, pointing to real gains in GDP numbers, even if his policies aren’t better for the longer run. Oh Donald, you economic fantasizer, the election is over and you have to adopt realistic economics.  But then, presidents have abused Keynes's ideas for decades to justify their pandering to the electorate.

I’D LIKE to wake up now please,” tweeted Sam Altman, who heads Y Combinator, Silicon Valley’s foremost startup school.  To many in the technology industry, America under Donald Trump means dystopia. Perhaps no other sector regards his victory with less enthusiasm.  The main reason is that his stated views are antithetical to the beliefs that most entrepreneurs and tech types hold on a range of topics from trade to offshoring to policy on immigration.... [Trump] has said, “If I become president, oh do they have problems”.  [The Economist, Nov 12, 16]

Isolation Step One. A sweeping Pacific trade pact meant to bind the U.S.and Asia effectively died Friday, as Republican and Democratic leaders in Congress told the White House they won’t advance it in the election’s aftermath, and Obama administration officials acknowledged it has no way forward now. [Wall Street Journal, Nov 11, 16]

Mine it 'til it's gone, and move on. The menhaden, the largest catch pulled from the Atlantic, is at the heart of a debate between conservationists who want to protect the fish and fisheries that want to profit from it. [Wall Street Journal, Nov 11, 16]   Why governments make regulations.

Toll roads and landing fees. Trump’s proposal to devote $1 trillion to new infrastructure construction relies entirely on private financing, which industry experts say is likely to fall far short of adequately funding improvements to roads, bridges and airports [Wall Street Journal, Nov 11, 16] Would Trump invest his own money in regressive taxation for public facilities.

Hot new old idea.   a massive $1 trillion infrastructure program, an expensive border wall, and massive tax cuts aimed largely at the wealthy. ... no plan to reduce the debt ...   that economic growth under his watch would be so great as to make the problem irrelevant.  [Chris Matthews, Fortune, Nov 11, 16]  Spend ourselves out of debt as a new nominally Republican president plans to trigger massive growth by public spending with low interest debt.  What could go wrong, especially with promises from a business and political genius?  With enough assumptions, any such plan could be justified and has been often over the years. Somehow the promises never came true as Kansas is presently finding with its tax cuts and diving public approval.  The most recent such program , the 2009 stimulus, resulted in  “All we have gotten from tilting at Keynesian windmills,” they wrote, “is a doubling of our national debt from $10 trillion to $20 trillion under Obama-Clinton and the weakest economic recovery since World War II – combined with depleted infrastructure and a shrunken military.” say UC Irvine economist Peter Navarro and private equity investor Wilbur Ross.  [Michael Hiltzik, LA Times, Nov 11, 16]   Maybe we could estimate the result if we could see the full results of Trump's development ventures and finances over the years.

AJ Trump elected by upper Midwest. Andrew Jackson’s brand of populism—nationalist, egalitarian, individualistic—remains one of the most powerful forces in American politics. [Wall Street Journal, Nov 11, 16]

WWTD? Carrier’s decision to move the [Indiana] factory to Monterrey, Mexico, will eliminate 1,400 jobs by 2019. Mr. Trump quickly made the factory Exhibit A in his argument against the trade policies of Republicans and Democrats alike. .... on the campaign trail, threatening to phone executives at the company and its parent, United Technologies, and to hit them with 35 percent tariffs on any furnaces and air-conditioners they imported from Mexico .....  for the Carrier workers in Indianapolis and millions of other blue-collar workers, no matter how they voted, nuances like that do not matter so much now. Just the hope that Mr. Trump will try to reverse the long decline in their neighborhoods, their living standards and even their longevity is an emotional balm.  ....  “He’s not presidential material. But  I want to give him a chance.”   [Nelson Schwarz, New York Times, Nov 12, 16]  Now that the dog has caught the car, what next?   Of course, the optimum strategy would be to compensate the losing workers in Indiana from a small tax on air-conditioners for everyone else.  Unfortunately, conservative politics won't allow such a strategy that couples tax increase for all with a dole for a few.

Fox in henhouse. Myron Ebell, who revels in taking on the scientific consensus on global warming, will be Mr. Trump’s lead [trasition] agent in choosing personnel and setting the direction of the federal agencies that address climate change and environmental policy more broadly. Mr. Ebell's organization is financed in part by the coal industry. [Henry Fountain, New York Times, Nov 11, 16]  The climate will not be impresssed.

Who wins favor?  Political scientists Martin Gilens and Benjamin Page asked: When voters at the 90th, 50th and 10th percentiles of income disagree about policy (keep in mind that they usually agree), with whom do presidents side? The answer: Presidents are much more likely to do what the wealthiest Americans want than what ordinary or poor Americans want. Surprisingly, John Kennedy, Lyndon Johnson and President Obama tended to side with the rich even more than George W. Bush and Ronald Reagan did. Presidents respond more to what high-income voters want than what the ideological majority wants. Just why this pattern holds is still being researched.  One possible upside: High-income voters tend to be better informed, so perhaps siding with richer voters gets us better government.  [Jason Brennan, WashPo, Nov 11]

Transition Team (with the Heritage Foundation playing a key role) : We’ll ‘Dismantle’ Dodd-Frank. and seeking a foe of financial regulation for the powerful position of Treasury secretary.  [Wall Streeet Journal, Nov 10, 16] Politics!  Having been elected, in an Electoral College quirk, by the people who were hurt by the largest financial crisis in 75 years, the new Pres wants to destroy the financial protection against a repeat of the collapse.   The stunning surprise of the election, and the political chaos it created, is a boon for Washington’s lobbying corridor known as K Street.  Corporate America is both excited and anxious about the prospect of Mr. Trump’s presidency, seeing great opportunity to shape the agenda after an extended period of frustration over gridlock in Congress.  [Eric Lipton, New York Times, Nov 10, 16]  So much for Trump's campaign against lobbyists. But then who would a businessman trust if he had no knowledge whatever of government?

Investors are doubling down on a bet that Republican control of the White House and Congress would boost fiscal spending and increase the prospects of tax cuts.  Deficit hawks stand aside, there's a new spending boss in town paying off the people who voted against him.

He will now have to deliver, though, and this is where the problem lies. He has identified two very real problems in American politics: increasing inequality, which has hit the old working class very hard, and the capture of the political system by well-organized interest groups. Unfortunately, he does not have a plan to solve either problem.  ...  , unfortunately, his only answer is the traditional populist-authoritarian one: trust me, the charismatic leader, to take care of your problems.  [Francis Fukuyama, Foreign Affairs, Nov 10, 16]

Liar contest: Russia was in contact with Trump’s team during his campaign, a Kremlin official said. A Trump aide denied the assertion. Meanwhile  President-elect is nvolved in an array of private [fraud] lawsuits around the country,  [Wall Streeet Journal, Nov 10, 16]

Youngstown beware:  When steel mills fail to return, the white working class will wonder how it got betrayed.  [New York Times, Nov 11, 16] Politics loves economic fantasies, and Ohio voted for a return to the days of steel production for a demanding world with no international competitors. That idea died in the 1970s as cities like Youngstown and Bethlehem could not compete with new technology and cheap labor in foreign mills. Trump campaigned on promises to reverse the laws of economics, at least that's what they heard in Ohio and Pennsylvania. 

Democracy is fundamentally a means by which citizens get to tell their leaders what they want. What many now want is to banish their leaders.   Either the new leaders will find a way to make global capitalism a more enriching proposition for larger numbers of people, or they, too, risk being swept aside as anger builds.  [Peter Goodman, New York Times, Nov 10, 16] 200 years of democracy has produced great wealth and a residue of economic losers who can vote.  The more losers, the greater the anger.  Trump now has his hour for saving capitalism, the critics will be harsh, and the economists dubious.

a new report by a group of 120 robotics experts. Intended to brief the U.S. government on the state of robotics so that the government can better plan for the future, the Roadmap to Robotics report is sponsored by [NSF] (and a few universities) and written by experts from the private sector as well as academic institutions.

Who's in charge here?   Republican elected leaders don’t look at all like America’s electorate. Today, 87 percent of House Republicans are non-Hispanic white men, compared with just 43 percent of House Democrats.1 For context, in 2014 just 34 percent of eligible U.S. voters were non-Hispanic white men.   [David Wasserman,, Nov 5, 16]

The Defense Department will seek out a chief innovation officer to oversee programs designed to encourage employees to solve problems creatively, the Pentagon announced last week.  [DefenseOne, Nov 2, 16]  Good luck with that; the Pentagon is a collection of semi-independent armed forces with Congressional committee backers in a world where budgets are the game. As in: A top Army general is sounding the alarm over Army ground combat vehicle development or the lack thereof. [Foreign Policy, sitrep, Nov 3, 16]

"Ninety-eight percent of the adults in this country are decent, hard-working, honest Americans. It's the other lousy two percent that gets all the publicity. But then, we elected them." - Lilly Tomlin.  But then, they are what we make them.

US policymakers, they argue, too often live in the ‘United States of Amnesia’, with sometimes catastrophic consequences. It’s time for them to start listening to historians as well as to economists  [Neville Morley, Aeon, Nov 1, 16] Unfortunately, both history and economics suffer from political abuse of the facts.

Big talk, empty economics.  there is an even more important reason Trump supporters, particularly less-educated white males, should be wary of his bluster: His policies won’t help them. Trump promises to bring their jobs back. But most of their jobs didn’t go to a Mexican. They went to a microchip.The idea that large numbers of manual factory jobs can be returned to America if we put up a wall with Mexico or renegotiate our trade deals is a fantasy. Trump ignores the fact that manufacturing is still by far the largest sector of the U.S. economy. Indeed, our factories now produce twice what they did in 1984 — but with one-third fewer workers. ...  Trump has shown no ability to talk about any policy issue with any depth. Harlan Coben’s debate-night tweet last month had it right: “On Aleppo he sounds like a fifth grader giving a book report on a book he never read.”    [Thomas Friedman, NY Times, Nov 2]  In general, the government has a lot less influence on the economy than the politicians promise. Vote for realistic economics with realistic people.

A former Pixar executive who won the first-ever Oscar for software is taking over a U.S. government agency responsible for improving federal digital technology. ... The Technology Transformation Service is part of the U.S. General Services Administration. It was created in April to “transform the way government builds, buys and shares technology.” It includes “18F,” a Silicon Valley-style startup for government digital projects that was the subject of a highly critical review by the agency’s inspector general over its financial losses of $32 million and lack of viable financial planning, among other issues.   [TAMI ABDOLLAH, AP, Oct 30, 16]  GSA is not noted as a pioneer in technology development, and a pioneer will find a lot of smothering blankets in such an agency. But this seems to be the wave as Obama officials say they're preparing an 'options paper' for the next president’s transition team that envisions consolidating IT services similar to the way DISA works within the Defense Department.  [Joseph Marks, DefenseOne, Oct 30, 16]

[NY] Governor announced that 39 businesses have joined START-UP NY and will expand in or locate to New York State through the innovative, tax-free program associated with colleges and universities across the state. These 39 businesses have committed to create 817 new jobs and invest more than $30 million statewide over the next five years. START-UP NY now has commitments from 202 companies to create at least 4,490 new jobs and invest more than $251 million over the next three-to-five years throughout New York State.   [press release, Start-up NY, Oct 20, 16]

the company said “the rights of every one of our employees and those in the community are a very high priority and core to our firm’s values.” [as] CoStar Group ultimately accepted from the state of Virginia to open a major new facility in Richmond, according to documents obtained by the Observer [even though] North Carolina offered more than double the state incentives   [Katherine Peralta, Ely Portillo and Rick Rothacker, Raleigh News & Observer, Oct 27, 16]  No equal-opportunity employer could invite competitive employees to work in an obviously biased political jurisdiction, especially one that also attempts to impede voting by minorities. If the majority wants to live in their majority world, let them hire each other in a closed society of declining competitiveness.

Conservatism desceding.  talk radio, cable TV and the internet have turned conservative opinion into a mass-market enterprise. Today’s dominant conservative voices try to appeal to people by the millions. You win attention in the mass media through perpetual hysteria and simple-minded polemics and by exploiting social resentment.  [David Brooks, NY Times, Oct 27]

Chutzpah speech. President Vladimir Putin said the Kremlin has no preference in the U.S. presidential elections but Republican candidate Donald Trump does reflect the needs of average people who object to entrenched power.  [Laura Mills, Wall Street Journal, Oct 27, 16]

The Republican nominee for president is in danger of losing not just the election, but something dear to a man who claims the marketing value of his name alone is worth $3 billion: the many customers, mostly wealthy, who have stayed at his hotels or booked them for weddings, played a round at his golf courses or held galas at his oceanside resorts.  Experts say the Trump brand is tarnished and at a tricky crossroads as his appeal shifts from the well-heeled, high-income people he has long courted to a more middle-class base, including the fervent fans he cultivated during the campaign.  [Bernard Condon,  AP, Oct 25, 16]  If you know what you are doing in business and don't know what you are doing in politics, stick to business.

If only.  Donald Trump will cut taxes, reduce regulation, unleash our abundant energy and eliminate our trade deficit through muscular trade negotiations that increase exports, reduce imports and eliminate cheating. These policies will double our economic growth rate, create 25 million new jobs, boost labor and capital incomes, generate trillions of additional tax revenues and reduce debt as a percentage of GDP.   [Wilbur Ross private-equity investor and Peter Navarro business professor at the UC Irvine are senior policy advisers to the Trump campaign, Wall Street Journal op-ed, Oct 24, 16]  Meanwhile, European and Asian investors have been rushing into the United States bond market, spurred by a global glut of savings that has reached record levels. [Landon Thomas, New York Times, Oct 24]  Most propositions for cutting taxes start with "cut my taxes."  The Trump miracle, echoing the Reagan dream, relies on the trickle-down idea that allowing the rich to keep more of their income will liberate a flood of investment capital.  Most economists will say that capital won't invest until high profits will result, and the current capitalists are rushing to buy government bonds instead. Dismal economics meets  the paradox of thrift.

Trickle-down flailing.  Republican Governor Sam Brownback of Kansas. Brownback, despite promising to measure the results of a “real life experiment” in cutting taxes, has decided to cancel a quarterly report on the status of the state’s economy.  ...   The problem was that the reports didn’t match the governor’s predictions for the state’s soon-to-be-booming economy. ... Indeed, since the tax cuts were passed, almost nothing has gone as promised in Kansas. Revenue plunged and the state resorted to pulling money out of its rainy-day fund to plug the holes. A number of critical services, including for road maintenance and schools, were cut. The business climate has been poor, and the economy has lagged behind neighboring states as well as the rest of the country. [Barry Ritholz, Bloomberg, Oct 24, 16]

The National Geospatial-Intelligence Agency (exempt from SBIR) has recently been making deliberate efforts to meet early-stage private sector companies developing technology that might be viable to its multifaceted mission to provide intel for national-security efforts, and humanitarian and relief agencies. .... trying to look [in incubators] for technologies that are pretty much ready to go in six to seven months—they don’t necessarily require much development. [Defense One, Oct 21, 16]

the typically large gap between what economists devise and what politicians promise, and what public-spending programs actually deliver. As ECB President Mario Draghi has put it, “There aren’t many public investments with a high rate of return.”   [Michael Boskin,, Oct 20, 16]  Try asking the rate of investment return from SBIR after three decades. Unknown; only political returns.

if we’re in technological stagnation, there’s not much we can do. Yes, there are some things government can do to boost innovation at the margin, like reforming patent laws, lifting onerous regulations, and investing in research and development. But in the long term, the forces of progress are difficult to predict and control. If we’ve already exploited the biggest innovations, we need to reconcile ourselves to living lives not much better than those of our parents. That would be a disappointing outcome, but it might be the best we can do.   [Noah Smith, Bloomberg,, Oct 20, 16]  The world has plenty of investment capital ready to exploit new profitable ideas.  Government can help with research that creates new ideas, although not with the development stage in which government's knowledge and incentives are political since an elected Congress decides where to collect and expend money. We could stop beating ourselves and our politicans for not producing fantastic growth (like 6% per year) while we at least enjoy the many fruits of what we have done already.

The saving grace of anti-expert populists is that they do discredit themselves, simply because policies originating from the gut tend to be lousy. If Donald Trump were to be elected, he would almost certainly cure voters of populism for decades, though the price in the meantime could be frightening.  In Britain, which is sliding towards a wreck of a divorce with its most important trading partners, the delusions and confusions of the Brexit camp will probably exact an economic price that will be remembered for a generation. [Sebastian Mallaby, The Guardian (UK), Oct 20, 16]

Conform to win. What is the most significant factor associated with whether or not a R01 research proposal receives funding after going through NIH’s vaulted peer review system?  .... the process or approach – the ability of the researchers to conform to the established, logical, linear incrementalism expected.  In a study of 123,000 research awards from the NIH, among all of the criteria used through the peer review scoring system, how well a R01 proposal scored in the approach criterion was found to be most strongly predictive of a funding decision, according to the June 2016 paper, How Criterion Scores Predict the Overall Impact Score and Funding Outcomes for National Institutes of Health Peer-Reviewed Applications. The authors, MK Eblen, RM Wagner, D Roy Chowdhury, KC Patel, and K Pearson are from the NIH Office of Extramural Research (OER).  [Mark Skinner, SSTI, Oct 20, 16]

Donald Trump Is the First Demagogue of the Terrorism-and-Climate Change Era, By Robinson Meyer. The Atlantic October 20, 2016.  he won't be the last. [Defense One, Oct 20, 16]

Rick Shindell [SBIR Insider] reminds us that SBIR again needs re-authorization, but it is no slam-dunk. The likelihood of an SBIR/STTR reauthorization in the 114th, is virtually non-existent.  In reality, after the election we will have only about 8 working months to try and pass SBIR reauthorization, and considering the last time we fought for reauthorization, it "only" took from Oct of 2008 to December of 2011.  Keep in mind, our community started to fight for the 2008 reauthorization back in 2006!    After three decades SBIR is still a chore in the eyes of the federal R&D agencies who never wanted it in the first place. After all, if they wanted such a program, they could have built their own.  It was shoved down their throats, and kept there, by happy political feelings about small biz. It will require another round of frantic pleadings because it has never proven its economic value.  It produces decent R&D for the mission agencies who could have gotten equivalent R&D from open competition among all entities big and small.  It could have measurable economic value if it were run like a venture capital program that deals in high risk, high impact ideas that would have a low percentage project success but a huge total payoff from the few spectacular winners.  But federal agencies do not naturally think that way, except for NIH and DARPA.

WHEREVER I go these days, at home or abroad, people ask me the same question: what is happening in the American political system? How has a country that has benefited—perhaps more than any other—from immigration, trade and technological innovation suddenly developed a strain of anti-immigrant, anti-innovation protectionism? Why have some on the far left and even more on the far right embraced a crude populism that promises a return to a past that is not possible to restore—and that, for most Americans, never existed at all?  [Barack Obama, The Economist, Oct 8, 16] Because Americans pride themselves on looking forward with history fast fading in the rear-view mirror. History also requires thinking on a longer time scale that tweets allow.  Easier to just long for a golden age that never was, and expect  political candidates to conjure it up.

I was starting to wonder about what the real Hillary Clinton — the one you never get to see behind closed doors — really stood for. But now that, thanks to WikiLeaks, I’ve had a chance to peruse her speeches to Goldman Sachs and other banks, I am more convinced than ever she can be the president America needs today.  Seriously, those speeches are great! They show someone with a vision, a pragmatic approach to getting things done and a healthy instinct for balancing the need to strengthen our social safety nets with unleashing America’s business class to create the growth required to sustain social programs.   [Tom Friedman, New York Times, Oct 18] Since stability is government's main role, we need long-range thinkers and strategizers in office.

[DARPA]’s Microsystems Technology Office is introducing a “simpler contracting approach” for companies that haven’t sold to DARPA and haven’t won large Pentagon contracts, according to a recent announcement.  That initiative is supposed to help the agency connect with companies specializing in machine learning, sensors, hardware security and other technology that draws both commercial and government buyers, according to DARPA. [Mohana Ravindranath, DefenseOne, Oct 14, 16]  DARPA is the DOD's technology imagination.

By a nearly 2-to-1 majority, 64 to 35 percent, Americans favor an active U.S. role in the world, writes Ivo H. Daalder, U.S. ambassador to NATO from 2009 to 2013, and now president of the Chicago Council on Global Affairs.

Back to normal pump priming.  six-year run of declining annual budget deficits had halted: The shortfall for the fiscal year that ended Sept. 30 was $587 billion, an increase over last year in dollars and as a percentage of the economy.  [Jackie Calmes, New York Times, Oct 14, 16] Stop the deficits and watch the economy suffer a decline of 3% with the absence of government spending.   It's simple economics: more spending creates more economic activity.  Next month, the election will end the fantasy promising, and we will return to regular wrestling of public demands for all the government programs with no agreement how to pay for them.  SBIR's defenders will continue their fantasies also.

Victoria ran first.  "There’s a woman running for president.   "She is criticised for her ties to Wall Street. [...] Many find her untrustworthy; investigations into her past fill the newspapers. [...] even her marriage is the subject of public speculation and debate.   "Her ambition alone is alienating to some and her most vociferous critics have even likened her to the devil. Rather than send her to the White House, there are those that wish to see her locked up in prison on election day."  Ellen Fitzpatrick, author of The Highest Glass Ceiling: Women's Quest for the American Presidency, was not talking about Hillary Clinton.   The New Hampshire University professor of history was speaking about Victoria Woodhull, the first woman to run for president in 1872. [Rachael Revesz, The Independent (UK), Oct 14, 16]  In 1872, she would have had to beat US Grant for re-election, the 19th century Ike.

newspaperman H.L. Mencken once observed, "The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."   [Ronald Bailey reviewing Progress: Ten Reasons to Look Forward to the Future, by Johan Norberg,, Oct 14, 16]

"The USS Mason (DDG-87) launched two Standard Missile-2s (SM-2s) and a single Enhanced Sea Sparrow Missile (ESSM) to intercept...two presumed cruise missiles fired by Iran-backed Houthi-forces...that were launched about 7 P.M. local time" Sunday, the U.S. Naval Institute's Sam LaGrone reports. "In addition to the missiles, the ship used its Nulka anti-ship missile decoy" while "in international waters north of the strait of Bab el-Mandeb." [Defense One, Oct 12, 16] The news is that the Navy could detect an incoming missile quick enough to usefully fire at it, and that it had rules of engagement to shoot. No doubt the actual launch group will throw up contradiction propaganda on the event. At which the Navy can shoot truth missiles.

A messy road.  The real value of the WikiLeaks documents is one the hackers may not have intended. The documents, particularly the speech extracts, portray Clinton as she is: a hard-headed centrist who believes that electoral politics inevitably involve making compromises, dealing with powerful interest groups, and, where necessary, amending unpopular policy positions. ....  in January, 2014, she said, “I mean, politics is like sausage being made. It is unsavory, and it always has been that way, but we usually end up where we need to be.”  [John Cassidy, New Yorker, Oct 12, 16]  Instant news analysis and campaign rhetoric, though, in search of eyeballs, focus on the controversy implicit in every political move of any kind.

two things that have never happened before in a U.S. presidential debate. First, Republican nominee promised -- if elected -- to politicize the U.S. Justice Department by ordering an investigation into Hillary Clinton, making a very direct threat to send her to jail. Second, [he] contradicted his own vice presidential pick who last week outlined a military policy for Syria and criticized Russian President Vladimir Putin, two things Trump said he disagreed with.    [Paul McLeary with Adam Rawnsley, Foreign Policy sitrep, Oct 10, 16]  Ultra-authoritarian, shades of Mussolini, seeks absolute power.

Denial to acceptance. Weak economics promote angry politics which raise uncertainty, leading to still weaker economics starting the cycle again. Publics have lost confidence both in the competence of economic leaders and in their commitment to serving broad national interests, rather than the interests of a global elite. A number of longtime economic leaders in the public and private sector seem to be making their way through the grief cycle — starting with denial, moving to rage, then to bargaining and ultimately to acceptance of new realities.  [Larry Summers, WashPo, Oct 7, 16]

Ready, Fire, Aim. Trump said as many as 70 percent of federal agency regulations could be eliminated if he is elected, just hours after an adviser said the candidate would seek to cut 10 percent.  Trump, who blamed regulations for stifling business.    [Chris Kaufman, Reuters, | Oct 7, 16]  Few candidates for serious office have had such a low level of specificity for their claims of actions they would take. Trump's approach: think of a big number, double it, and claim to do it, . details after election.

Economists say the economy is puttering along with growth about proportional to population count. What effect will the election have? Not much, the economy putters on its own with neither much help nor hinderane from politics.  The annual government deficit keeps total spending growing, regardless of all the hand-wringing from politicians who don't understand economics anyway. Remember that the most importaant government role is not economic growth; it is stability that encourages investment. But since the candidates cannot attract votes with that message, they appeal to the self-interests of the crowd: Democrats with trageted handout programs and Republicans with fantasy economics of lower marginal taxes and fewer regulations.Each side can get 40% with its standard scheme, and the election is won in the persuadable voters in he middle who look more on the general features of the candidatess and the national situation.

Politics for fun and profit.  Throughout his career, [Trump] and others close to him made campaign contributions to state officials, in particular from New York, when they had on their desks pending decisions or investigations regarding the Trump real-estate empire. [Wall Street Journal, Oct 5, 16]  Now he wants the big chance for profit with no commitment to unlinlink fully from his businesses.

What, if anything, can the government do to make turnarounds in growth possible? Some economists would say nothing. They believe that longer-term prosperity is the product of innovation changes and labor force demographics that are largely beyond the influence of macroeconomic policy.  [Narayana Kocherlakota., Oct 4, 16] Not to worry, though, the political candidates will promise all kinds of powerful growth if you just hand them the reins of office.  Unfortunately, most of them know little about the mechanics of economics, only about the mechanics of counting votes and campaign contributions. They spend far more of their time trolling for political dollars than trolling for a working grasp of economics.

[VP candidate Pence] was also more consistent in painting the Democratic ticket as career politicians unwilling to shake up Washington.   [AP, Oct 4, 16] What is this : "Washington" that Republican politicians out of office run against? Both houses of Congress are controlled by the same Republicans and all 535 elected by the people of the 50 statess. Are the candidates against the people's choices of representatives?  If so, why are the members of Congress re-elected in such great numbers?  Ah well, it's the silly season again. 

Trump trumpets his hiring workers, but.  While the entire Atlantic City casino industry suffered as neighboring states eased gambling laws, Trump’s performed significantly worse, as their revenue on average fell $50 million per casino more than his rivals’— or a third more.  These findings are statistically significant, meaning that the Trump casinos’ poor performance was not random. It had something specifically to do with how they were run. In particular, it means that if you worked at a Trump casino, you were nearly 40 percent more likely to lose your job than if you worked at one of the others.....  Meanwhile,  He has bragged that “Atlantic City fueled a lot of growth for me” and that “[t]he money I took out of there was incredible.”    [Jonathan Lipson, The New Republic, October 3, 2016]

It used to be that seeking utopia marked a person out as naïve (or deranged). But modern attempts to reform the economy and society hint that utopians are making a more respectable comeback. .... A slew of books have arrived to celebrate the utopian spirit, notably two on the history of utopia in the United States. Erik Reece’s “Utopia Drive” is a travelogue through the ghosts of America’s nineteenth-century intentional communities.   [Akash Kapur, New Yorker, Oct 3, 16]    Politics has degraded to sound bite wishful thinking.

"To truly make America safe, we must make [name something secret] a major priority - which I don't believe we're doing right now'. JFK 1960 on missiles, and Trunp 2016 on cybersecurity.   With all the facts highly classified, political candidates are free to make up the state of play. Claims without credible proof deserve no acceptance.

Dog chasing car.  As president, [Trump] says he would create a Syrian safe zone and swiftly draft a plan to defeat ISIS 'fast'. If and when the armchair general caught the car, what woud he do with it?  Like the economists in a deeep hole, "assume a ladder."

Coherent prargraphs or Tweetshatred. It courses through Twitter at an alarming rate, turbocharged by this year’s political campaigns and the rise of anti-immigration movements that dabble in racist, sexist and anti-Semitic tropes across the globe. And this is to say nothing of its use by terrorist recruiters. [Jim Rutenberg, New York Rimes, Oct 3, 16]   With anonymity and without editors,  the basest human motives come alive.

Say something, anything. The 24/7 news cycle and the million multiplying platforms with their escalating demands—for pictures, video, sound, the immediate hot take—exhaust politicians and staff, and media people too. Everyone is tired, and chronically tired people live, perilously, on the Edge of Stupid. More important, modern media realities make everything intellectually thinner, shallower. Everything moves fast; .... .The need to say something becomes the tendency to say anything.  [Peggy Noonan, Wall Street Journal, Oct 1, 16]

Donald Trump Trashes Nafta. But Unwinding It Would Come at a Huge Cost. By NEIL IRWIN [New York Times, Oct 2, 16] Rejecting the free-trade deal with America’s neighbors would mean upending major industries and a generation’s worth of economic integration. Progress rarely comes for going backward to an imaginary golden age. Business and economics adjusts to change and establish a new equilibrium that would be cast adrift by substantial change that had no provable argument in its favor.  Trump claims that YUGE jobs would return after trashing established traade deals; mere wishing.

"It's round," he said. "Oh, no, it's green," she said.  Trump And Clinton Sounded As If They Were Talking About Two Different Countries, notes, widely considered as the most accurate predictor of elections.   Each appealing to an expectant base of voters in starkly different tone and approach. A highly experienced government official who has been on the frontlines of national poliicy, and a complete outsider with not a day of government experience who says everything is bad, trust me to fix it. Thus works democracy with wide suffrage in a diverse population.

Look back, see down. HUMANS are a gloomy species. Some 71% of Britons think the world is getting worse; only 5% think it is improving. Asked whether global poverty had fallen by half, doubled or remained the same in the past 20 years, only 5% of Americans answered correctly that it had fallen by half. This is not simple ignorance, observes Johan Norberg. .... Pessimism has political consequences. Voters who think things were better in the past are more likely to demand that governments turn back the clock. A whopping 81% of Donald Trump’s supporters think life has grown worse in the past 50 years. [The Economist reviewing Progress: Ten Reasons to Look Forward to the Future  by Johan Norberg, Sep 3, 16]  They get their views from their neighbors and self-selected friends by Twitter and Facebook free of all editorial checks.

Interest rates have plunged since the financial crisis, indicating that the world’s savings are chasing too few investment opportunities. In normal times, this would be manageable. Central banks could cut their policy rates, reducing borrowing costs for firms and households and encouraging them to tap the reservoir of savings. Yet many central banks have cut rates to near zero, only to find people are still borrowing too little. As cash pours into safe assets like government bonds, demand slackens and economies stagnate.  [The Economist, Sep 4, 16]  In the limit, economics sinks to everyone taking in each others laundry. Don't look to political candidates to offer credible economic vigor when the voters demand action platitudes.

unmanaged globalization is undermining democracy. Democratic politics remain tethered to nation-states, while institutions that make the rules for global markets are either weak or seem too distant, especially to middle- and lower-class voters.   Globalization has deepened the economic and cultural divisions between those who can take advantage of the global economy and those who don’t have the resources and skills to do so. Nativist politicians like Donald J. Trump have channeled the resulting discontent as hostility to outsiders: Mexican or Polish immigrants, Chinese exporters, minorities. We need to rescue globalization not just from populists, but also from its cheerleaders.   [Dani Rodrick (economist), New York Times, Sep 17, 16]  Trump wants isolation walls, Clinton wants adaptation to reality. The saving grace:  USA is the world's quickest national adapter.

Some 62% of white working class Americans said the federal government bears all or most of the blame for the economic troubles facing the working class. Yet, two-thirds also feel that the federal government doesn't do enough to help working class folks. Working class whites with lower incomes are more than twice as likely as their higher-earning peers to want more government assistance.   [Tami Luhby, CNN Money, Sep 21]  They complain that government does [too much / too little] as they vote for Republicans that try to shrink the government to protect private wealth. Unfortunately, neither they nor elected politicians seem to understand basic economics.   The politicians have to pretend ignorance of economics to get elected to represent them in government, a vicious cycle as they blame "Washington" for whatever they think wrong with the economy. They overlook the basic fact that "Washington" is the collection of 535 elected representatives - not a single one from Washington DC - and one elected president. If "Washington" is failing them, they should look in the mirror for the solution.  Ah well, at least democracy is better than any alternative.

On-or-off small biz tax.  A few hours after Trump publicly backed away from a $1 trillion tax cut for small businesses, campaign aides privately assured a leading small-business group that Mr. Trump in fact remained committed to the proposal — winning the group’s endorsement.  The campaign then told the Tax Foundation, a conservative-leaning Washington think tank it asked to price the plan, that Mr. Trump had indeed decided to eliminate the tax cut.  Call it the trillion-dollar lie: Both assertions cannot be true. [Binyamin Appelbaum, New York Times, Sep 16, 16] Not to worry: each side will see what it wants to see in the candidates. Cognitive dissonance. Besides, he's likely to change his mind and his line of tangled argument several times before the election.

Same old song. Trump outlined his vision for managing the nation's economy, promising that his plans to lower taxes by $4.4 trillion over a decade and cut regulations would lead to booming growth, create millions of jobs and even cut into the nation's budget deficit. [Jill Colvin, AP, Sep 15, 16] Where have we heard that song before?  Every Republican candidate for almost anything. But despite repeated doses of tax cuts over the last three decades, we hear that we need more of the same medicine now. Trickle down economics just would not reach the under-employed white males he relies on to power his election, and then be abandoned when his medicine does nothing to cure the under-employment problem. In principle, the tax cuts free wealth for investment, but there is already a worldwide surplus of investable wealth sitting on its low interest government bonds. Watch the big pharma companies paying enormous premiums for new formulations from smart educated newcomers.   But the industries that are denying employment to the Trump's under-educated minions are in worldwide over-capacity and buying machines to replace humans that demand expensive benefits.

 [David] Fahrenthold [Washington Post] and his colleagues have spent more than six months contacting hundreds of charities that Trump claims to have given money to through his family charity, the Donald J. Trump Foundation. ... “Between 2008 and this May—when Trump made good on a pledge to give $1 million to a veterans’ group—its search has identified just one personal gift from Trump’s own pocket.”   ...  many of the donations that Trump claimed to have made turned out to be gifts in kind from his businesses, such as free rounds of golf for charity auctions.  [John Cassidy, New Yorker,  Sep 14, 16] Does absence of evidence make evidence of absence?  Not good enough for a court of law, but good enough for character evidence in politics.

Stimulus bulls over deficit bears. Fiscal policy across the developed world is collectively turning more stimulative for the first time since the end of the recession. This may be the most underappreciated economic development of the year. While the scale of the stimulus is modest in dollar terms, it signals a more profound shift in the political winds. Globally, the rise of political populism has pushed deficits down the list of priorities while elevating tax cuts and benefits for the working class. [Greg Ip, Wall Street Journal, Sep 14, 16] Voters want jobs more than fiscal rectitude, and see government debt as a vague future question. The last time the USG had a surplus, the presidential candidate promised to return the people's money to them rather than pay down the debt. He won, and kept his promise. His VP opined that "Reagan proved deficits don't matter."  Seven years later the economy suffered an economic dive and stimulus rolled again.

 The flexible model.  Democracy's Muse: How Thomas Jefferson Became an fdr Liberal, a Reagan Republican, and a Tea Party Fanatic, All the While Being Dead   By Andrew Burstein.  New Deal Democrats and Cold War liberals from the 1940s to 1960s transformed the Virginia planter into an internationalist advocate of human rights and anticommunism, until the rise of a new conservative movement countered by turning Jefferson into a champion of individualism and heroic small farmers (née business entrepreneurs). Ronald Reagan's embrace of Jefferson as a paragon of traditional “American values” was itself a subtle rejection of 1960s and 1970s critics who focused on Jefferson's slaveholding and hypocritical statements on race and sex. ...  Tea Party Republicans and evangelical defenders insist their Jefferson is the unadulterated (and infallible) true version, which is, of course, a signal that the cycle of the Jefferson image is beginning all over again.  [Robert Parkinson, J American History, March 2016]  Which Jefferson clothes will you wear this electoral season?

More government candidate now.  Having won nomination by condemning Democratic government, candidate now competing for handing out new government programs.  Trump proposed new assistance for families, including tax deductions, rebates for lower-income households and tax-preferred savings accounts, as well as a promise of paid maternity leave for workers who don’t now have it. [Wall Street Journal, Sep 13] And, of course, the big beneficiaries will be the upper taxpayers who itemize deductions. His base of angry underemployed white males will get almost nothing.

Trump is saying that Boeing will move American jobs to China. Boeing CEO Ray Conner [says] emphatically this is not true. The claim has also been dismissed by experts. ... Conner said, “Trump has made an issue about our involvement with the Chinese assembly center, saying we’ll move all these jobs to China.” But it’s not true. The Chinese center is “our largest opportunity for sales, creating an expanded relationship, but it will also create more jobs here. It’s lopsided on what we get and give — we get more. It’s being portrayed as the opposite.”  [Jon Talton, Seattle Times, Sep 13, 16] Trump makes a lot of sweeping statements with hidden assumptions which unfortunately works with a lot of people pre-disposed to believe such stories. One assumption is that China and other trade partners would not retaliate on US trade restrictions in complete contradiction to world history since trade began. Those kind of wars have a way of getting out of control and biting the initiator.

Neville Chamberlain Trump: “This morning I had another talk with the German chancellor, Herr Hitler, and here is the paper which bears his name upon it as well as mine. . . . I believe it is peace for our time.” [1938] “I think I’d be able to get along with him. . . . If he says great things about me, I’m gonna say great things about him. I’ve already said he is really very much of a leader.”  [2016]  In both years, the dealer was ready to sacrifice smaller nations for peace with the big opponent; in 1938 Czechoslovakia, and in 2016 the Baltic states. [David Ignatius, Washington Post, Sep 13, 16]

Where does Donald Trump stand on small businesses? “Who knows?” ....  fewer than 8% of small companies would save on taxes  ...  Trump said, “You cannot ever start a small business under the tremendous regulatory burden ” Trump is just plain off the wall here. More than 1 million businesses get started every year.  ...  Trump’s plan on estate taxes is basically a “save billionaire’s rich kids some money” plan.  .... Making America a less inviting place for immigrants will negatively affect overall economic growth and job creation, certainly bad for small companies.  ...  Small exporters are likely to be hit, as other countries retaliate [in trade wars]  .... Trump has left a trail of mistreated small-business vendors who’ve done business with his company. [Rhonda Abrams, USA Today, Sep 9, 16]      

When I began reporting on the state legislature, a wily old state senator offered to acquaint me with how the place worked. We stood at the back of the Senate floor as he pointed to his colleagues spread out around the chamber—playing cards, napping, nipping, winking at pretty young visitors in the gallery—and he said to me, “If you think these guys are bad, you should see the people who sent them there.  [Bill Moyers, The Nation, Sep 9, 16] To discover what's wrong with our politicians, look in the mirror.

The grand economic pie-in-the-sky: Trump’s senior economic adviser, Stephen Moore, said the candidate planned to pay for his costly proposals by eliminating the departments of Commerce, Energy and Education; lifting all restrictions on mining, drilling and fracking; ending Temporary Assistance for Needy Families programs, and offering rust-belt factory workers new jobs on oil rigs and steel mills. [Christina Wilkie, Huffington Post, Sep 7, 16] Just try pushing that elephant down the Congressional esophagus.

The CIA and other U.S. intelligence agencies process a lot of data, more numbers than anyone but an expert can easily decipher.  startup Zoomdata (Reston, VA;  no SBIR) and its data visualization tools will now be there for help, via an investment of unknown size by In-Q-Tel, the venture capitalist facet of the country's intelligence community. ...  Zoomdata is built around the idea of making everyone a big data expert by using software that can combine real-time and historical data streams to turn raw numbers into images useful even to non-mathematicians.  [, Sep 8,16]

 American leaders worried that their imperial neighbors—French, Spanish, and especially British—would exploit the new nation’s internal tensions to break up the tenuous union of the states. Poorly educated voters might also elect reckless demagogues who would appeal to class resentments and promote the violent redistribution of wealth. In such a nightmare scenario, a military despot—an American Caesar—ultimately would seize power and restore order at the expense of free government.  [Alan Taylor, American Scholar, Sep 6, 16]  A demagogue promises everything and delivers nothing useful.

Trump said that the cost of his [defense] plan could be offset by, among other things, targeting tax cheats, eliminating waste in the federal government and reducing Pentagon bureaucracy.  [Colleen McCain Nelson, Wall Street Journal, Sep 7, 16]   Waste, fraud, and abuse rides again to the rescue of a half-baked Republican candidate. All myth.  Waste is any program that benefits somebody else, and has no independent determinant.  Targeting tax cheats requires more IRS investigative assets, which Republicans want to shrink to protect high rollers like Trump.

Bigger glass half empty?  Pessimism has political consequences. Voters who think things were better in the past are more likely to demand that governments turn back the clock. A whopping 81% of Donald Trump’s supporters think life has grown worse in the past 50 years. [at least partly because] Male blue-collar workers in rich countries have seen their earnings stagnate.  ....  This book is a blast of good sense. The main reason why things tend to get better is that knowledge is cumulative and easily shared.    [The Economist reviewing Progress: Ten Reasons to Look Forward to the Future. By Johan Norberg,  Sep 4]   In politics, the losers today know who they are, but the future winners are yet to emerge.

 DOD continues to push rapid innovation in select areas, including robotics (especially for drone warfare) and human enhancement (for example, to improve the battlefield performance of soldiers). But through a combination of several factors — including excessive bureaucratic growth, interference from Congress, and long-term commitments to hugely expensive and troubled weapons systems with little civilian spillover potential, such as missile defense and the F-35 joint strike fighter — the Pentagon’s creativity and productivity as an innovator has significantly dissipated.  [Daniel Sarewitz, New Atlantis, Spring 2016]

With milk prices down 40 percent since 2014, Congress will be under pressure to aid dairy producers when lawmakers return from their summer break next week. It promises to spark a debate over how far the government should go to prop up an industry plagued with oversupply.  [Rob Hotakainen,, Sep 2, 16]  Note: SBIR subsidy of uncompetitive tech companies is also on the table again. SBIR should be limited to companies that have not yet shown that they cannot compete on their own.  There's no compelling reason to use SBIR to fund ordinary government R&D. in companies that cannot turn the results into job creation in open competition.

Got a great idea for a public program?  There are lessons [from Obamacare] for people who think about policy making. First designing technocratic systems that will actually work is really hard. Second, designing effective technocratic systems that can pass politically is really, really hard. Third, designing politically plausible technocratic systems in a country divided on fundamental philosophy is hardness on stilts. [David Brooks, New York Times, Sep 6]

Army Secretary announced a new Rapid Capabilities Office to accelerate the development of cyber, electronic warfare, and position-and-timing gear.  ... For example, Russian-backed separatists have used EW and GPS-spoofing to jam and misdirect the drones that Ukrainian troops use to scope out enemy positions.  ... Service officials stressed that the new office is distinct from the Rapid Equipping Force, which sends warfighters materiel . ...   “The goal  is not to procure systems to outfit the entire Army, but rather to use targeted investments to execute strategic prototyping, concept evaluation and limited equipping — especially in areas where technology progresses rapidly.  [Patrick Tucker,, Sep 1, 16]  Many happy Army words about their wishes but nothing about private entity participation. For more information about the Army Rapid Capabilities Office, contact Lt. Col. Jesse Stalder at, or 703-693-5084

Techs prefer solidity. Hillary Clinton is the favored candidate for president among 10 of the biggest local tech execs who made any political donations over the past 31 months, according to a survey of campaign finance records. [Sara Castellanos, Boston Business Journal, Aug 31, 16]

Too much of a good thing. The birthplace of Hewlett Packard and Xerox Parc and founding place of Facebook is now considering whether to enforce a zoning regulation banning firms whose “primary business is research and development, including software coding,” according to the New York Times. ... The city’s reluctance to build more housing has led to criticisms that the city is being irresponsible, wanting tech jobs, and the tax money that comes with it, without expanding housing. [Michelle Quinn, San Jose Mercury News,  August 31, 2016]  Cities all over the world would die to get such a problem.

One hand washes the other, well.  Nearly half of In-Q-Tel’s trustees have a financial connection of one kind or another with a company In-Q-Tel has funded, a Wall Street Journal examination of its investments found.  ...  In-Q-Tel uses [CIA] public money, to which strict conflict-of-interest rules apply—at least $120 million a year, say people familiar with the firm’s financials.  ... Each dollar In-Q-Tel invests in a small business typically is matched by $15 from elsewhere, the firm has found.  [Damian Paletta, Wall Streeet Journal, Aug 30, 16]  DOD SBIR could take a few lesson from CIA-In-Q-Tel on investing in companies and technologies that attract serious money to the technology development. One bramch of DOD actually acted that way a long time ago, but even its successful philosophy was canceled by a shift to safe predictable R&D under government control.

Getting a Web connection in the rural U.S. is tough, yet Hillary Clinton has been proposing a future in which every home in the U.S. is connected to broadband by 2020. Experts aren’t convinced. They suggest that the price tag of such a project—combined with uncertainly over which part of government would execute the plan, and whether or not Republicans would even back the required legislation—make it an unlikely proposition.  [MIT Tech Review, Aug 28, 16] There's no one around who remembers Rural Electrification to put electricity and telephone to remote farms, one of those public goods for which there is no market return for private investment.  That's one thing where government shines, especially for small population states with two Senators each, the great compromise that keeps the nation from being controlled by California, New York, and Texas.

Immigrant entrepreneurs welcome. U.S. Citizenship and Immigration Services (USCIS) is proposing a new rule, which would allow some international entrepreneurs to stay in the U.S. to start and scale their companies.   The rule would consider entrepreneurs on a case-by-case basis, provided that they have started a company in the U.S. in the last three years and received either $345K from "certain qualified U.S. investors with established records of successful investments," or $100K in qualifying government grants.  [Ryan Ferguson, DCInnoBeat, Aug 26, 16]  Don't we have enough small US companies getting closed competition government grants, some over and over, that do not welcome competition for the handouts to aliens? Why not just open SBIR to such companies? 

Warriors keep their war. Marijuana will remain a Schedule I drug, the most tightly regulated class of drugs in the United States, the Drug Enforcement Administration announced. .... keeps marijuana in the same class as heroin and LSD, frustrates researchers wishing to study its potential to treat conditions from chronic pain to brain tumors to childhood epilepsy. By ruling that there is not enough evidence of “currently accepted medical use”  [Science, Aug 19]  There's no interest like a vested interest.

DOD changed its label for its call for SBIR proposals from solicitation to announcement for some arcane legal reasons that do not affect how the SBIR competition will be run. [a note from SBIR Insider Rick Shindell]  DOD's newest announcement will open tomorrow for a time when you can see the topics and ask the topic contacts any questions.  Remember there a lot of questions that they will not answer to keep the competition fair to all.

'We have fallen upon evil times, politics is corrupt and the social fabric is fraying.' Who said that?  Everything is awful, so bring on the scapegoats and the knights on white horses.  ....   It wasn't Trump. A century ago, an American professor found them inscribed on a stone in a museum in Constantinople. He dated them from ancient Chaldea, 3,800 BC.   [Johan Norberg, CATO Institute, Aug 19, 16]

It’s painful to hear Hillary Clinton and Donald Trump promising voters that they’ll bring back the past.  ... Both nominees are explaining how they’ll bring back manufacturing jobs. ...  They won’t come back because the world has changed. Manufacturing jobs were about 40% of U.S. employment in 1940; today they’re less than 10%, but we manufacture far more now.    ....  The larger point for all leaders is that the world never stops changing, and the leader’s job is to embrace the new reality, explaining how it can bring a better future, not a worse one.  [Geoff Colvin, Fortune, Aug 22, 16]   Unhappily, we encourage politicians to appeal to myths.  Vote for realistic approaches to the real world.  The societal challenge is enabling meaningful lives for the multitudes that will not be needed to create stuff. 

Small biz says "whoa."   a professor at the University of Baltimore School of Law and former member of the federal Commission on Wartime Contracting in Iraq and Afghanistan — wrote a legal opinion calling the proposed [regulatory] changes “blatant and undeniably illegal.” “The proposed regulations would reduce the breadth of small business contracting by up to 80 percent or even 90 percent in lines of business where small business contracting is currently common,” he wrote. ...   The proposed new rule requires agencies to write a report when they choose not to buy supplies or services through existing government contracts. ...  the government says the changes are needed to implement a statute that requires documenting when an agency determines not to use an FSSI contract.   [Lydia Wheeler,, Aug 17]

 One thing that the U.S. economy excels at is creating jobs. You might doubt this listening to Donald Trump and Hillary Clinton, who promise personally to create millions of high-paying jobs. This is misleading. The overwhelming share of jobs are created by the private market, not government or politicians.  [Robert Samuelson, WashPo, Aug 18] One plus government brings to employment is boosting private business by spending more than it takes in. Spending is bad except when it's good.  We resist any notion of national debt reduction because we like what it does for us in the present.  George W was the classic example when he advocated tax cuts in 2000 to reduce government income that was running a temporary surplus. We loved it and gave him a second term.

China is a sort of technological Galapagos island, a distinct and isolated environment in which local firms flourish. Chinese firms are protected from external competition by government regulation and the Great Firewall. And that protection means that they need not innovate but can thrive by copying business models developed in the West. In short, China is closed, its firms are cosseted and their talent is for mimicry. [The Economist, Aug 6, 16]

Who needs generals when the Congress is on the case?  A new report from a House task force, formed by Republicans to investigate allegations that the U.S. Central Command had manipulated Islamic State-related intelligence in 2014 and 2015, determined that military officials presented an overly positive spin on the progress of the U.S. fight against the Islamic State. ...   As FP’s Molly O’Toole reports , the findings fell short of explicitly charging the Obama administration with lying about progress against the terror group, but it gives Republican presidential nominee Donald Trump a new line of attack against his Democratic counterpart.    [Foreign Policy sitrep, Aug 12, 16] How it is supposed to work: field agents and analysts collect and analyze various intel from various sources.  They send their report up the line, and at each level the commander integrates that intel with the strategic situation. In its time it goes to the President and the Pentagon. Now some of the field people complain that the commanders are downplaying (manipulating in the words of the President's opposition party in Congress) their analyses. So, a Congressional committee convenes a probably biased jury and declares the intel manipulated by optimistic generals in the early stages of the ISIS attacks. In the election season, of course. A solution: send a Congresscritter or two to oversee things on the ground in the fog of war and politics.  

A rule of public life: never pick a fight with anyone who buys ink by the barrel. Trump imagines that the media would / should cover his sayings / rantings in a way that makes him look good.  But, to his chagrin, the media cover what sells newspapers, which drives him to pick the hopeless fight.

The Trump dream tax scheme [on the standard Republican tax Forbes, Romney, etc glide plan] aims to encourage firms to create new jobs in the United States by offering a 10 percent tax rate on the repatriation of funds that are currently parked overseas.  But we tried a similar policy in the Bush (43) Administration and it had no effect on jobs or investments.  Nor should it be expected to today – corporations are already sitting on lots of cash reserves in the U.S., and they are not investing more.   [William G. Gale, Hilary Gelfond, and Aaron Krupkin, Brookings, August 10, 2016]  

China's emergence as a trade powerhouse rattled the American economy more violently than economists and policy makers anticipated at the time or realized for years later. The U.S. workforce adapted more slowly than expected.   What happened with Chinese imports is an example of how much of the conventional wisdom about economics that held sway in the late 1990s, including the role of trade, technology and central banking, has since slowly unraveled.  [Bob Davis  and Jon Hilsenrath, Wall Street Journal, Aug 11, 16]  The outer world changed, but American political argument stayed the same. No candidate has a credible response because the electorate resists new thinking within the bounds of economic reality.  Political parties win and lose power as voters oscillate in search of a solution.  This election cycle repeats the promises of the last several cycles but neither party has an answer that hasn't already been tried. Where do we go and how do we adapt to real world conditions?  The good news is that America is probably the best and fastest world adapter despite our pontificating politicians.  We lower our expectations for economic growth and plug away at creating value while avoiding politicians with glorious promises.

DIY history.  Donald Trump is now accusing President Barack Obama of founding the Islamic State group that is wreaking havoc from the Middle East to European cities.  [AP, Aug 10, 16] Whereas scientists and engineers have to support their theories with provable facts; politicians feel free to select a few facts from the bottomless pile of facts, and create their own history for their megaphones.  In the Middle East, every history has so many founders and contributors that it is grossly simplistic to name any one source.  But, ah, well, there are enough Americans ready to accept whatever their emotional choice for politician invents that encourages politicians to engage in DIY history.

chant bright songs  Private investment is withering in China. Companies are shying away from risking their capital, discouraged by a cloudy global outlook and four years of slowing growth, intermittent deflation and conflicting policy messages.  ...  In a bid to reverse the trend, Beijing has stepped up efforts to slash red tape and reduce barriers for entrepreneurs and urged local officials to “chant bright songs about the China economy loudly” to boost confidence, according to one circular.  [Mark Magnier, Wall Street Journal, Aug 9, 16]

A West Virginia nonprofit that runs the state’s High Technology Foundation, a rural, 375-acre research and development park, has filed for bankruptcy after failing to repay $19 million in debt.  [Wall Street Journal, Aug 9]

Trump the economic Sorcerer waved his magic wand and called for .... the well-rehearsed thirty-year old Republican tax cuts ....  to revitalize the US economy. [As in: feed the rich and starve the goverment.] As he proclaimed, "It won't even be that hard," if he actually has a magic wand.  Of course neither he nor any other Republican can make tax cuts that don't run up the national debt by lowering government revenue, as demonstrated by the same tax cuts recently in Kansas.  As for whether it would revitalize the economy to his high standard, he should first explain why all the previous tax cuts over thirty years have left us where we need his magic.  Perhaps his economic advisory collection of high financiers will explain basic economics, with real numbers, to him.

Financiers as economics experts.  The candidate's national economic advisory team includes a hedge fund billionaire who made his fortune betting against subprime mortgages as the American economy headed toward collapse in 2007, a real estate investor and close friend who has been raising money for a super PAC supporting the billionaire candidate, a New York investor who is [the candidate's] national finance chairman, the candidate's national policy director, and a former staffer on the Senate Budget Committee.  [Reuters, Aug 5, 16]  A strange collection for a populist campaign against the financial establishment.

Mayhem wins. A software program dubbed "Mayhem" was poised to win the final round of a $55M three-year contest, DARPA's Cyber Grand Challenge, to teach computers to launch and defend against cyber attacks ...  earning a $2 million prize for the team that wrote the winning code, eight computer experts from San Francisco and Pittsburgh affiliated with Carnegie Mellon University.  .... dubbed the first "capture the flag" hacking contest played solely by computers. ...  Agency officials said it succeeded in its goal of stimulating development of technologies for automating the process of protecting computer networks against cyber attacks.  ....  Mayhem will compete against Carnegie Mellon students and other elite hackers when this year's Def Con contest starts Friday. It is the first time a computer has competed.    ....   Second place went to the University of Virginia and GrammaTech Inc, earning $1 million.  Third place to the University of California earning  $750,000.   [Jim Kinkle, Reuters, Aug 5, 16]  Where will AI software like Mayhem and IBM's Watson lead, and how ill humans keep it under societal control?

There are significantly fewer SBIRs  being  awarded  and  that  there  are  also  significantly  fewer  SBCs  participating  in  the  SBIR/STTR  program  now  based  on  the  dwindling  number  of  awards.   For instance, the total number of SBIR awards dropped by 30% overall and by 42% at DoD; and the number of firms  participating  in  the  DoD  SBIR  program  decreased  by  52%  in   the  last  five years  (since  the  last  SBIR  reauthorization  which  prompted  the  commercialization  benchmarks  was being drafted). There are also significantly fewer seed stage financings making it harder to find funding for commercialization. [Jere Glover, Small Biz Technology Council, Jul 6, 16]  Glover's concern is direct government contracts to small biz, without regard to whether that makes good government policy. He presents no compelling evidence that the subsidy to his political group is more efficient at any useful national goal than allowing the federal agencies to choose their own distribution of direct contracts. The only winners are the companies that would have been uncompetitive in open competition for federal R&D.  What's needed, of course, is the most efficient policy, for which SBIR has not proven itself.   However, SBIR will remain, and if you are a small tech biz with a tech advantage over your competition, and a hankering for free federal money, dive in.  Lots of mediocre companies are getting some.

Claim: American health care is an utter disaster, both the government sector, and the massively regulated private sector.  Counter-claim: Utter disaster compared to what? I don’t believe this is true. At least 50% of the real innovations I use in my daily work as a physician have been developed in the US, maybe it’s even around 80%. [blog exchange on, Aug 1, 16]  Note: sweeping political generalizations rarely withstand facts from knowledgeable sources.  That many people believe the claims anyway is a measure of gullability, and encouragement for politicians to keep doing it.

A Russian intelligence agency has declared that it’s now able to collect cryptographic keys from Internet companies that use encryption. Last month, Vladimir Putin signed anti-terrorist legislation that ordered the Federal Security Service—the successor to the KGB— to find a means of producing encryption keys capable of decrypting all data on the Internet. With a deadline of just two weeks. The ambitious request is apparently fulfilled, with Internet companies now permitted by law to hand over keys to Russian officials, or else face $15,000 fines.  [MIT Tech Review, Aug 2, 16]  Believe Russian pronouncements of success with no free press to question government?

The Obama administration recently announced the Advanced Wireless Research Initiative, a group backed by $400 million in investment that will work on research aimed to “maintain U.S. leadership and win the next generation of mobile technology,” and specifically develop wireless networking tech that will offer speeds 100 times faster than the 4G and LTE networks that are being used today.  [SSTI, Jul 27, 16] That's a ton of pie to be shared. It's an even bigger share job if it must all go to "research," and not into system building.  By law, NSF has to divert 3% of its outside funding into SBIR, although not necessarily equally from all programs.  Since lots of SBIR-qualified companies could meet NSF criteria, sharpen your pencils and ideas.  Whether any of the 3% ever make anything of the research depends on how NSF manages its competition to fund higher potential entrepreneurs instead of the usual collection of "scientific and technical merit" crowd beloved by the NSF review panels.

What works for states? Mr. Trump and House Speaker Paul Ryan are united by the conviction that cutting taxes — especially on corporations and the wealthy — is what drives growth.   A look at the states, however, suggests that they’re wrong. Red states dominated by Republicans embrace cut and extract. Blue states dominated by Democrats do much more to maintain their investments in education, infrastructure, urban quality of life and human services — investments typically financed through more progressive state and local taxes. And despite what you may have heard, blue states are generally doing better.  ....  red states still receive much more in federal spending relative to the federal taxes their residents pay. In other words, blue states are generally outperforming red states even while heavily subsidizing them.     ... An important reason is that modern knowledge economies increase the rewards for education, research and development and urban hubs that promote the exchange of ideas and development of talent.       [Jacob Hacker and Paul Pierson, New York Times, Jul 30, 16]

Visions? It is often said that Helmut Schmidt lacked vision—particularly in comparison with his predecessor, Willy Brandt, West Germany’s version of JFK. It was an image that Schmidt, who died last year at 96, himself did much to create—above all, through his quip that “those who have visions should go see a doctor.”   [Hans Kundnani reviewing Kristina Spohr's The Global Chancellor,  Wall Street Journal, Oct 30, 16]

If Hillary Clinton or Donald Trump don’t deliver stronger growth than Obama, they will be gone in four years. [Wall Street Journal editorial, Jul 28, 16]  The agents of economic growth want to shift responsibility for economic growth to the government while advocating for less government.  But the idea that the Executive Branch controls the economy is a complete illusion.

Reality hurts in a way that free-market politics cannot fix.  The anger driving this election cycle comes from voters in financial distress. The media is misinformed when they state that only blue-collar workers and uneducated people supported the anti-establishment candidates Bernie Sanders and Donald Trump. People in the middle class, who are being pushed into poverty, also supported them. [unemployed well-credentialed teacher in South Carolina, invited and quoted by Robert Samuelson, Washington Post, Jul 28, 16]  We demand that our politicians promise solutions that they cannot deliver. We have technically succeeded at reaching a stage of efficiency that generates profits with fewer and fewer workers, a free-market success, while population continues to grow and a whole generation reaches retirement age and demands their due from the retirement trust funds. Who then will hire permanent employees with good wages and benefits?  We have the basic problem of a revolution of rising expectations with no way to generate the wealth to pay for the expectations.  So, we hear the siren call of magic promises of filling those expectations from political candidates who cannot justify their claims. It's nineteenth century snake oil revived.

By nominating Mr. Trump, Republican primary voters have abruptly left behind the party that believes in Ronald Reagan’s gospel that “government is not the solution to our problem; government is the problem.” It is now firmly in the camp that believes that when it comes to certain issues, “only government can do this” or, in Mr. Trump’s phrase, “I alone can fix it.”  [Noam Cohen, New York Times, Jul 26, 16]

The urge to gamble.  [IN Gov] Pence introduced several new policy proposals, as well as an executive order, meant to foster entrepreneurship. The initiatives range from investing state pension money in fast-growing "early-stage and midmarket Indiana companies" to making venture capital tax credits transferable.   [James Briggs, Indianapolis Star, Jul 14, 16]  Pension plans all over are being decimated by low investment returns, and reach for higher returns through higher risk. For term-limited governors, it makes good headlines now with no responsibility for the results. Legislatures and voters should be aware that fast-growth can only be measured in the relatively short time that the fast growth has happened. And that trees do not grow to the sky.

Purge government. If he wins the presidency, Republican presidential nominee Donald Trump would seek to purge the federal government of officials appointed by Democratic President Barack Obama [all such political appointees would have already resigned] and could ask Congress to pass legislation making it easier to fire public workers, [taking us back to the 19C spoils system of "jobs for the boys"] Trump ally, Chris Christie, said on Tuesday.  [Emily Flitter, Reuters, Jul 20]   The jobs where the holder serves at the pleasure of the president are of two kinds. The top jobs appointees must be confirmed by the Senate; the next few layers are political appointments with no requirements for particular competence but not confirmed by the Senate. The rest of the government is staffed by people with expertise in the requirements of the job, and any firing must be by due process, not merely the displeasure of the President.

In a twist on a Middle Ages story of King Cnut showing that he could not hold back the tide, GOP delegates approved a party platform that disavows aggressive action on climate change and downplays renewable energy, also calls for an end to U.S. involvement with the United Nations on climate issues. [Evan Lehmann, Scientific American, Jul 19] The Republicans say they can hold back the tide by denying that it even exists. At least Cnut had undeniable evidence that the tide existed.

Usual political shenanigans as Republicans revive Richard Nixon with "law and order" code for its base of convincing lightly educated workers displaced by technology and global competition that the cuplrits are racial reverse discrimination and immigrants. Tactically it makes sense for a complete government novice, but strategically it would fail because the claimed solutions would probably make the problem worse. The decision is up to the voters.

Indiana Governor Mike Pence unveiled plans to invest $1 billion in Hoosier innovation and entrepreneurship over 10 years, in what he calls a “third century” strategy for growth.  ....  Since Pence took office in 2012, the Indiana Economic Development Corp. has worked with 446 companies on expansions or relocations expected to result in almost $7 billion in capital projects and more than 37,000 jobs.  ...  “New businesses are not starting in the Hoosier state as often as we want them to,” Pence said, citing Kauffman Foundation rankings that listed Indiana 44th among its peers for startup activity.    [Andrea Muirragui Davis,, Jul 15, 16]  Maybe direct government subsidies aren't the magic formula state economic growth from new businesses. Perhaps more indirect ideas, that politicians cannot use for grand pronouncements in election years, like educated workers, honest politics, non-bigotry laws on social questions, and hands-off religion by governors and legislatures. 

Michigan startup first aid.  [Michigan’s six largest research universities']  Small Company Innovation Program/Technology & Commercialization Assistance, is now accepting applications where the most promising companies can receive up to $40,000 from the university group, as long as they come up with matching funds.  ... about 20 companies will be accepted  []

NSF announced approximately $10 million in new funding through its Partnerships for Innovation (PFI) program. The PFI program offers NSF-funded researchers at institutions of higher education opportunities to connect new knowledge to societal benefit through translational research efforts and/or partnerships that encourage, enhance, and accelerate innovation and entrepreneurship.   [SSTI, Jul 13, 16] You can take the professor out of the lab, but you cannot take the lab out of the professor. A tenured faculty position is not to be readily surrendered for the purple of commerce. Government science agencies like NSF fund the advancement knowledge, not commerce, by using other professors to judge which proposals have the most merit.  And such government programs are political creatures that spread the money like butter on toast, not enough on any to build a salable sandwich.

Tech execs blast Trump.  We are inventors, entrepreneurs, engineers, investors, researchers, and business leaders working in the technology sector. We are proud that American innovation is the envy of the world, a source of widely-shared prosperity, and a hallmark of our global leadership.       We believe in an inclusive country that fosters opportunity, creativity and a level playing field. Donald Trump does not. He campaigns on anger, bigotry, fear of new ideas and new people, and a fundamental belief that America is weak and in decline. Trump would be a disaster for innovation. His vision stands against the open exchange of ideas, free movement of people, and productive engagement with the outside world that is critical to our economy — and that provide the foundation for innovation and growth.    [, Jul 15, 16] Well known of the 150 signatories: Vint Cerf, Barry Diller, Steve Wozniak, Vinod Khosla, Irwin Jacobs.   NewCo Shift says it is a new business media property that explores the stories shaping the world’s most innovative companies through experiential festivals and media offerings.

Discontent:  Many [citizens] today are individualistic, empowered and keen to shape society around them. Through social media, they are changing the intellectual landscape. They are investing in new experiences of all kinds. But discontent over corruption, inequality, tainted food and a foul environment is sharp and deep; many worry that their hard-fought gains are ill-protected. [The Economist, Jul 9, 16]  Where?  How should they fix it? Answer: China; press for true self-governance.  It's even happening. China’s Communist Party has shown extraordinary resilience to destabilising forces and an impressive ability to recreate itself. It has ditched most of its founding principles and tied itself to the middle-class wealth-creators, expanding its membership to include the very group it once suppressed. [The Economist]

Nearly 150 tech executives including Apple Inc. co-founder Steve Wozniak, Twitter Inc. co-founder Evan Williams and eBay Inc. founder Pierre Omidyar published an open letter to Donald Trump laying out why they don’t support the presumptive Republican nominee, who they say would be a “disaster for innovation.”  “We believe in an inclusive country that fosters opportunity, creativity and a level playing field. Donald Trump does not,” the letter, published on Medium, says.    [Wall Street Journal, Jul 14]

Ever innovative DARPA released details of a contest that will put that idea to the test at the annual DEF CON hacking conference in Las Vegas next month. Seven teams from academia and industry will pit high-powered computers provided by the agency against one another. Each team’s system must run a suite of software developed by DARPA for the event. Contestants win points by looking for and triggering bugs in software run by competitors while defending their own software.  [Tom Simonite,, Jul 13, 16]

The ratio of startups in the U.S. has been cut in half since the late 1970s. One in six companies were startups in 1970; one in 12 is a startup today. Furthermore, 20% of the workforce was employed by younger small and medium enterprises in the early 1980s according to economist John Haltiwanger. Today fewer than 10% are.   [GLENN HUBBARD and TIM KANE, Investors Biz Daily, Jul 11, 16]  Unsurprisingly, Republican economist Hubbard finds government is the problem with its laws and regulations.  Restoring dynamism means restoring entrepreneurs' ability to explore opportunity, a focus that should shift policy toward structural impediments such as fundamental tax reform [code for cut my taxes] that will increase workforce participation and investment. In contrast, more populist protectionism will choke dynamism and diminish economic expectations. OK, if you believe the myth that lower taxes will solve almost any economic problem. And typically, those regulations insist that the producer pay the true costs of its production instead of dumping the cost [externalities] on the public.

Useful tech diffuses quickly.  according to the Pentagon, Islamic State fighters are using commercial drones armed with improvised explosives devices or spy cameras. As Bloomberg’s Anthony Capaccio reports, “The threat led the Defense Department office charged with monitoring and countering improvised explosive devices to ask that Congress approve shifting $20 million to provide seed money for a counter-drone effort.”  [Foreign Policy sitrep, Jul 8, 16]  Develop it, use it, and expect to soon face it. 

 Across a variety of industries, in services and manufacturing, Chinese labour productivity is still just 15-30% of the OECD average despite those two decades of improvement. ...  Productivity lags behind badly at firms across the economy. ...  Letting failing firms go bust would be the most powerful reform of all. At the moment, no big company, public or private, can go bankrupt in China.   [The Economist, Jun 25, 16] Easier said than done in a sheltered economy.

Columbus [OH] is the highest-scoring market of its size for attracting and producing technology workers, according to a report from real estate firm CBRE Group Inc.   The city was helped especially by having the second-lowest cost of living among 50 markets studied.   [Carrie Ghose, Columbus Business First, Jul 6, 16]

Bullard says, it takes a while for technologies to "diffuse through the economy." And some of the diffusion -- in leisure, in richer living experiences (social media; smartphones and their apps) -- are not captured in GDP statistics. Perhaps that helps to explain why Obama's job approval has reached 52% at a moment when she who seeks to replace him concedes that the economy is so anemic that her husband will be assigned to "revitalize" it.  [George Will (former Republican), Investor's Biz Daily, Jul 9, 16]  The ugly facts are that POTUS has few levers to improve growth (at any reasonable price) and that even 2% growth is above the long term average. Don't believe any candidate's promises on growth; they are all just wishful thinkers. People who lived throught the prosperous post-WW II era had a great ride that cannot continue such speed, and as they retire they will find the rest of the country less willing to support current their dreamed of prosperous life style.

Companies approved for the tax incentive program created by Gov. Andrew Cuomo to attract companies to New York hired 332 employees in 2015.  That's according to a report on the program posted on the website for the state's economic development arm late Friday. The program exempts accepted companies from most state taxes. Employees hired after companies are approved are also exempt from state income tax.   ...  Cuomo's administration has promoted the concept vigorously, spending more than $50 million on the program since it began in 2013.  ...   Critics in the business community have questioned the fairness and effectiveness of the program, saying it favors companies from outside the state.  [Marie J. French, Albany Business Review, Jul 5, 16]  That's $150K per job, many of which would have happened anyway.

She must have at least stepped on a crack in a federal sidewalk. House Republicans said they would seek a new [FBI] examination into Hillary Clinton, this one focused on whether she lied to Congress about her handling of classified information.   [Kate O’Keeffe and Byron Tau, Wall Street Journal, Jul 7] Re-convene the Gowdy Bengazi Committee for making noise until the election with double-jeopardy investigations.

DARPA’s upcoming Cyber Grand Challenge is a $55-million hacking competition where seven teams compete to take down one another's AIs. But the most exciting part? A Tron-like visualization that will show the bots battling it out  [MIT, Jul 6]

Rousing v. leadingThe skills required to run a populist, fact-averse campaign are not the same skills needed to lead a nation. For all his mercurial talents, on full display during his colorful stint as mayor of London, Boris Johnson would have been a disastrous prime minister.  ... When people are angry, they don’t weigh the costs and benefits of their actions in the usual way; that’s true in life and it’s true in voting.   [Richard V. Reeves, Brookings, Jul 5, 16]  Stand by for two groups of voters talking past each other.

Small biz distribution politics.   Ranking member Sen. Jeanne Shaheen (D-NH) and Senators Tim Scott (R-SC), Heidi Heitkamp (D-ND) and Chris Coons (D-DE) asked questions about geographic diversity to the hearing’s panelists. Economic Innovation Group co-founder John Lettieri praised legislation by Senators Cory Booker (D-NJ) and Scott that would defer capital gains taxes on monies reinvested in distressed areas. Donna Harris, co-founder of 1776, argued for more support for mentorship, a goal that could be met through Sen. Heitkamp’s bill to provide entrepreneurship grants to EPSCoR-eligible areas. Kauffman Foundation vice president Dane Stangler joined the other panelists in recognizing the challenges posed by poor infrastructure, particularly for rural areas. ....  All three panelists praised the importance of basic research and asked for more emphasis on commercialization. Harris called for all federal agencies to invest in these programs and to do so with a consistent set of goals.  The panel’s comments also highlighted a need for better awareness of opportunities among entrepreneurs themselves. In commending the committee’s interest in making a permanent reauthorization of the SBIR program, Harris and Lettieri suggested that lawmakers consider how to make the program more broadly known.   [SSTI, Jul 6]  It's about spreading the money around, not about capital efficiency or government's ability or interest in economic growth. 

The fact is that bad news sells. Good news does not. Proclaiming widespread misery is how politicians get elected (and how most environmentalists get funded), and giving coverage to mass shooters is how newspapers are sold. Giving people a balanced perspective, which often includes a dose of good news, rarely excites anybody.   ....  [ASCH senior biomedical fellow Alex Berezow who also] reports the depressing news that only 6 percent of Americans believe that, all things considered, the world is getting better. [Ronald Bailey, Reason, Jul 7, 16]

Half-truths on fertile ground. Clinton's political opponents accused her of being too close to India, while Pakistanis often view her as critical of their country and Prime Minister Modi appears to enjoy cordial relations with her. After some inquiries, and a few tips, I managed to trace these sentiments to a single publication, a poorly sourced and misleading column that gained widespread circulation upon its release. The article's contents were deemed sufficiently credible to have now become instilled as absolute fact in the minds of many Indians active online. In a digital democracy, a lie or (better yet) a half-lie if told enough times becomes truth. ... Social media, rather than creating connections with people who possess differing views and ideologies, tends to reinforce prejudices.    [Dhruva Jaishankar quoting HuffPo, Brookings, Jun 30]

Tariffs' costs.  Gary Hufbauer and Sean Lowry,  a senior fellow and research associate, respectively, at the Peterson Institute for International Economics, calculated that Obama’s tariffs on Chinese tires cost American consumers at least $900,000 for every job they saved for one year. [Ramesh Ponnuru, BlooombergView, Jul 1, 16] Beware politicians' simplistic formulae.  Concentrated benefits went to tire makers, diffused costs were paid by the public.

Gloomy politics. The standard of our [British] political discourse has fallen more precipitously than the pound and cannot be revived as easily. This did not happen overnight, and the sorry conduct of the referendum campaign was only the latest indication of the decrepit state of our politics: dominated by shameless appeals to fear, as though hope were a currency barely worth trading in, the British public had no such thing as a better nature, and a brighter future held no appeal. Xenophobia – no longer closeted, parsed or packaged, but naked, bold and brazen – was given free rein. [Gary Younge, The Guardian, Jun 30, 16]

Globalization contrast. the heavy investment made by Asian governments in human capital (education and health) to prepare the workforce to take advantage of the high wage manufacturing jobs created by globalized investment. ... Both the U.S. and the U.K, in contrast, have underinvested in infrastructure and in “skilling up” the labor force to make the transition to new and better jobs from the ones lost to lower wage workers in Asia. [Ijaz Nabi, Brookings, Jul 1, 16]  In Asia, government is  a partner; in the West government is the enemy of a tax-allergic leave-me-alone private sector.

The House tax reform is nearly revenue neutral on a dynamic basis. [Wall Street Journal, Jul 5] Never-say-die with "dynamic scoring" on Republican tax cuts as a growth panacea. Turn loose the politcians to make their own accounting rules for their proposals to help their contributors. For a reality check, look at Kansas's tax cuts experience.

Democratic tech program. Presumptive Democratic presidential nominee Hillary Clinton laid out a technology and innovation agenda ranging from connecting every U.S. household to high-speed internet by 2020 to beefing up cyber security and reducing regulatory barriers.  ....   strongly supports the Obama administration's net neutrality rules requiring broadband providers to treat all data equally, rather than giving or selling access to a so-called Web fast lane.  ....    increase [R&D] budgets of the NSF and similar entities and train up to 50,000 computer science teachers. [Mohammad Zargham, Reuters, Jun 28]  Who could be against all those goodies, without being charged to pay for it?     Presto: the dog catches the car. And, of course, it has no idea now what to do with this car. There is no plan. There is just barking.   not the end of the world yet, but if a few more E.U. countries try this trick we’ll have quite a little mess on our hands. Attention Donald Trump voters: this is what happens to a country that falls for hucksters who think that life can just imitate Twitter — that there are simple answers to hard questions — and that small men can rearrange big complex systems by just erecting a wall and everything will be peachy.  [Tom Friedman, NY Times, Jun 28]  Twitter and other social media have shortened our vision of how to make good things happen, in favor of wishing and changing the subject.

Brexit matters.  The vote by British citizens to leave the European Union is likely to have an economic impact in Wisconsin. The UK is the fourth-largest recipient of exports from Wisconsin.  [Milwaukee Journal Sentinel, Jun 24, 16]

Nostalgia is the past. Levin believes that both parties, in their different ways, are caught up in the fundamental mistake of wanting to restore such features of post-World War II America as steadily rising incomes and low economic inequality, hegemony in the global economy, growing government, broad membership in the mainstream religions and a white-bread mass culture. Such goals, which are especially appealing to politicians of the baby boom generation who were young back then, are, Levin insists, nostalgic and unachievable. We need to accept that the country is now unalterably far more decentralized, and to devise political solutions around that reality. [reviewing Yuval Levin's The Fractured Republic, NY Times, Jun 25]

As in the United States, the underlying cause of so much voter resentment isn’t trade agreements or immigration. “The problem for individual European countries, whether they are members of the E.U. or not, is globalization,” Ms. de Gruyter said.  [James Stewart, New York Times, Jun 23]  Voting for Brexit or Trump won't solve the problem which admits no instant answer.

Republicans have another new old tax plan - cut taxes - for the moneyed - that "delivers simplicity and fairness, yet is built primarily for growth in jobs, paychecks and America’s economy". Their bankrollers demand nothing less as their think-tankers keep pumping out the rationale. With enough assumptions anything can be proved. Most economists will deride the idea, and the debate will stagnate until the next election cycle.  Wash, rinse, repeat.

Over the next four years, the University System of Maryland Board of Regents has agreed to invest $10 million into startup companies created by professors, students and recent graduates from USM institutions. The state, other venture capital groups and outside investors will give the additional $15 million. In exchange for an equity stake, the USM venture capital fund will invest between $50,000 and $500,000 in individual startups.  ...  Seventeen startups have already been targeted ... though Sadowski declined to name the specific companies.   [Washington Business Journal] How much difference that money makes will depend on the type and companies picked for investment.  If it works like Texas did, politics will have a big had.

[The candidate's] Message: Yes, the Economy Is Messed Up. But I Can Fix It.  [New York Times, Jun 23] Promises, promises, all empty.  Whether the economy is messed up at all depends wholly on expectations. The Golden Age of 4% annual growth returned to normal long term growth below 2% with nothing on the horizon with the potential for maasive new employment, the real pubic complaint on the economy.  Facebook and Twitter just don't hire that many weakly educated workers. There is no escape from the iron law that cheap goods demands cheap labor. Every trip to Walmart pushes US workers out of well-paid work, which the President has no power to stop. The candidates also ignore the reality that the Golden Age had one-breadwinner families with little rroom for women in well-paying jobs. No candidate will dare propose a return to that Golden Age.

Science differences.   Hillary Clinton recognizes that the country faces major issues, but she envisions a future where science plays a critical role in making America stronger. In stark contrast, Donald Trump sees the U.S. on the brink of catastrophic decline. Focused on the present, Trump’s commitment to current issues rather than science funding suggests that the country must first be saved before it can work towards a more prosperous and scientific future.   [Jack Karsten and Darrell M. West, Brookings, Jun 20]

Tribalism revives.  Long-suppressed ethno-nationalist sentiments within America’s aging, shrinking white majority have found their public voice, blocking long-overdue immigration reform and questioning the loyalty of American Muslims.  In Europe, illiberal majoritarianism is on the rise.  [William Galston, Wall Street Journal, Jun 21, 16]  Back to the late 19th century of national enclaves and balance-of-power alliances that resulted in large wars. Who knows not history is doomed to repeat it.

The Supreme Court  blessed new government procedures for challenging patents, a win for companies that argued the fledgling process was a better, more cost-effective way to weed weak patents out of the system. The ruling is a blow for companies that favor strong patent protections, such as those in the pharmaceutical and biotechnology industry.  [Brent Kendall, Wall Street Journal, Jun 20, 16]

Wishing unbounded. “All of my plans are focused on a single, overarching goal,” [the politician] said. “Creating good paying jobs with rising incomes is the defining economic challenge of our time. And I believe so strongly that Americans deserve and need a raise, and every one of my policies adds up to an agenda to make that happen.”  [Colleen McCain Nelson and Laura Meckler, Wall Street Journal, Jun 20, 16] [Another candidate] pledged to create economic growth of as much as 6 percent each year, “growth that will be tremendous.” He says he will deliver “a dynamic economy again.”  [Bryce Covert, New York Times, Jun 20]  Mere puffery;  the president is a minor player in the economics that makes and maintains and eliminates jobs.

State support growing around the world.  In an attempt to support their respective  innovation economies, several countries have announced new national investment strategies and other entrepreneurial support efforts that help startups access the capital necessary to move their business from an idea to a sustainable businesses. Efforts include a fintech focused-fund in Ireland, expansion of existing programs in two Oceanian countries, and a partnership between two of Asia’s largest economies.  [SSTI, Jun 15, 16]  Just don't bet that the investments will be well chosen if politics has any say in the choices.

President matters little.  Clearly, the economy matters in the election of a president. The question that’s rarely answered is whether the president matters in the performance of the economy. Does a president really have much control over the economy? Should the president get the credit when it’s good, or take the blame when it’s bad?   The answer is: No, generally not. [Rex Nutting, Market Watch, Jun 19] Nevertheless, the candidates must pretend that they have magical powers to make an economic difference. The economists will tell you not to believe any promise of high growth because the long term growth rate is under 2% and there is nothing on the horizon to raise that in the face of global competition.

Politicians have to explain things to you in simpler terms,  so that they can get their little oversimplified explanations on the evening news. And eventually, instead of even trying to explain, they give up and start slinging mud at each other. And it’s all to keep you excited, keep you watching. — like you watch a car wreck or a wrestling match.   [presidential candidate Freddy Picker tells a rambunctious crowd in the 1998 film “Primary Colors” notes James Pethokoukis, AEI, Jun 17]

some Brexit advocates claim that leaving the E.U. would free Britain to do wonderful things — to deregulate and unleash the magic of markets, leading to explosive growth. Sorry, but that’s just voodoo wrapped in a Union Jack; it’s the same free-market fantasy that has always and everywhere proved   delusional.  [Paul Krugman, New York Times, Jun 16]

Why is anti-capitalism gaining ground? Dave Spart would no doubt argue that the people are finally realising that the free market is an illusion. Big companies act as rent-seeking monopolies, with their executives lobbying politicians for special favours and tax breaks. The boss-class awards itself huge pay packets regardless of success or failure: it is said that Martin Winterkorn, the departing CEO of Volkswagen, may leave with a pension-plus-severance package worth €60m ($67m). This argument is gaining ground on the right as well as the left. On September 25th Charles Moore, Margaret Thatcher’s official biographer, wrote in the Wall Street Journal that Marx had a valuable insight “about the disproportionate power of the ownership of capital”. A Gallup poll of confidence in American institutions found that “big business” came second to bottom, just above Congress, with only 21% expressing “a great deal” or “quite a lot” of confidence in it.  [The Economist, Oct 2015]  Stay tuned now for the great battle of  nothing-but-capitalism against the nothing-but-government candidates for election as president of a mixed capitalism economy. Your vote and advocacy may matter.

Numerous [Adam] Smith biographers, such as E.G. West, have claimed that Smith's "treatise of 1776 struck a mighty blow at the trade walls which had been erected around the nation states of Europe by the traditional protectionist or mercantilist politicians. In particular, the belief of many of the latter that one nation could become richer only if a rival became poorer."    Clearly, not everyone has gotten the message. In the summer of 2016, we are once again debating the merits of free trade and disputing the benefits of globalized commerce. It is very simply a return to the policies of mercantilism, or economic nationalism, that Smith so convincingly refuted in his day. [James Otteson,, Jun 14]  Unhappily, our political economy system is based on unsurprising distortion of Smith in service to a undeliverable promise free lunch for everyone. But remember that we elect the politicians and then punish them for committing truth about real world economics.  Our political problem is that although Smith's free markets idea is the best system for total wealth, that is not a sufficient societal criteria for acceptable distribution of the fruits. 

The Supreme Court made it easier for patent holders to win increased financial damages in court from copycats who use their inventions without permission. ... in a unanimous opinion overturned a specialized appellate court that had adopted a hard-to-meet legal standard for winning punitive damages, even in cases where the defendant’s patent infringement was willful. ... companies like Facebook Inc. and Alphabet Inc.’s Google, which said strict limits on large damage awards protected innovation and deterred abusive suits alleging patent infringement.   [Brent Kendall, Wall Street Journal, Jun 14, 16]

Dear Legislature, please give me at least $60 million in taxpayer money over 10 years to create jobs in a depressed part of the state.  And don’t tell anyone who I am until after the spending becomes law. ....   for a mystery company that could open a factory to make wooden siding on the [Minnesota] Iron Range. ...  works out to a $240,000 incentive per job   [James Eli Shiffer,Minneapolis Star Tribune, Jun 13, 16]

No action, please, we're political.  Though it’s only early June, Washington is already gripped by election fever, and Congress has decided to punt on just about every major issue until after the election. ...  As a result, fiscal policy will most likely be delayed at least until a new administration takes office in early 2017.  [Justin Wolfors, NY Times, Jun 4, 16]  So, any political response to economic slowing has to wait in hope that a do nothing free-market president gets elected.

If FranceFrance just built an app to help citizens during terror attacks,  "The app, called SAIP (Système d'alerte et d'information des populations)... geolocates users who are near a potential attack and sends them an alert within 15 minutes with safety instructions, France's interior ministry said. The app is free and available in French and English for Apple and Android phones, the interior ministry said."  [Defense One, Jun 8]

Moving to Texas.  Salarius Pharmaceuticals LLC (Salt Lake City, UT; no SBIR) will relocate to Houston following an $18.69 million grant from the Cancer Prevention and Research Institute of Texas. CPRIT awarded Salarius and Pelican Therapeutics (formerly of Boca Raton, FL; no SBIR) two grants totaling nearly $34 million to recruit both of the companies to the Lone Star State. Pelican will be located in Austin; Salarius at Johnson & Johnson's JLABS @ TMC, Houston's new incubator program   ...  Separately, Ruga (San Francisco,  CA; no SBIR) also has plans to relocate following a CPRIT grant. [Joe Martin, Houston Business Journal, May 19, 16]   CPRIT is a Texas state creature authorized by law to issue $3 billion in bonds to fund groundbreaking cancer research and prevention programs and services in Texas [CPRIT website]

Too many new jobs.  An imbalance between job growth and housing supply in Silicon Valley is causing tension among cities, with some criticizing others for adding new office buildings without helping to ease what has become a chronic housing shortage. ... San Jose has taken the rare step of publicly opposing the project, saying it would add far too many jobs, exacerbating the region’s housing shortage. ... Housing has lagged behind commercial projects in part because it is less lucrative for municipalities. Land that goes to residential uses tends to bring in less tax revenue—and requires more services like schools and parks.   [Eliot Brown, Wall Street Journal, Jun 7, 16]  Free-market advocates would say that if housing demand is so high, capital will be drawn into supplying the product.

in the very year voters are clamoring for bold ideas about the future, both Trump and Clinton are living in the past.  Each harks back to a Golden Age when most Americans seemed to prosper and the country was more hopeful and optimistic. But each has a different Golden Age in mind.  For Secretary Clinton, it is the 1990s. For Donald Trump, it is the 1950s. [Howard R. Gold, MarketWatch, Jun 7, 16]  Voters cannot confidently vote for the future, only winners and losers in the present, unless they understand how markets and government actually work. Which neither market or government advocates dare fully explain becasue it would take too long and involve arithmetic. So, for another political cycle we will have to hear the usual half-truths.

The Pentagon has decided to rely on an Abu Dhabi-owned company to supply the most advanced microchips used in U.S. spy satellites, missiles and combat jets.  A senior U.S. Defense Department official said in an interview that the Pentagon has reached a seven-year agreement with Globalfoundries Inc., one of the big four global chip makers, to supply the microchips. Terms weren’t disclosed. .... [Globalfoundries] last year acquired from [IBM] the two plants—in Burlington, Vt., and East Fishkill, N.Y.—that make the chips ... Opening the military market to more producers of the most advanced commercial chips, .... Meanwhile.  a coalition of U.S. chip makers including Cypress Semiconductor has been pressing the Pentagon to help fund upgrades to fabrication plants owned by U.S. companies to allow them to take on the most sensitive work.    [Doug Cameron, Wall Street Journal, Jun 6, 16]  Political security hawks, mostly from the shrink-government party, may find the arrangement dangerous, but mil procurement often lags commercial development for good logistical reasons.

Too much revolution for logisticians.  Vice Adm. William Hilarides, commander of Naval Sea Systems Command, said last year that, because of the railgun’s high power needs, it will be at least 30 years before the Navy considers removing powder guns from the fleet.  [Patrick Tucker, Defense One, Jun 3, 16]  The transition for one type of ammunition and gun to another boggles the logisticians and commanders that must always have a large minimum supply of whatever they are going to use in the war. Wars almost always take much longer than the strategists plan for, with the risk of running out of ammo.  The supply of bombs for the little wars in the Middle East is already running into an urgent need to re-open the production line in case they turn into a big war,  BTW, having a president with the Trump (or Cheney) mindset when considering war puts big unspoken expectations on the logisticians while the civilian side of their Party is trying to shrink the government by underpaying and cutting experienced  civil servants (the ones who keep the machine going as political appointees and admirals come and go on their ways to fame and fortune).

Since there are more smartphones than people, and lots of other high-tech advances, why don't  a lot more people have good jobs?  Don't ask a politician for either an answer or a solution. Some economists insist the problem is largely a measurement gap, because many digital goods and services are not accurately captured in official statistics. But a recent study by two economists from the Federal Reserve and one from the International Monetary Fund casts doubt on that theory.  Technology spending has been robust, rising 54 percent over a decade to $727 billion last year, according to the research firm IDC. Despite all the smartphone sales to consumers, most of the spending is by companies investing in technology to increase growth and productivity. [Steve Lohr, New York Times, Jun 5, 16]  Productivity cuts two ways: it raises profits and cuts product prices, but does so by reducing jobs for humans. And no answer by our politicians addresses the core dilemma. Nor would the general voting citizen sit still long enough to hear the full answer, nor find it on Google as they walk down the street and connect on Facebook or Twitter.  And without a good understanding of the problem, they have no rational economic basis for choosing which politicians to vote for.

How did a party that stood for regular people become a party that stood for platitudes regular people no longer found even vaguely pertinent?   How did the party of Main Street become the party of Donors’ Policy Preferences?    [Peggy Noonan, Wall Street Journal, Jun 3, 16] With 800 comments to the Journal and growing, the nation may come to realize that the supposedly new and brilliant ideas are not new. They have not become policy because the country is divided and that is because every idea has some big negatives in a political world more interested in attack than in useful compromise.  A new swaggering president is cannot break the logjam because his new-old ideas still have the same negatives.

Step One - denial. Free-market fundamentalists prefer rejecting science to admitting that there are ever cases when government regulation is necessary. Meanwhile, buying politicians is a pretty good business investment for fossil-fuel magnates.   [Paul Krugman,  New York Times,  Jun 3, 16]

When domestic is all.  The U.S. presidential election presents a unique threat to the alliance system, with a major political party about to nominate a candidate openly hostile to U.S. alliances. Donald Trump has suggested that the United States might lift the security umbrella over Japan and South Korea, and that he finds it perfectly acceptable that these allies may arm themselves with nuclear weapons as an alternative defense.  [Natan Sachs, Brookings, May 31]  Every four years we engage in navel-gazing where president electing depends almost entirely on domestic issues of variable importance. It is becoming partly the price of unlimited communication as smart phones float down the street dragging a enchained human.

More democracy, please.  Having got a voter-driven major party presidential candidate with no government experience and no coherent policy ideas, Americans say in a poll by the Associated Press-NORC Center for Public Affairs Research that they have little faith in the Democratic or Republican system for selecting a presidential candidate. They prefer open primaries.  ....  Just 17 percent of Republicans and 31 percent of Democrats have a great deal of confidence in their own party's system being fair [whatever "fair" means].  [CATHERINE LUCEY AND EMILY SWANSON, AP, May 31] They seem affected by the complaints of the primary also-rans about super-delegates, who are all elected representatives, despite the plain words of the Constitution guaranteeing a republican form of goverrnment for both nation and states.  Is our dilemma too little democracy or too much?

Simpler solutions.   DARPA, to try to keep up with developments by soliciting worldwide for new ways to make weapons using commercially available materials and technologies. More than 20 experts are now reviewing hundreds of submissions. To better assess the risks, some of the most promising designs will be built as prototypes and tested. This could earn their inventors awards of up to $130,000.  [The Economist, May 21, 16]

The Navy’s experimental railgun fires a hardened projectile at staggering velocity—a battlefield meteorite with the power to blow holes in enemy ships and level terrorist camps [Julian Barnes (not the novelist), Wall Street Journal, May 27, 16]  Breathless reporting of Navy's technical ability to throw a bigger dart faster by substituting electric energy for propellant burning.   We were working on that tech thirty years ago but never adopted it for reliability and effectiveness reasons. The dart idea goes back fifty years and is the basis of modern Army tank guns. Like all new weapons, the guys who shoot-to-kill and the guys who supply the logistics will pose some hard questions before you see it in anybody's armory.  And with darts, aiming is the critical determinant in effectiveness since it does not work by exploding near the target.

Seeking a savior.  Yes, the economic statistics say there’s been a recovery—a relatively nice one at that. But mentally, many Americans have never recovered, and perhaps never will. The experience has altered their attitudes about the political and economic systems and their leaders, and left them willing to consider risky alternatives.  ....    But whatever the precise causes, the depth of the scars, and the dissatisfaction with the alternatives, do little to suggest we should expect some feeling of satisfaction and national unity to emerge miraculously after the election of 2016, regardless of outcome.  [Gerald Seib, Wall Street Journal, May 30, 16]  The bad news for people wanting to elect something magically different is that the political system has little power over our chosen economic system. We have had Democratic governments and Republican governments that could not deliver the magic of safe prosperity, because the rest of the world gets a strong vote. Life is simply too complex for simple promises.

Distrust prevents pragmatismA narrow question of public policy—how to stop Texas and other neighbours pinching Oklahoma teachers—has exposed broad, not very cheering truths about democracy. Elected politicians have prospered by urging voters to distrust them. Voters duly bound legislators’ hands to limit government mischief. Now Oklahoma is struggling to deliver a policy with near-universal support.  [The Economist, May 28, 16] Free market aficionados learn about competitive bidding and free agency.  Recently, a retired Air Force sergeant who had returned to his Oklahoma roots, told me that Oklahoma has three political issues: abortion, abortion, and abortion.

Cheap products still require cheap workers.  Both major [presidential] candidates have embraced policies [fewer immigrants or higher minimum wage] that will ensure the accelerating replacement of low-wage workers with no-wage workers - robots. .... Young people will find it even harder to find entry-level jobs.  ...  Social Security, could be devastated by the robotics revolution. If ever-fewer human workers are paying into the system while larger and larger numbers of seniors are getting benefits  [Taylor Dinerman, Wall Street Journal, May 26, 16] In sync, Foxconn, the [China] manufacturing company that builds electronic devices for a range of companies including Apple, Samsung and Microsoft, has reportedly replaced 60,000 human workers from one of its factories in China with robots, according to the South China Morning Post. [Mike Murphy,, May 26] The economics of labor, regardless of president, drive the free-market US economy's workplace.  The only consolation for the fewer cheap workers will be their ability to buy cheap products.  To further complicate the dilemma, the USG is actively funding R&D to increase productivity on the theory that higher productivity means higher wages (for the few remaining workers).  Stay tuned for silly analyses and promises by political candidates.

Defense Secretary Carter says the Naval Undersea Warfare Center in Rhode Island is doing what the entire Defense Department should do: develop technology more quickly.   He told students at the U.S. Naval War College the defense industry once had a stronger connection to the technology industry, and he's spending a lot of time in Silicon Valley and Boston trying to restore it.  He also says he's concerned about budget instability. [AP, May 25, 16]   In my early Army days the faster way was to put more men on the job (except for making babies).   SECDEF makes nice speech but faster means more money which the politicians who want faster results aren't willing to ask the nation to support it.

NASA is giving Navy researchers in San Diego access to an unusually powerful computer that might help users do such things as better forecast the outcome of battles and more efficiently control the collective movement of unmanned vehicles.  ... the D-Wave 2X quantum computer housed at the NASA Ames Research Center ....  NASA and its partner, Google, say that the D-Wave 2X can run algorithms 100 million times faster than conventional transistor-based computers.  [Gary Robbins, San Diego Union Tribune,  Apr 28, 16]

It was to be the salvation of Buffalo, a billion-dollar godsend from the administration of Gov. Cuomo that promised to revitalize the depleted city with bold investments there and across western New York.  But ...  Federal investigators are examining how money and contracts were distributed.  .... federal investigators’ interest seems to lie less with whether the people of Buffalo will ultimately benefit than with those who already have: a tangle of well-connected players — including developers and frequent donors to the governor — who have feasted on Buffalo Billion money.   [Jesse McKinley and Vivian Lee, New York Times, May 24, 16] In politics, money talks, and economic reality is suspended.

Noble purpose.  Trump's campaign manager said that the businessman and presumptive Republican presidential nominee aggressively took deductions to pay the lowest income-tax rate possible so he could pump the tax savings back into hiring more people for his businesses.  [Byron Tau, Wall Street Journal, May 23, 16]

A smiling governor axes public functions. Kansas Gov. Sam Brownback signed the state's budget into law and also ordered $97 million in budget cuts, The Topeka Capital-Journal reports.  ... Medicaid and higher education funding took the brunt   [Kansas City Business Journal, May 19, 16]  Who's winning?  The higher bracket taxpayers who get to keep more of their income while public functions decline, altough the guv probably didn't put it that way. Like most political claims hard to prove or disprove, he prefers to claim greater economic growth.

Delaware may have moved a little closer last week to becoming home to a major research-and-development hub backed by the U.S. Department of Energy. The [Wilmington] News Journal reports that U.S. Energy Secretary Ernest Moniz and top officials from the agency’s 17 national laboratories visited the University of Delaware to discuss existing and future partnerships— a move that officials say could have major implications for local researchers and the state’s top science-based companies. The end goal, they said, is to eventually convince one of those national labs to open a satellite facility here to anchor a public-private partnership devoted to energy research and development, similar to what the Delaware Biotechnology Institute has done for biotech startups since 2001 [Jeff Blumenthal, Philadelphia Business Journal, May 16, 16]  Stand by for political logrolling before any one place gets federal largesse.

In case you want to wander into national security contracting (they have tons of money), Social media now part of government background checks [Kent Hoover, Washington Businesss Journal], your ranting on Facebook will be examined as background investigation.

the Obama Administration launched an initiative to understand the communities of microbes that help sustain life on the planet -- including human beings.  ... funded with $121 million in federal money, and run by the White House Office of Science and Technology Policy. It extends to more than 100 other public and private organizations, which collectively are contributing another $400 million.    [Bradley Fikes, San Diego Union Tribune, May 13, 16]  A Republican administration would make speech about tax cuts as an incentive for provate investment and development.   But if the development makes economic sense for investment, the private sector would already be doing it. The tax cuts for growth are just so much fantasy to justify paying off the political donors.

Snake-oil comeback. Moves in Congress to link billions of dollars in new medical research funding to revised standards for drug and medical-device approvals are troubling some public-health experts, who say the combination makes it too easy for lawmakers to support lower patient-safety standards.  ... The House bill would, among many provisions, eliminate disclosure of many hefty payments to doctors by industry, eliminate the need for some advanced trials of antibiotics and allow some medical devices to be marketed based on anecdotal evidence or medical journal articles instead of controlled clinical studies.  [Thomas Burton, Wall Street Journal, May 12, 16]

Think tanks, in short, seemed to hold out the hope of making government better able to address complex domestic and international problems and less susceptible to popularly appealing, but ill-founded, proposals. [author] argues that these institutions have not fulfilled their promise. To the contrary, the University of Minnesota historian maintains, think tanks—at least, he believes, conservative ones—have been co-opted by the political process: They express what he calls “tribal markers” rather than providing disinterested, fact-based recommendations for improving government. ... Mr. Lenkowsky, a professor at Indiana University, is a former president of the Hudson Institute, a conservative think tank.   [Leslie Lenkowsky  reviewing Jason Stahl's Right Moves: The Conservative Think Tank in American Political Culture Since 1945  Wall Street Journal, May 12]  Think tanks are like most employers who tell their stock-holders what they want to hear.

Re-start innovation already.  Defense Secretary Ash Carter is overhauling nascent efforts to do business with Silicon Valley, hoping to reinvigorate a Pentagon innovation office that failed to gain traction in the technology community.  ... removed leaders of the innovation office, opened last August in Silicon Valley, replacing them with executives who have worked at top tech firms, including Apple Inc. and the Google ... aims to give the initiative more focused goals and the ability for speedier deal-making as the Pentagon tries to break down barriers with technology firms in an effort to accelerate weapons development and maintain an advantage over adversaries such as China and Russia.  [Gordon Lubold and Doug Cameron, Wall Street Journal, May 11]   Handshaking can be liberal; contracts still follow procurement laws Executives were concerned about the Pentagon’s barrier-heavy acquisition system and potential loss of intellectual property. ...  “DIUx will be a test-bed for new kinds of contracting with startup firms,” Mr. Carter said.   After thirty years of SBIR, DOD still looks for experience and safety in R&D contracting.

Debt in a new light.  Paul Ryan became a Republican icon in 2011 with an ambitious budget devoted to lower tax rates, slowing the growth of social entitlements and, above all, “lifting the crushing burden of debt.” It became his party’s economic mission statement.   In Donald Trump, Republicans now have a presidential candidate who rejects virtually every element of that vision. He is erratic on taxes, won’t touch entitlements, and proudly calls himself “the king of debt.”  [Greg Ip, Wall Street Journal, May 11] Politics loves and hates debt but finds it the only way to satisfy the voters.

The last country to try [Trump's debt]route was Argentina, which defaulted on some of its debt in July 2014. The result wasn’t pretty. The economy was thrown into recession, contracting by 3.5 percent. Inflation spiked to as much as 41 percent. Consumption fell by 4.5 percent. The country was shut out of international markets. It may be years before Argentinians dig their way out of the mess.  [Michael Tanner,, May 11]  Beware politicians with sound-bite solutions to intractable problems.

NASA uses its SBIR money for its internal purposes, period, says a new NAP report.   it is our judgment that the NASA SBIR program is encouraging the expansion of technical knowledge. ... [NASA SBIR companies] suffer from the NASA SBIR program’s focus on NASA’s specialized needs. .... NASA was unable to provide comprehensive data on follow-on contracts after Phase II ... NASA’s SBIR program is not sufficiently driven by metrics. NASA lacks sufficient evidence on the operations of its SBIR program. Commercialization and company success? Don't know, don't care; NASA just does NASA's mission. The report tiptoes around the serious political question of whether SBIR is worth doing, so the handouts to the small biz world can continue unabated by any program efficiency standards. Congress could, of course, do something serious like hand NASA's SBIR money to an agency that would pursue the downstream economic impact goal that would do small biz a lot more good than nice technical reports for NASA's library. But Congress cares about only one aspect of SBIR: spend the required minimum money on small biz.   Report available at

Trump's vow to round up and deport all of America's undocumented immigrants if he is elected president could shrink the economy by around 2 percent, according to a study by conservative think tank American Action Forum.  [Luciana Lopez, Reuters, May 5]  Not to worry; an impossible policy that ain't gonna happen.  It's just an emotional political appeal to the nerve-ends of the anti-immigrant voter horde.

about Trump and small biz: He’s the favorite candidate of small business owners; He took the family business to the next level; Bankruptcy is a business tool for Trump; would be the first president with no experience as an elected official since Dwight D. Eisenhower; Trump’s (fantasy that would add $10 trillion to federal budget deficits) tax plan looks good for small businesses.  [Kent Hoover, Washington Business Journal, May 4, 16]

Religion-based health program. the President's [GW Bush, that is] Emergency Fund for AIDS Relief, supports initiatives that teach abstinence, reduction in sexual partners and delay in the first sexual experience. It's intended to reduce the risk of HIV infection and also cut the number of teen pregnancies.  More than $1.4 billion has been invested in these programs since PEPFAR's inception in 2004 to 2013, the study said. But an examination of the behavior of nearly 500,000 people in 22 countries failed to find any evidence that the education program had made any difference in changing behavior, the study found.  [Bradley Fikes, San Diego Union Tribune, May 2, 16] Don't despair, though, the Republicans have other wishful-thinking social and economic programs to satisfy their religious "conservatives" who do not believe in data.

Read cautiously. Chinese authorities have issued verbal warnings to economists, analysts and business reporters whose gloomy public remarks on the economy are out of step with the government’s upbeat statements.  [Lingling Wei, Wall Street Journal, May 3, 16]

Protection revived.  At the end of the Civil War, in 1865, the Republican party rebranded itself as a supporter of protectionism, introducing high tariffs alongside government subsidies for US industry. ... At the end of the Civil War, in 1865, the Republican party rebranded itself as a supporter of protectionism, introducing high tariffs alongside government subsidies for US industry. .... Reflecting the paranoia of Republicans past, those who support free trade initiatives are now charged with being part of a vast conspiracy to undermine American democracy. As in the American Gilded Age, the future of US  – and world – economic globalisation once again hangs in the balance.  [Marc-William Palen, History Today, Apr 28. 16]  But, like with military battle plans, the enemy gets a vote.

Colorado economic-development officials agreed to invest more than $7 million into information technology and advanced-manufacturing companies and projects, hoping to lure several headquarters to the state and to boost the local workforce for those high-paying job sectors.  [Ed Sealover, Denver Business Journal, Apr 21, 15]

China has shown off its latest drone, a loitering munition that bears a distinct resemblance to the U.S. Switchblade UAV made by AeroVironment. [Foreign Policy sitrep, Apr 29, 16]

Econ first. The vast majority of Americans say they prefer lower prices instead of paying a premium for items labeled "Made in the USA," even if it means those cheaper items are made abroad, according to an Associated Press-GfK poll. [AP, Apr 14, 16]  The reality: cheap goods require cheap workers. Meanwhile, the rich-guy populist declaims, "We're getting ripped off on trade by everyone," said Trump at a speech in Albany, New York. "Jobs are going down the drain, folks."  What economics will you vote for?

More federal money, please. The region’s future, so closely tied to the advancement of the Buffalo Niagara Medical Campus, as well as life sciences and clean energy, continues to rely on federal level financial support for research and innovative practices.  [James Fink, Buffalo Business First, Apr 8, 16] So local leaders told the presidential candidate trolling for votes. "You bet, you deserve it," she no doubt replied, as if the taxpayers of Georgia and Idaho would love to send money to New York.  Actually, the people of New York send money to Idaho as NY gets less than a dollar back for every federal tax dollar paid and Idaho gets more than a dollar.

Sen. Moran: Overhaul tax code, abolish IRS. [USA Today, Apr 14] Kansas Senator with re-election competition to his right wants the US to have the same economic woes as Kansas from suicidal tax-cutting. Republican devotion to "what's mine is mine," devalues the idea that advanced nations work best with a mixed economy with taxation to support societal goods.

This led Warburg, when asked to identify the Fed's father, to quip that he didn't know, but given how many made the claim, "its mother must have been a most immoral woman."  [Jeffrey Rogers Hummel reviewing Lowenstein's book  America's Bank,, Mar 25, 16]

Ransom demand.  The decision to keep the fast-growing Juno Therapeutics biotech's headquarters in the city where it was founded will rest on whether policy makers in Washington state decide medical innovation is important, CEO Hans Bishop said. .... The state needs to look at its tax policy, Bishop said, and figure out how to incentivize new companies to grow in Washington and to attract mid-sized companies to the state. If it doesn't, his company and others may not be located here in 10 years.  Washington used to have a research and development tax credit that helped companies like Juno offset the business and occupation tax, but lawmakers allowed that credit to sunset last year.  ... While, Washington has a Life Sciences Discovery Fund to help support young biotech companies, its future funding was cut last year, as well.  [Coral Garnick, Puget Sound Business Journal, Mar 30, 16]   Everybody needs a handout, just ask them.

The U.S. Department of Commerce (DOC) would be eliminated, and many research programs at the National Science Foundation (NSF) and the Department of Energy (DOE) would be sharply curtailed, under a plan released last week by the budget committee of the U.S. House of Representatives.  [Science, Apr 1, 16] Annual shrinkage rite.

Smart, cheap labor goes fast. Once again, the federal government received enough applications to fill the 85,000 slots available for new H-1B visas in only a few days.   [Kent Hoover, Washington Business Journal, Apr 8, 16]  Despite PhDs for Americans pouring out of American federally-supported research universities, business pleads for government approval for smart immigrants who work cheaper and probably follow orders better. Meanwhile, universities plead for more research money to fund all the unemployed post-docs who just want to do science.  Politics in a nominally capitalist society.

Who cares about Iraq?  the lack of any meaningful opposition to military intervention abroad and comprehensive disinterest among the public ensure that a small elite in Washington will make the decisions about war and peace. As Bacevich has written extensively about, the all-volunteer U.S. military, in which less than 1 percent of the American population serves, puts the general public at a comfortable remove from any real consequences of policy. Most people remain, in Bacevich’s view, unaware — and fundamentally uninterested.    [Celeste Ward Gventer reviewing  Bacevich's  history of America in the Middle East,  WashPo, Apr 9, 16]

in February 1848, “Old Man Eloquent,” as he was then called, collapsed at his desk in the House of Representatives and an obscure one-term congressman named Abraham Lincoln was assigned to the committee making the funeral arrangements. Many of the eulogies to Adams identified him as the last remaining link to the founding generation. James Traub’s splendid new biography, “John Quincy Adams: Militant Spirit,” asks us to envision him as the missing link between the creation of the American Republic and its near dissolution in the Civil War.  ....  John Quincy never had a childhood, nor was he raised to be a happy man. He was instead fashioned like a hardened steel projectile, aimed at the center of American history.  [Joseph Ellis reviewing Traub's new biography of Adams, New York Times, Apr 9, 16]

Be careful what you wish for. Perhaps the unexpected strength of Donald Trump will provide a wake-up call — if it isn’t already too late — to the Republican establishment, reminding it that if all you ever do is bash government, you risk creating a vacuum that may be filled by something you will really want to forget.     [Matthew Bishop reviewing Hacker and Pierson's American Amnesia, New York Times, Apr 9, 16]

What had seemed impossible just a few years ago is now rolling through cities and states led by forward-looking politicians. Together, these changes amount to a “revolution in the workplace,” as one exultant activist put it.  ...  Now, the bad. Following North Carolina’s lead, another state, Mississippi, passed a law allowing people and institutions to deny services to gay people. With this measure, Mississippi, already one of the poorest states in the nation, ensures that good job providers will stay away.   [Timothy Egan, New York Times, Apr 8, 16]  The Confederate legislatures long for the 18th century, before the Bill of Rights.

Welcome to our state of low tax, cheap labor; your under arrestSouth Carolina investigators have arrested 13 workers from Boeing’s North Charleston complex on state tax-evasion charges and more arrests are expected, the Post and Courier newspaper reports.  ...  accused of submitting fraudulent W-4 forms claiming to be exempt from state income taxes  [Seattle Times, Apr 6, 16]

Wholesale upgrades.  The Defense Microelectronics Activity office awarded a 10-year, $7.2 billion contract
to Northrup Grumman, Boeing, Raytheon, General Dynamics, Lockheed Martin and Bae Systems, among others. The Pentagon's Advanced Technology Support Program IV wants speed up the process of replacing obsolete and antiquated electronics hardware and software, shortening the process from months to weeks. (Washington Business Journal, Apr 5)

Local v Global.  Mississippi’s [and NC] governor signed far-reaching legislation allowing individuals and institutions with religious objections to deny services to gay couples, and the online-payment company PayPal announced it was canceling a $3.6 million investment in North Carolina.   [JONATHAN M. KATZ and ERIK ECKHOLM, New York Times, Apr 5, 16]  Local pols pander to local prejudices, however troglodyte; businesses operate globally and cannot afford to alienate large segments of the customer population. Backward-looking religion-tainted politics threatens forward-looking business. Why?  religion’s appeal has been eroding in the United States since the end of the 1980s, according to research by Michael Hout of New York University and Claude Fischer of the University of California, Berkeley. In 1987, only one in 14 American adults expressed no religious preference. By 2012, the share had increased to one in five.   [Eduardo Porter, New York Times, Apr 5, 16]  The idea that US has secular government is slowly gaining purchase as science and its public message advance the idea that evidence beats myth.

From the end of World War II to 1980, virtually no U.S. soldiers were killed in the Mideast. Since 1990, it’s about the only place they’ve died.  [Robert Kaplan reviewing Bacevich's  America's War for the Greater Middle East,  Wall St Journal, Apr 4, 16]

Just as happy and more angry.  Data on the nation’s economic recovery, people’s reactions to current economic conditions and their overall sense of satisfaction with life do not suggest Americans are angry. In fact, historical measures indicate people are about as happy and satisfied with the economy and with their lives as they were in 1983, when Ronald Reagan told us it was “morning again in America.”   ....  Since 1972, the General Social Survey has asked people to “take things all together” and rate their level of happiness. The 40-year trend shows only modest changes — and may actually suggest a small increase in happiness in recent years.    ....  So why does it feel more like a 1 a.m. bar brawl?   .....   in part because they have sorted into parties based on attitudes on race, religion and ethnicity.     [Prof Lynn Vavreck, New York Times, Apr 4, 16]

The U.S. Air Force Research Laboratory (AFRL) at Wright-Patterson Air Force Base (USAF/AFMC) and Purdue Research Foundation have signed a partnership intermediary agreement to accelerate the commercialization process and support activities to move innovations to the public. [Purdue press release Mar 24, 16] A warm sounding idea that first needs the USAF to invest in things that would have any substantial commercial market interest.  Fat chance!

Personal note: today is the 50th anniversary of an exciting event: the car-bombing of my Saigon hotel/officers' quarters, the Victoria Hotel.  Story available in New York Times archive for Apr 1, 1966.

Hong Kong is to limit the number of non-resident children getting vaccinations at government clinics, after an illegal vaccine scandal in mainland China raised fears some families would come to the city for inoculations and put pressure on supplies.  Illegality was not maintaining the required refrigeration of $90M worth of the vaccine. [Twinnie Siu and Clare Baldwin, Reuters, Mar 30, 16] Selling damaged goods was common in 19C Americas before regulation was widely adopted, which Republicans regularly chafe against as though they long to sell damaged and dangerous goods. Trust Chinese goods and Republicans at your peril.

The State Department would like you to know that the collective leadership of planet earth is having a mild anxiety attack
over the Republican primary. The Hill reports that State Department spokesman John Kirby told reporters that "virtually every foreign leader" U.S. Secretary of State John Kerry meets with "expresses a fair bit of angst" about the U.S. presidential race. [Foreign Policy sitrep, Mar 29]

Milton Friedman has said that free trade is a hard sell because its beneficiaries are many, but they don't know who they are, while its victims are few, and they know who they are.   [David Welber commenting on Fred Smith's op-ed on trade, Wall St Journal, Mar 25]   When politics inevitably intersects economics, long term and broad ideas take a back seat. The opponents of trade offer no solution that would not decrease the total econonmc well being of th nation.  Protection of high paying jobs leads to high cost products that cannot compete in world trade.  We would wind up with a high-level economy isolated from the rest of the world in whioch the most profitable industry would be smuggling.

Good government.  In the century before Reagan [claimed that government was the problem, [authors Hacker and Piersom] note, the United States grew to become the world’s richest, most powerful and most admired country. And it did so, they argue persuasively, not in spite of the rapid growth in the size and reach of government, but precisely because of it — because government put a high school and college education within reach of all its citizens, because government made serious and systematic investments in railroads, highways and scientific research, because government protected investors and workers and consumers from the natural excesses of market competition and put an economic safety net under all Americans.  [Steve Pearlstein reviewing Hacker and Pierson's American Amnesia, WashPo, Mar 27, 16]

The intelligence community's advanced research shop, IARPA, is looking to build a system that can remotely detect
all manner of nasty and dangerous chemicals hanging around U.S. facilities. And its name is everything you hoped it would be. The Molecular Analyzer for Efficient Gas-phase Low-power Interrogation, or MAEGLIN would look for harmful substances like chemical weapons, radioactive materials, drugs, toxins, and pollutants by periodically sampling the air and analyzing its contents at different sites.   [Foreign Policy sitrep, Mar 24, 16] no SBIR in intelligence agencies. Look for Broad Agency Announcements for invitations to propose.

The Congressional Research Service (CRS) has published a new report from top naval analyst Ron O'Rourke. "Navy Lasers, Railgun, and Hypervelocity Projectile: Background and Issues for Congress" updated CRS's continuing series on the Navy's next generation of sci-fi weapons over the last edition, issued in November of 2015.  [Foreign Policy sitrep, Mar 24, 16]

China to create its own ‘DARPA’  China is putting military R&D under the oversight of the People's Liberation Army (PLA), forming a new science and technology committee to manage defense R&D. That committee, in turn, is now creating a new agency it claims is modeled after the [DARPA]. According to a spokesperson for China's Ministry of National Defense, the committee, is designed to meet the needs of China's ongoing military modernization. China's central government plans to spend $147 billion on defense this year; the amount allotted to defense R&D is a state secret. ... The committee will strengthen management of defense science and technology, promote indigenous innovation in national defense, and coordinate integrated development of military and civilian technologies, the spokesperson says. [Science, Mar 18, 16]  Subject of course to the paranoia of the Central Committee of the Party.

We’re going to have two parties in this country. One will be a Democratic Party that is moving left. The other will be a Republican Party. Nobody knows what it will be, but it’s exciting to be present at the re-creation. [David Brooks, New York Times, Mar 24]

Celator Pharma up 25% [Mar 23,16] after IPO

“Is it not in the nature of intelligence agencies to keep the information for themselves?” asked Jean-Marie Delarue, who until recently headed the French agency that reviews surveillance requests from these intelligence services. Information is power,” Mr. Delarue said in a recent interview. “In intelligence, one only has enemies, no friends.”    [Adam Nossiter, New York Times, Mar 23]  Meanwhile, on the US campaign circuit, wishful thinking abounds in competition to sound tough without saying anything useful. If the voters accept such tactics, they deserve the wishful government they get.

 You’ve heard of mental depression; this is a mental recession. We may have a recession; we haven’t had one yet. We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline. [Sen Phil Gramm, 2008]   Gramm was one of the major figures who helped set the stage for the crisis. My book "Bailout Nation" included a list of “Who is to Blame for the Crisis” that put Gramm at No. 3 .... Maybe it isn't too surprising that [presidantial wannabe] Cruz would seek advice from Gramm. Cruz, after all, seems to want to hobble modern economic policy by returning to the gold standard. The Cruz-Gramm school of economics doesn’t seem very promising. We have seen these movies before, and they end in tragedy and tears.   [Barry Ritholtz,, Mar 23, 16]

Populist authoritarians rising.  All of this [international trouble] has left people fearful that their better days are behind them. They feel a distinct loss of sovereignty—of nation, of community, and of self. This fear has perhaps been most acute amongst the historically powerful and largely middle class communities in each region. These majority groups have felt their sway and reach diminishing, and worry that their prospects for future greatness are becoming more and more tenuous. Enter the populists who promise to make things right through brutal efficiency and an iron fist. Their bellicosity is reassuring, the brave knights able to shield and parry any attack while also able to take the fight to the enemy, both within and without. [Manu Bagavan,, Mar 21]

Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy (EERE) recently released the first round of 33 awardees from the Small Business Vouchers Pilot program. A total of $6.7 million will be awarded in the form of vouchers for assistance from DOE national laboratories of up to $300,000 a piece.  [SSTI, Mar 16, 16]

MIT has continued to highlight its Future Postponed  report with three new case studies, chosen to "exemplify a growing U.S. innovation deficit in areas that have high significance for national security or economic competitiveness" or illustrate "the extraordinary intellectual and social potential of additional investment in basic research." The new case studies focus on the life sciences and earth sciences.  [AAAS, Mar 17]

“He would bring the cabinet secretary a copy of a memo,” Kaplan writes. “ ‘Here,’ McConnell would say, handing it over. ‘You wrote this memo last week. The Chinese hacked it from your computer. We hacked it back from their computer.’ ”     [Gordon Goldstein, reviewing Fred Kaplan's Dark Territory, WashPo, Mar 19]

Cheap goods still require cheap workers.  The lesson from Findlay [OH] [a frayed-at-the-edges town of 41,000 people which is home to one of Ohio’s larger tyre plants] is that there are no short-cut solutions to the anger of blue-collar workers. Findlay’s tyre-builders have had the direct attention of a president and international tariffs signed on their behalf. Still they feel—passionately—that the economy is stacked against them, and want larger changes to capitalism than mainstream politicians can deliver. What then? [The Economist, Mar 18]  How much more would you pay for autos and parts so that "Buy American" American Midwest workers could get the world's best pay package?  How much would you contribute to a fund to supply free economics lessons for Americans who could handle some arithmetic?

Fantasy economics remain.  the Republican presidential candidates were never asked to address the budget problems in Kansas [a parallel political universe]  ....  passed massive tax breaks for the wealthy and repealed all income taxes on more than 100,000 businesses. ...  The Koch-backed Kansas Policy Institute predicted that Brownback’s 2013 tax plan would generate $323 million in new revenue. During its first full year in operation, the plan produced a $688 million loss. .... Brownback pledged to bring 25,000 new jobs to the state in his second term; as of January, he has brought 700.  ...  as of November, Brownback’s approval rating was 26 percent, the lowest of any governor in the United States.   [Eric Levitz, New York magazine, Mar 18] Politicians only pretend they understand economics.

China competing science. China will invest heavily in science and technology over the next 5 years, and will cut red tape hampering science spending in the hope that innovation will help the country weather its economic slowdown. [said] Chinese Premier Li Keqiang ..  The plan boosts science spending by 9.1% in 2016 to 271 billion yuan ($41 billion); by 2020, it says, R&D investment will account for 2.5% of gross domestic product ... also reduces bureaucratic barriers for scientists, improves environmental protection while curbing carbon emissions and other pollutants, and cites a long list of national priorities, including building national science centers and space programs and expanding high-speed rail. However, the plan offers few concrete details on how such measures will be implemented or funded. [Science, Mar 11, 16]

Tony Fratto, who was a White House spokesman for George W. Bush’s Administration,  tweeted , “What essentially happened today is @HillaryClinton was elected president. We have 8 months of hyperventilating before its official.”  [John Cassidy, New Yorker, Mar 15]

 Technology entrepreneur Naveen Jain has raised $6.7 million from investors for his newest venture, BlueDot, which aims to form health-care and energy businesses from federal research.  Bellevue-based BlueDot pays to license research that comes out of NASA and national laboratories within the Department of Energy and other agencies, Jain said. Blue Dot then plans to spin out companies dedicated to specific technologies that have the potential for “big social impact.”  [Rachel Lerman, Seattle Times, Mar 14] An old intriguing idea looking for a pony in the manure pile.  "Been there, seen that, got the T-shirt" said one gov tech reviewer of a proposal for breakthrough tech.  Government technology research in mission agencies is funded there because private investment does not find it attractive. When the usual relatively safe research is finished (politicians hate failure), it will still be unattractive for private investment. SBIR was supposed to be one route from government to private use, but it has failed that objective for the same basic reason.

As a trusted world fades. The places where Trump has done well cut across many of the usual fault lines of American politics — North and South, liberal and conservative, rural and suburban. What they have in common is that they have largely missed the generation-long transition of the United States away from manufacturing and into a diverse, information-driven economy deeply intertwined with the rest of the world.  “It’s a nonurban, blue-collar and now apparently quite angry population,” said William Frey, a demographer at the Brookings Institution.   [NEIL IRWIN and JOSH KATZ, New York Times, Mar 12, 16] 

Illegal emigrants.   These  artisans-made-good  were  the  most  talented  and  ambitious  products  of a system that combined basic schooling in literacy and arithmetic with apprenticeships based mainly on learning by doing. That system  yielded  workers  so  valuable  that  it  was  a  crime  for  them  to  emigrate  before  the  mid-1820s.   [Cormac Ó Gráda  reviewing Jacob's The  First  Knowledge  Economy, J Economic Literature, Mar 2016] Of course how would the losing country prosecute the "crime" when the "thief" has been welcomed by the gaining country?  And since American industry was hugely helped by English talent who stole designs for England's textile machines, how moral would America sound complaining about turn-about?

Meddling force or rampant individuals?  The only thing, ideologues had argued, that could distort a market was the imposition of unnecessary rules and regulations by a third party, which had no vested interest in the outcome of the transaction and that was therefore a meddling force that robbed markets of their magnificent, near-mystical wisdom. These meddling forces were called governments. The flaw in the theory became apparent as soon as it was proved, once and for all, that irresponsible behaviour in a market did not simply affect the parties involved but could also, thanks to the knock-on effects of modern derivatives, bring whole national economies to their knees. .... Then!  What a stroke of luck! Socialism [government rescue] too good for the poor, turned out to be just the ticket for the rich.  [David Hare, the Guardian (UK), Mar 8, 16]  In America the get-out-of-jail ticket for the rich fostered a set of new constraints on rampant individuals, constraints that awakened much new and hearty investment in thecause of shrinking government. the only way they could restore prosperity, they insisted, was by returning unpunished to exactly the same practices that had precipitated the crisis in the first place.

A scientist who helped start a biotechnology firm four years ago is set to receive an award from President Barack Obama at the White House in the coming months.  While the date isn't finalized, Dino Di Carlo, co-founder/chief scientific officer of Vortex Biosciences (Menlo Park, CA; no SBIR) and a bioengineering professor at UCLA, said he was ecstatic to learn Feb. 18 he had won a Presidential Early Career Award for Scientists and Engineers -- one of 105 independent researchers nationwide to earn the honor.  [Kevin Kelly, San Jose Mercury News, Mar 9, 16]

Raise high the walls.  With an overvalued dollar and a growing trade deficit, the Republican president needed to fulfill an election promise to protect manufacturers from foreign imports. So he stunned the world by imposing a 10% across-the-board tariff on imports. A scene from a future Donald Trump presidency? Actually, Richard Nixon 1971.   ...   Many of Mr. Trump’s policy positions are inconsistent, seemingly formed on the fly. But his antipathy to foreign trading partners is deep-rooted. In 1987, he wrote that Japan became wealthy “by screwing the United States with a self-serving trade policy.”  [Greg Ip, Wall Street Journal, Mar 9, 16]  Collecting a majority of votes in nearly universal suffrage across the whole US needs a lot of simplification of complex questions. And voters tend to ask the question, "What have you done for me lately?" at the suggestion of a political challenger to an incumbent.

Ye reap what ye sow.  Dysfunction in Washington is Mr. Trump’s friend; the politicians who now curse his rise have created the gridlock that enables him. [Gerald Seib, WSJ, Mar 7]

Geopolitical Backdrop Is Uncertain. The world is flat, networked and interconnected, and America can no longer see itself as an "oasis of prosperity." Moreover, our politics are increasingly embracing left- and right-wing extremes as the electorate abandons the middle course in the face of diminished expectations. To top it all off, the world's neighborhood is unsafe. Wars are raging not only in the Middle East, but also in Ukraine despite repeated EU peace-deal attempts. Russia is also becoming more aggressive along the East/West divide from the Baltics to the Balkans. [Doug Kass,, Mar 3] Kass's #8 of  top 10 reasons to expect more volatility during 2016. And if you listen to the presidential contenders, you get no confidence that they have a clue about the true state of the economic world.

In a world of economic stagnation, unstable geopolitics and unpredictable human migration, a significant portion of Western citizenries define conservatism in its most primitive sense: hunker down, protect what you have and keep outsiders out.  Now Donald Trump has brought reactionary economic populism to the United States  [Charles Lane, WashPo, Mar 2]

Speaking of election cycles, there have only been a handful of times in history when we experienced a two-term election cycle. When observing the performance of the eighth year in this cycle, only 1988 produced a positive number (at +2.6%). All the other years were tear-jerkers at -32.9% (1920), -12.7% (1940), -9.3% (1960), -6.2% (2000), and -33.8% (2008). Still feeling optimistic about 2016? Yes? Let's continue then ...  [Adam Koos,, Mar 1]

Isolation walls. In this election, no major candidate is trumpeting “free trade” or even managed trade on the NAFTA model. Sen. Bernie Sanders called the Trans-Pacific Partnership negotiated by the Obama administration “disastrous.” Hillary Clinton refused to support it, too. [The real-estate developer] called it “a horrible deal.” Sen. Marco Rubio once pushed TPP but has since backed away.   ...  Twenty-four years ago, the United States was the world’s largest exporter. It had only benefited from trade deals.  [Jon Talton, Seattle Times, Mar 1]

The polarization and bitterness of our politics can be exaggerated, but there’s a reason for the souring mood. Handing out goodies to voters is more pleasant than taking stuff away and makes for a lot more bipartisan conviviality. ...  We’ve run out of the ability credibly to promise ourselves more goodies than a non-growing population in a non-growing economy can supply. The resources aren’t available because we don’t produce them—either because we can’t or won’t work productively enough or because we decline to labor under high enough tax rates.   [Holman Jenkins, Wall Street Journal, Mar 1]  As Pogo noted: We have met the enemy, and he is us..

"It's an election year, and candidates can't stop speaking about our country's problems (which, of course, only they can solve)," [Warren] Buffett wrote, italicizing "they" for emphasis.  ..  The babies being born in America today are the luckiest crop in history,"   [Reuters, Feb 27]

spare a thought for the hapless American voter, who is being subjected to one of the most bizarre displays of fantasy economics I’ve ever come across.  Ted Cruz wants to return to the gold standard, while his Republican rival, Marco Rubio thinks all banking regulation should be abolished.   Against this nonsense, Donald Trump, now the Republican favourite, looks almost sane, though he doesn’t seem to have thought at all about the damage deporting 11 million immigrants would do to the US economy, or indeed the harm that would be inflicted by protectionist tariffs.  As for the Democrats, Bernie Sanders claim that his policies would lead to a 5.3pc growth rate is so obviously off the wall that it has prompted a letter of complaint from a top drawer group of former presidential economic advisers. [Jeremy Warner, The Telegraph (UK), Feb 27]  Since basic economics is only taught at the college level, it is not surprising that the general public invites the fantasies.

Economist Robert Gordon says politicians promote wrong answers. Gordon proposes fixes for the U.S. economy that mix liberal and conservative solutions. He supports a higher minimum wage, for example, and the deregulation of labor markets. He's dismissive of Trump's call to restrict immigration. Yet he doesn't believe that more government spending is needed to fuel innovation, a cornerstone of Hillary Clinton's platform.  Gordon's book, "The Rise and Fall of American Growth," argues that a slowdown in innovation since 1970 has hampered growth in productivity. That means that U.S. workers aren't becoming more efficient as fast as they did in the past. And that, in turn, means that pay is likely to remain sluggish  [CHRISTOPHER S. RUGABER, AP, Feb 25, 16]  If you listen to the Republican debates, you realize that they have no useful and defensible economics ideas at all. Main idea: reduce their patrons' taxes. Mostly they sling personal vituperation.

Spin doctors' meat.  The economy has consistently grown less under Republican presidents than Democratic ones. It’s just not clear why that is — or how much a president’s policy choices have to do with it.  At least since 1947, the historical record seems to support a simple conclusion: If you want the American economy to grow, you ought to put a Democrat in the Oval Office. A careful examination of the evidence suggests that the correlation is unmistakably real. But it’s probably just a correlation, which means that Democrats can’t claim credit for it. [Cass Sunstein,, Feb 25, 16] Not to worry, your favorite spin doctor will tell what you want to hear. For example, the US Chamber of Commerce opines the view that we are in a policy stagnation. What’s holding us back is a self-defeating indulgence of imprudent regulation, taxation, and stifling monetary policy. [Bret Swanson,, Feb 25] The USCC mission is to move us back to the 19th century of unrestrained commerce.

Impeding SBIR watchers.   SBA has recast its SBIR award data again, to makes it a longer slog to gather data pertinent to the program's effectiveness. Not that there seem to be many people asking hard questions on a political feel-good handout. New name: SBIR Analytics Dashboard. Not clear what users it is designed for, certainly not for people asking hard questions.

DOD was accepting SBIR Phase I proposals until Feb 17. Remember to tell then what they want to hear, which is usually not about your commercial or profit ideas. DOD does not see itself as any player in the US economy. It wants military capability. NOTE: DARPA will consider Direct to Phase II proposals under a pilot program. Note also: the serious innovators at DARPA do not want run-of-the-mill proposals that just make the government smarter.

[NY] Governor Cuomo announced a major expansion of Athenex (Buffalo, NY;  $1.1M SBIR as Kinex, founded 2003) that will create 1,400 jobs throughout Western New York. This announcement, made possible by a partnership with the SUNY Polytechnic Institute, includes a major expansion of Athenex’s North American headquarters at the Conventus Building in Buffalo, as well as the creation of a state-of-the-art, 300,000 square foot manufacturing facility in Dunkirk. The combined projects are expected to yield a $1.62 billion investment over ten years from Athenex, along with $225 million from New York State. in Dunkirk.  ....  [In January] received [FDA] allowance to proceed in the clinic with its proprietary oral form of Docetaxel.  [company press release, Feb 11, 16]

Talk makes cheap.  The presidential campaign is rewarding candidates who talk down the state of the economy, adding to both consumer and investor jitters. It has scared financial markets by making front-runners of the two contenders— Donald Trump and Sen. Bernie Sanders—who offer the most radical economic formulas. And a stilted campaign debate is providing only sketchy discussion of what any of the candidates actually would do on fiscal and tax policy if they win. [Wall Street Journal, Feb 15, 16]  Too bad, we have trained political candidates to stoke fear and promise unreachable economics in the strongest, richest nation in the world.

Someone should tell Janet and her posse of Keynesian money printers that there is no such economic ether as “accommodation”. That’s Fed groupspeak for their utterly erroneous conceit that the US economy is everywhere and always sinking towards collapse unless it is countermanded, stimulated, supported and propped up by central bank policy intervention.  [David Stockman (Reagan henchman in the 1980s),, Feb 12] Champion of red-in-tooth-and-claw capitalism. Would have no truck with handouts like SBIR.

Free lunch tax cuts disappoint.  Kansas is already facing deep fiscal woes in the wake of Mr. Brownback’s decision to cut taxes, which he predicted would help bolster the state economy. In a classic power struggle The Kansas Supreme Court gave the state until June 30 to fix its system of financing public schools, or face a court-ordered shutdown before the next school year begins. ...  Republican lawmakers accused the court of judicial overreach ... A similar showdown between the Legislature and the Kansas Supreme Court in 2005 resulted in lawmakers agreeing to increase per-pupil spending in schools, but the additional funding stopped amid the national financial crisis. [New York Times, Feb 11]  Should high tech innovators and researchers look to Kansas as a place to live and work?

Budget games time again. President Barack Obama is making a strong push to increase spending on scientific research. His fiscal year 2017 budget plan, released on February 9, calls for a 4% bump in research and development funding across the federal government. But science advocates and lawmakers alike say that they’re unhappy with Obama’s decision to boost science by relying on ‘mandatory’ spending.   [Science American, Feb 10, 16]  The non-defense austerity crowd doesn't like "mandatory"spending, but that dislike does not extend to SBIR which is protected by small biz's halo effect.

This week DARPA is holding is a symposium spelling out the requirements for a new DOD program “Neural Engineering System Design,” which will dole out $60 million as part of President Obama’s BRAIN Initiative. The goal: to develop technologies able to record from one million neurons simultaneously in only four years.  But that’s just a start. DARPA, the agency administering the program, also wants a device that can stimulate at least 100,000 neurons in the brain. [Adam Piore,, Feb 2, 16]  Want to deal with serious government innovators? Go DARPA.

In the biz recruitment wars, A key Senate budget chairman will recommend that Gov. Rick Scott get his wish for $250 million to recruit businesses to Florida. [Jim Turner, Tampa Bay Business Journal, Jan 26]

As a historian, I’m not optimistic that our culture wars will end anytime soon. These angry disputes about the meaning of America, and who is a true American, have been raging since the early days of our nation. We’ve lurched from one cultural conflict to the next. A loss in one battle further convinces culture warriors that our society is going to hell. So they cast about for another grievance — another “them” to blame for what is happening to “us.” In this way, the culture wars are perpetually rising from the dead. ...  they follow a predictable pattern. They tend to start on the right, with conservatives anxious about some cultural change. Yet conservatives almost always lose, because they lash themselves to lost causes. [Stephen Prothero, WashPo, Feb 3] Politicians reach for whatever lever seems to ignite interest. It matters little whether it changes minds, only that it brings minds to attention.

Gov. Kate Brown says she wants small businesses to thrive in Oregon. As such, she's allocated $400,000 toward that end. The SBIR Grant Support Program will provide individual grants of $125,000 to four Oregon companies participating in a companion federal grant program ....  The Oregon Innovation Council [public-private partnership of  more than 40 leaders] that helps create new jobs and new companies will review applications and recommend award recipients.  [Elizabeth Hayes, Portland Business Journal, Feb 2, 16]  Unclear what that little money will do to advance true high tech innovation, especially if the company has already won SBIR money.  Oregon Inc claims More than $490M in federal grants on a $77M state investment (6-1 ROI); 90 companies formed; $130 million in private capital raised.  Its 2015 report claims 196 jobs and $77M new investments attracted from $1.4M "invested". It further claims that Energy Storage Solutions  (Portland, OR; no prior SBIR) startup earned a $75,000 matching grant to support its research into next generation energy storage for solar and wind power. Energy Storage Solutions also won grants through Oregon BEST and [SBIR] and raised $3.2 million in venture capital to start large-scale battery production. Energy Storage Solutions was among five companies that received SBIR matching grants in 2015 to support Oregon’s small business innovators.  If the returns are that rewarding, why only $400K? Politics likes to spread money as widely as possible.

Supply-side takes another hit. Kansas collected $7 million less in taxes than expected in January, and a top aide to Republican Gov. Sam Brownback said Monday that ongoing problems in key parts of the state's economy are to blame.  [John Hanna, AP, Feb 1]  In Kansas tax cuts are a religion with a covey of priests declaring immutable doctrine. Naturally, the high priest Laffer counters with claims that Kansas didn't do it right. Just wait and see what happens when these pro-growth policies have had sufficient time to have their full supply-side effects materialize.   [, Feb 1]

If a little bit is good, a whole lot is better, argue the SBIR advocates who are back again looking for an even bigger piece of the R&D pie in direct prime government contracts to SB.   A study conducted in 2014 showed that companies that won phase two SBIR awards from the Air Force alone created 234,000 jobs in the U.S. between 2000 and 2013 — more than Google, Apple, Cisco and Microsoft combined.  ...  The committee is beginning to work on legislation reauthorizing the program, and hopes to avoid the problems that plagued SBIR’s last reauthorization, which took three years and 14 short-term extensions, some that passed only days before the program would be terminated.  “This process was incredibly stressful for small businesses, as there was a constant atmosphere of uncertainty over three years over whether or not the program would be around,” said Jere Glover, executive director of the Small Business Technology Council, which represents many SBIR recipients.   [Kent Hoover, Washington Business Journal, Jan 28] All the studies that I have seen are lemonade studies that never get to the core question of how much is enough and how to make an honest economic evaluation with a control group. What's never measured is the degree that SBIR helped in the capital investment of the few big success companies. Not surprising since the government deciders have no capability and no interest in assessing the company and technology as an economic investment.  Oh, never mind, it's all politics and abused economics in a Congress with more important questions to grapple with. Think how big the subsidy programs would be if SB actually gave real money to the politicians.

The candidate from Neverland is promising to build up the U.S. military with money freed up by tax and regulatory cuts from a throttled American economy.  But he's defending votes for budget bills that have cut U.S. military spending.  [AP] The candidate bets that the voters don't want to hear about arithmetic. Economists galore have pointed out that tax cutting and regulation easing might help corporate profits, at least for a while, but decrease government revenue, not make more revenue available for pet political projects.  Examine the recent Kansas experiment with tax cutting. When a politician prescribes economic solutions that sound too good to be true, they are too good to be true.  If the economists don't know a good solution to economic dilemmas, why should anyone believe that a politician knows?

The government massively overinvested in transportation and land development. The banking system was inefficient and corrupt. State governments gorged on debt, then defaulted on it with aplomb. The stock market was crooked, rife with cronyism and insider trading. Stocks shot up and down like yo-yos.  China? No, that was the U.S. in the 19th century.  [Jason Zweig, Wall Street Journal, Jan 27]  The world that the Tea Party Libertarians would revive in the name of liberty and faith in human greed.

 A poll commissioned by NC Child holds that 72 percent of North Carolina voters support using available federal money to “fix the health insurance gap” to insure more adults.  [Raleigh News & Observer, Jan 27] If they could just have the money and not the program it comes from. 

Former Defense Secretary Robert Gates took aim at the current crop of Republican presidential hopefuls at an event, saying “the level of dialogue on national security issues would embarrass a middle schooler,” Without naming names, he continued, “people are out there making threats and promises that are totally unrealistic, totally unattainable.”  [Foreign Policy Sitrep, Jan 27]  Sure, threats and promises are unrealistic, because the voters want to hear such words.  And if we vote on those expectations, we get the wishful thinking government we deserve.

Market meddling. U.S. Senators Charles Grassley (R-IA) and Ron Wyden (D-OR) this week summed up their 18-month investigation into the prices Gilead Sciences decided to charge for its hepatitis C drug, sofosbuvir (Sovaldi), and the follow-on, Harvoni. Now that their report is out, the senators want public feedback by March 4 to help shape future policy on drug pricing and the value of innovation. [Alex Lash,, Jan 22, 16]  Politicians want cheap milk without paying for the cow. Free-market touting Republicans should object on principle.

With liberty and justice for all.  In the 1850s, London, the world’s largest city, still didn’t have a sewer system. Waste simply flowed into the Thames, which was as disgusting as you might imagine. But conservatives, including the magazine The Economist and the prime minister, opposed any effort to remedy the situation. After all, such an effort would involve increased government spending and, they insisted, infringe on personal liberty and local control.  It took the Great Stink of 1858, when the stench made the Houses of Parliament unusable, to produce action. ....  What we know so far [about Flint MI water scandal 150 years after Londin's awakening] is that in 2014 the city’s emergency manager — appointed by Rick Snyder, the state’s Republican governor — decided to switch to an unsafe water source, with lead contamination and more, in order to save money. And it’s becoming increasingly clear that state officials knew that they were damaging public health, putting children in particular at risk, even as they stonewalled both residents and health experts.   [Paul Krugman, New York Times, Jan 24] Voting this year for smaller cheaper government?

Court denies "we don't wanna do it" suit. A federal appeals court declined to temporarily block a key Obama administration environmental rule to limit carbon emissions from power plants, rejecting requests by states and companies that wanted the regulation halted while they challenged it in court.  ... The court said the challengers “have not satisfied the stringent requirements” for a stay of a regulation pending the court’s review.  ... said it would consider the legal challenges on an expedited timeline.     [Wall Street Journal, Jan 21]  Challenging a regulation that is legal on its face is an uphill struggle to effectively overturn the law that created the requirement.

Skip the siren song of saviours.   As Anand Giridharadas writes in The International New York Times, “If anything unites America in this fractious moment it is a widespread sentiment that power is somewhere other than where you are.” ... Americans are beset by complex, intractable problems that don’t have a clear villain: technological change displaces workers; globalization and the rapid movement of people destabilize communities; family structure dissolves; the political order in the Middle East teeters, the Chinese economy craters, inequality rises, the global order frays, etc.  ...   Instead of shoring up these institutions, many voters are inclined to make everything worse. Plagued by the anxiety of impotence many voters are drawn to leaders who pretend that our problems could be solved by defeating some villain. ...  If we’re to have any hope of addressing big systemic problems we’ll have to repair big institutions and have functioning parties and a functioning Congress. [David Brooks, New York Times, Jan 22]

Representative democracy is the art of transferring wealth from large unorganized groups to concentrated interests, and specific tax preferences serve that end beautifully.  [Benjamin Zycher, AEI, Jan 16]

Trust us, your data are safe. SBA Administrator Maria Contreras-Sweet told Chabot’s committee that the agency is working to implement the GAO’s recommendations, but small businesses can already be confident that their data is secure. ....  a recent Government Accountability Office report found that the SBA has failed to implement 62 of 69 recommendations it has made in the past, including more than 30 related to information technology security.  ....  The SBA, however, still is searching for a chief information officer to lead its IT efforts. Contreras-Sweet said it’s tough for government agencies such as the SBA to attract top IT talent, but she’s determined to fill this position soon.    [Kent Hoover, Washington  Business Journal, Jan 7, 2016]  SBAwill never attract a world-class IT head for a backwater agency with no money to invest unless Congress provides both a hammer and a lot more money.

Think in decades, not the political news cycle.   I know this is a dangerous time. But that's not because of diminished American strength or some looming superpower," he said. "The Middle East is going through a transformation that will play out for a generation, rooted in conflicts that date back millennia…And the international system we built after World War II is now struggling to keep pace with this new reality. It's up to us to help remake that system. [Barack Obama, Jan 12] The political competition for office unfortunately plays to the news cycle and the instant gratification expected from info tech.

After trying to retire the battle-tested Warthog for the past two years [make that two decades], Air Force officials concede that the plane is key to the war on ISIS  ... is shelving its immediate plans to retire the A-10 Warthog. [Marcus Weisgerber, Defense One, Jan 13]  USAF's pilot mafia has an existential problem: A-10, drones, and enemy air defenses.  While the high and fast force keeps the skies clear of enemy planes, the low-and-slow A-10 helps win ground wars which have been the focus for at least three decades. Just as the even slower drones driven by arcade games operators, are delivering results on the ground.

No loyalty of place, just public handout competitionGeneral Electric announced it will move its headquarters to Boston, leaving the sprawling suburban Connecticut campus it has called home over the past four decades for a technology-rich city it says better fits its ambitions as an innovation leader.   [SUSAN HAIGH, Associated Press, Jan 13] That and $145M in handouts Massachusetts offered GE incentives up to $120 million through grants and other programs, while the city of Boston offered up to $25 million in property tax relief, according to the mayor's office.  And when that handout runs out, there will be another round of extortive competition for another round of handouts from desperate places.  Kansas is really desperate these days for job sources.  After all, a headquarters that makes nothing and sells nothing can exist anywhere in an age of total communication.

Defend it or lose it!  When psychopaths use religion as incentive for gutting civilization against ill-prepared citizens.  It’s a problem that only looks to get worse as fights for the densely-packed cities of Fallujah and Mosul loom on the horizon in 2016   [Foreign Policy sitrep, Jan 7]

Kansas cuts taxes and everything else.The Kansas Bioscience Authority, which gained national attention before slowly losing most of its state funding, will go private. [SSTI, Jan 6] Kansas is a model for the theory that cutting taxes will solve most economic and government problems. They are of course disappointed to find that the supply-side theory is a just another political myth, that lower taxes would create so much economic activity that government revenue would actually increase.

Read China data at your peril. the arrest of Wang Xiaolu, a financial journalist at Caijing, an independent Beijing-based magazine, who reported in July that the government planned to pull back on propping up the stock market. Mr. Wang was detained, then forced on national television to confess that he had published “private information” and brought “great losses to the nation and investors.”  Publishing private information about markets is central to financial journalism. Mr. Wang’s reporting about government plans was accurate, which was no defense. Instead, Beijing used his case to instruct other journalists it is now a crime to report accurate information about markets  [L. Gordon Crovitz, Wall Street Journal, Jan 10, 16]