in a recent report economists at Goldman Sachs studied the historical record and found that all else equal, every $100 boost to the budget deficit because of policy decisions (as opposed to economic developments such as a recession) raises the trade deficit by $35. In last week’s annual budget outlook, the Congressional Budget Office predicted the tax cut will nudge up economic growth, interest rates and the dollar, which sucks in more imports and discourages exports. [Greg Ip, Wall Street Journal, Apr 18, 18] Evidence, as opposed to political wishing, says that the Trump/Republican plans for taxcuts and trade wars will worsen the US economic posture. The only net beneficiaries will be the wealthy who can increase their share of the total wealth. Which can continue until the Trump "base" learns Economics 101.
Energy Department is looking to
partner with industry to build what would become the most powerful
supercomputers in the world. The agency published a request for
proposal worth up to $1.8 billion to develop two exascale
supercomputers, and a potential third supercomputer at some point in
the future. The systems, which would each cost an estimated $400 to
$600 million to build, are scheduled for completion between 2021 and
2023. The computers would outperform China’s Sunway TaihuLight
supercomputer, the most powerful machine in existence, by more than
tenfold and run 50- to 100-times faster than the current fastest
computer in the U.S. Technologists have hypothesized that exascale
technology, capable of crunching more than one quintillion calculations
per second, would mirror the computing power of the human brain.
[Jack Corrigan, NextGov, Apr 9, 18]
A grant program started by the European Research Council (ERC) to spur commercialization of basic research is showing success, an independent survey found. ERC awards basic research grants to individual researchers that typically pay €1.5 million to €2.5 million over 5 years. But in 2011 the agency started adding €150,000 supplemental [Proof of Concept (PoC)] grants to cover the initial costs of commercial development. ... Among recipients of these Proof of Concept (PoC) grants who responded to the survey, 42% reported filing at least one patent application, compared with only 17% of a control group who had unsuccessfully applied for PoC funding. [Science, Mar 30, 18]
He also traces useful continuities between Kremlin disinformation campaigns and Trump’s shameless mendaciousness: “Trump adopted the Russian double standard: he was permitted to lie all the time, but any minor error by a journalist discredited the entire profession of journalism.” [Christian Caryl reviewing Timothy Snyder's The Road to Unfreedom, WashPo, April 13, 18]
Falsehood diffused [with Twitter] significantly farther, faster, deeper, and more broadly than the truth in all categories of information, and the effects were more pronounced for false political news than for false news about terrorism, natural disasters, science, urban legends, or financial information. .... Contrary to conventional wisdom, robots accelerated the spread of true and false news at the same rate, implying that false news spreads more than the truth because humans, not robots, are more likely to spread it. [Soroush Vosoughi1, Deb Roy1, Sinan Aral, Science, Mar 9, 18]
“Small businesses are increasingly stuck in a bureaucratic twilight zone,” Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee, said .... “There is rampant confusion about how the new tax law works — untested policies, sloppy legislative drafting and outright mistakes in the law. On top of that, a Trump cabinet turf battle has been adding to the uncertainty and lengthening the time that small businesses are going to be in the dark about how the tax rules apply to them.” [By ALAN RAPPEPORT and JIM TANKERSLEY, New York Times, APRIL 12, 2018] Enjoy the new tax break, if and when it ever arrives, and you can understand how it works.
Better late than never. The Army Research Laboratory is now setting up its own “open campus” [DIUx] in [Boston] to help make its innovation efforts more nimble and cutting-edge. [Caroline Houck, DefenseOne, Apr 10, 18] The Army, like all the other DOD services, has ignored three decades to juice innovation with a program named innovation - SBIR. Only war punched the innovation start button in the classic readiness mode of the USA from its beginning: first start or enter a war and then figure out how to operate. We'll see how well their "requirements" dogma handles new tech with military R&D.
Realism in testing. Trump in an early morning tweet warned Moscow that "nice and new and 'smart'" missiles would be headed to Syria, saying "Get ready Russia." "Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and 'smart!'" he said. [John Bowden, The Hill, Apr 11, 18] Since any military would cringe at the idea of telegraphing an attack, this must be a new Trumpian vision of realism in testing.
Tribal reality. Trump’s takeover of the Republican Party is complete. Eighty-nine percent of Republicans now have a positive impression of the man. ... In any tribal war people tend to bury individual concerns and rally to their leader and the party line. As late as 2015, Republican voters overwhelmingly supported free trade. Now they overwhelmingly oppose it. [David Brooks, New York Times, Apr 9, 18]
Small biz snake oil. compared to large firms, small firms pay lower wages and provide fewer benefits, injure and lay off their workers more frequently, spend less to protect the environment, are less productive and less innovative, and create a smaller share of net new jobs. ... Heaping praise on small business may garner applause from the peanut gallery, but showering privileges on firms because of their size is bad economics and bad policy. [Robert D. Atkinson and Michael Lind, Wall Street Journal, Apr 6, 18]
Negotiating. Further escalation could be in the offing. The US treasury is working on plans to restrict Chinese technology investments in the US. And there is talk that the US could also put limits on visas. ... China’s retaliation so far has targeted Midwest farmers, many of whom were bedrock Trump supporters. [The Guardian, Apr 8, 18]
After so many decades of globalisation, economics and information have successfully grown beyond the authority of national governments. Today, the distribution of planetary wealth and resources is largely uncontested by any political mechanism. ... Trump’s office can never have the level of mastery over American life that Kennedy’s did, so he is obliged to fake it. ... He cannot put more money into the hands of the poor who voted for him, but he can hand out mythological currency instead; even his poorest voters, after all, possess one significant asset – US citizenship – whose value he can “talk up”, as he previously talked up casinos and hotels. Citizens who have nothing are persuaded that they have a lot. [Rana Dasgupta, Decline of the Nation State, The Guardian, Apr 5, 18]
Trade war bluster. Trump threatened a major escalation in trade tensions with Beijing, saying he was considering imposing tariffs on an additional $100 billion in imports from China. [Wall Street Jounral, Apr 6, 18] Seemed to work for him in real estate industry. Congress can rewrite the laws Trump uses for trade actions, since in almost all things government, Congress has the ultimate power. In the political realm, however, Mr. Xi enjoys advantages that may allow him to cope with the economic fallout far better than Mr. Trump can. His authoritarian grip on the news media and the party means there is little room for criticism of his policies, even as Mr. Trump must contend with complaints from American companies and consumers before important midterm elections in November. [Steven Lee Myers, New York Times, Apr 5, 18] For an estimate of what China can do, visit any large Chinese city (several you probably never heard of in the several millions people, like Tianjin 17M) and count the tall buildings and the containers in the ports.
A wall, a wall,
my kingdom for a
Sees 2,000 to
4,000 National Guard Troops at the Border
President says the troops, or a large portion of them, will remain until border wall is built. [Alicia A. Caldwell, Wall Street Journal, Apr 5, 18] A solution seeking a problem? Trump’s plan to deploy the National Guard to the U.S.-Mexico border is not likely to address immigration issues in any significant way. [Elaine Kamarck, Brookings, Apr 5, 18]
White House is now
considering its options
to roll back some of those increases [in non-defense agencies].
[Eric Katz, govexec.com, Apr 4, 18]
The barrier: those increases are now the law, that only Congress can
change. Appropriations are not just suggestions or options, and the
President cannot reverse his approval of the appropriation law.
Trump talks big about killing treaties made by previous administrations. If he does, why would anyone make any treaty with him or the US?
Robotics, artificial intelligence, and a willingness to strike the enemy's non-military targets will figure in [Russia]'s future strategies, reports Technology Editor Patrick Tucker. [Defense One, Mar 29, 18] Look for the DOD to eventually respond to the threat in their SBIR solicitations, but not this month.
Panic button. The Trump administration is preparing to limit Chinese investment in sensitive U.S. technology, ranging from microchips to 5G wireless technology, as it tries to prevent China from gaining an edge in industries projected to power the global economy for decades. [Ana Swanson and Alan Rappeport, New York Times, Mar 29, 18] Close the gates, raise up the walls, prepare to repel invaders, eject the young aliens, and accept an ever decreasing growth rate. For a preview, study Japan.
Showtime again. Ryan plans to bring a balanced budget amendment to the House floor for a vote, .... obscures the deeper problem in our nation’s capital: the inability to agree upon what the country needs and how to pay for it. After all, if Republicans are so serious about balancing the budget, there’s nothing stopping them from doing so right now, with or without an amendment. [Yuval Rosenberg and Michael Rainey, Fiscal Times, Mar 29, 18] Since they just passed a trillion dollar debt increase for millionaires' tax cuts, and now need some TV illusions for their voters, trot out old show horse.
China returns fire in Trump's trade war, riasing tariiffs on 128 American products. Stand by for "He started the fight, ma, he hit me back.".
Our president, having engineered a big tax cut for his own business, tweets that Amazon should pay more taxes.
Trump is pushing for the Department of Defense to help build the border wall with Mexico, according to a report in The Washington Post. [Fiscal Times, Mar 27, 18] The DOD has long been a favorite source of funding for un-defense projects like breast cancer research. Trump has to learn how to negotiate with an independent Congress that rejects imperial presidents. If he ever wants to read, he could start with the Constitution.
Research and innovation funding rose 12.8 percent, to the highest inflation-adjusted level ever; Trump had called for the largest cuts in history. [Michael Rainey, Fiscal Times,Mar 26, 18] As long as the national credit card is open for purchases, life can be good. Meanwhile, Trump's puppet Treasury Secretary Steven Mnuchin called on Congress by to give President Donald Trump a line-item veto despite the Supreme Court ruling 20 years ago that the practice was unconstitutional. [WSJ Market Watch, Mar 26, 18]
The Senate Small Business Committee advanced eight bills last week, including legislation that would extend SBIR pilot programs to support commercialization, [SSTI, Mar 21, 18]
Opening a war. Trump announced he plans to slap tens of billions of dollars in tariffs and penalties on imports from China to try to curb what he described as its efforts to steal intellectual property from U.S. companies. .... Trump said that imposing tariffs on China is “going to make us a much stronger, much richer nation.” [The Hill, Mar 22, 18] Does he imagine the Chinese will accept his terms as they stretch to expand in the world?
DOEnergy awarded $1.5M to Mohawk Innovative Technology (Albany, NY; 100 SBIRs) for a High Temperature Anode Recycle Blower for Solid Oxide Fuel Cells – to develop modular, low-cost, oil-free anode recycle blower (ARCB) technology to increase efficiency and support a reliable balance of plant subsystems. The approach will build on a prototype developed during Phase I and implement production optimizations and simplifications to reduce blower unit costs. The project will culminate in a 1,500-hour test of Mohawk’s ARCB in a 200-kilowatt SOFC prototype system. [DOE press release, Mar 14, 18] Such a program is designed to reduce business risk of a technology that has been shown to work, not something that government should be doing to compete with private capital. Republican administrations used to object to such handouts, even firing the head of DARPA in the 1980s for advocating "dual use". Note also: SBA has again made it more difficult for the public to discover SBIR payout data in convenient form. Perhaps the huge accumulation of SBIR in several "SBIR mills" has caught the eye of Congresscritters from the flyover states. Note also: the present Secretary of Energy had a track record of handing out tech R&D money to politically favored entities when governor of Texas.
The federal helping hand. While the current role of the federal government has captured attention, it is worth noting the contributions of federal and higher ed technology commercialization policies– themselves innovative at the time – to both companies’ origins: Qualcomm’s roots trace back to an SBIR award, while Broadcom is the result of a UCLA spinoff and generous entrepreneurial leave granted by the institution. [SSTI, Mar 13, 18] Trump won hearty approval even among some staunch San Diego Democrats when he blocked Broadcom’s hostile takeover of Qualcomm. The news was joyously received [by] Qualcomm co-founder and former CEO and board chairman Irwin Jacobs ( a vocal SBIR booster) [Diane Bell, San Diego Union Tribune, Mar 13, 18]
Republicans yakking about new tax cuts as another free lunch with the $500B bill sent to the future. Live well on your credit card with no payments due - in your lifetime. How credulous are the voters? Judging by this week's Pennsylvania by-election, not as credulous as hoped. The U.S. government could spend more paying interest on its debt than it does on Medicaid by 2021 and the cost of debt service could surpass defense spending by 2024, according to a newly published analysis by the Committee for a Responsible Federal Budget. [Yuval Rosenberg and Michael Rainey, Fiscal Tims, Mar 15, 18]
Michael Griffin, defense undersecretary for research and engineering, has said the Defense Department needs to expedite its acquisition processes in order for the U.S. to remain competitive against potential adversaries, DoD News reported [GovConWire, Mar 7, 18]
Trump is his own nationalist economist. Talk loud and wield a big stick, worked for the mogul of a family real estate company, who got narrowly elected by appealing to the lowest economic class in half a dozen swing states. Now he takes no advice from the knowledgeable economists who do not run for office. He has his own political economic model apparently honed from long hours watching Fox News. And he believes in proof by loud and frequent assertion. Now he is launching a trade war on his own nationalist theory of international economics, with a Republican Congress unsure what to do about it in an election year. As aides head for the doors in record numbers, President Trump increasingly relies on his own judgment, in effect operating a presidency of one. [PETER BAKER and MAGGIE HABERMAN, New York Times, Mar 7, 18]
Swingers. In this divided country, if the two parties do not work together to find common ground, we are doomed either to gridlock or wild swings in policy —and we will never address the hard challenges of climate change and rising debt, which demand bipartisan consensus to share the pain as well as the benefits. [Alice Rivlin, Brookings, Feb 27, 18]
A bigger better umbrella. “We must no longer think in terms of building just ‘limited’ missile defense capabilities,” concluded a report that was issued last year by the Center for Strategic and International Studies, a Washington think tank. “The United States should begin the journey to develop a next-generation missile defense.” It called for pursuing a “space-based kill layer” that would try to shoot down swarms of enemy warheads and missiles — a step that would go beyond the Reagan administration’s “Star Wars” research on space arms and no doubt prompt new rounds of reaction from Mr. Putin and the Russian military. [DAVID E. SANGER and WILLIAM J. BROAD, New York Times, MARCH 5, 2018] Move and counter-move continue dancing in strategic space. A new, improved defense will need technology that does not yet exist - an opening for innovation with the DARPA mental approach. Trump and "my generals" have to seriously invest at technology's bleeding edge for hardware and doctrinal advances.
Trade wars are good, and easy to win. --- POTUS Trump. Investors speculated that the angry reaction of American allies, in particular the European Union, showed U.S. global leadership is fading and with it the dollar’s appeal as a reserve currency.The tariffs may also lead to a broader rethink of just how beneficial Mr. Trump is to the economy. [Greg Ip, WSJ, Mar 2, 18] .... The Obama administration imposed tariffs on Chinese tires. They cost consumers about $900,000 for every tire-making job they saved for a year. [Ramesh Ponnuru, AEI, August, 2017]
What idle politicians do. The Essential Act (H.R. 5091), introduced by Rep. Ted Budd, R-N.C., would require the Office of Management and Budget to maintain a database of every employee not excepted or exempted during a shutdown. The list would include the employees’ names, salaries and job descriptions, information that each agency would be required to submit to OMB. During two brief government shutdowns earlier this year, about 860,000 employees were scheduled to be sent home without pay. [govexec.com, Feb 28, 18] Another solution seeking a problem. How many new employees would be needed to manage that turbulent database?
President Franklin Roosevelt prophesied in 1938 when the world was much darker than it is today: “We observe a world of great opportunities disguised as insoluble problems.” [Michael Shermer reviewing Greg Easterbrook's It's Better than It Looks, 2018]
US officials have torpedoed a Chinese state-backed group’s plan to buy an American electronics company, signaling the Trump administration’s continuing skepticism toward Chinese investment deals, particularly those that involve transferring technological know-how. Xcerra (Norwood, MA; no SBIR), provider of equipment for testing computer chips and circuit boards, said this week that it was withdrawing from its $580 million sale to an investment group backed by a Chinese government-controlled fund. [Raymond Zhong, Wall Street Journal, Feb 23, 18]
Hope and hype. the White House Council of Economic Advisers (CEA) put out a detailed 568-page analysis of the Trump administration’s economic outlook. It predicts 3 percent growth through 2020, which would be 11 years into the latest expansion. “There's so much momentum in this economy,” said Kevin Hassett, chairman of the CEA, [Vicki Needham and Sylvan Lane, The Hill, Feb 25, 18] Hassett was a co-author of Dow 36000, well before the 2009 Great Recession dive.
Politics for grants. A senior adviser at the U.S. Department of the Interior will review certain grants and cooperative agreements of $50,000 or more to universities and nonprofit groups to ensure they “better align” with the priorities of President Donald Trump's administration. The move (without prcedent), follows a similar decision last summer by [EPA]. [Science, Jan 12, 18]
Subsidies lose favor. As New York's state Senate Republicans propose shutting down Start-Up NY, business leaders involved in the program say it's too early to call it quits. Start-Up NY, created by Gov. Andrew Cuomo in 2013, exempts qualifying businesses from taxes for 10 years when they expand or relocate to select college and university campuses. ... program approved 67 businesses in 2017. [Liz Young, Albany Business Review, Feb 20, 18] a number of legislative leaders and the state’s news media have been underwhelmed with the 408 jobs created by the program ... A case: Dr. Greg Galvin, cofounder of Incodema3D (Freeville, NY; no SBIR, founded 2001, a $10 million start-up investment financed mostly locally [Ijdavidhill, Ithaca Journal, Jan 21, 2015]) the first company certified within the Start-Up NY Program in 2014. The young company has grown from four initial employees to a staff of 30 over the past two years. ... Did Start-Up NY actually influence your decision to start Incodema3D? Dr. Galvin hesitated: “We would have started the company with or without Start-Up NY. But it certainly helped us succeed.” [Andrew Levine, Forbes, Aug 11, 16]
Getting what we want. Since the end of World War II, federal tax revenue has grown 15% faster than national income—while federal spending has grown 50% faster. [John Cogan, Wall Street Journal, Feb 21, 18] Our Congress cannot resist giving us what we want without our fully paying for it. What's more, the exploding defict estimates dramatically understate the full problem of promised retirement compensations for the future in both public and private pension plans.
Immigrants and their employers beware. The Senate could not reach a compromise immigration plan that the President would accept. Checks and balances in operation. In this case, the President is all-or-nothing to mollify his small political base, despite his personal preference of cheap immigrant labor in his businesses. If there is no compromise, then the President is free to execute wide and arbitrary arrest and deportation of whomever he chooses, subject to due process in immigration courts. The Republican political dilemma is that a large majority of the public supports the Dreamers while Trump holds them hostage to his other demands.
Cut small biz? Trump's fantasy budget cuts SBA 25%, unlikely to get past Congressional defense of beloved small biz. Also, The president’s budget says it will achieve its targeted Medicare savings through a host of vague reforms, the famous abstract asterisks of David Stockman, to avoid activating lobbyists. On the other hand, Lawmakers scoffed at the president's calls to slash funding across the government a year ago, and they're likely to do so again. [Russell Berman, govexec.com, Feb 13, 18]
A trillion here, a trillion there, and pretty soon you're talking real money.-- update of Everett Dirksen, Republican Senate leader half a century ago. White House Proposes $4.4 Trillion Budget That Adds $7 Trillion to Deficits [New York Times, Feb 13, 18] As Trump, self-anointed king of debt, proposes trillion scale deficits to a Republican Congress infested with deficit hawks and former fiscal conservatives. His novel infrastructure proposition presumes that the states have the same suicidal freedom for deficit finance to provide the matching funds for his federal largesse. How's your state fixed to get the federal money while watching state pension funds fall further behind?
Call to trade war. Trump also said he planned to announce as soon as this week what he called a ‘reciprocal tax’ on trade, aimed at countries that he said are taking advantage of the U.S. [Wall Street Journal, Feb 13, 18] 'taking advantage" is one of those things in the eye of the beholder.
Today, after the financial crisis, the shrinking of the middle class, the partisan warfare, a scarcity mind-set is dominant: Resources are limited. The world is dangerous. Group conflict is inevitable. It’s us versus them. If they win, we’re ruined, therefore, let’s stick with our tribe. The ends justify the means. The scarcity mind-set is an acid that destroys every belief system it touches. [David Brooks, New York Times, Feb 13, 18]
So far the corporate sector has responded to the 21% tax rates by announcing $86 billion of new stock buybacks and some ill-disguised PR ploys with respect to year-end "bonuses" that they would have largely paid anyway. [David Stockman's ContraCorner, Feb 9, 18]
Looser enforcement.“The Brand memo puts government contractors in a better position when negotiating and defending False Claims Act cases where they are accused of violating a government policy as part of a so-called conspiracy to defraud the U.S. government.” [Robert Pear, New York Times, Feb 10, 18] SBIR awardees are sometimes accused of fraudulent practices in accounting and reporting.
Dreaming Again. Making good on last year's promise to remake government "starting from scratch," the Office of Management and Budget signaled that Monday's fiscal 2019 budget proposal will include a shift from "tenure-based" civil service system pay to performance-based bonuses. [GovtExec, Feb 9, 18] A favorite conservative dream that government work can be economically valued. Last tried in Carter administration as Merit Pay and eventually abandoned as unworkable.
Perfect representation. There is no congressional appetite for spending control because there is no public appetite for it. [Peggy Noonan, Wall Street Journal, Feb 9, 18] The path of least resistance in politics is to give the people what they want, while concealing the burden that the people also have to pay for it. Thus, we have a huge tax cut (and mythical jobs) law and now a budget deal that spends even more. Enjoy the ride!
Too successful? The federal antitrust case against Microsoft started after states investigated the company’s conduct; Texas played a pivotal role in handicapping Standard Oil in the 1880s. The Sherman Act of 1890 followed and by 1911—before the Clayton Act was even passed—John D. Rockefeller’s pride and joy, the greatest company of its day, was lying on the floor in 34 parts. Knowing that a consultant in Washington refers to Amazon, Facebook and Google as “Standard Commerce, Standard Social and Standard Data” should make you shudder. [The Economist, Jan 20, 18] Capitalism left to its own devices would reproduce JD Rockefeller and JP Morgan.
An anti-missile test missed its mark, as have about half the tests since the system was declared operational. [Helene Cooper and Eric Schmitt, New York Times, Jan 31, 18] How do you feel about Trump's claim of 97% kill probabiility against NoKor launches? If a single kill probability is 50%, how many shots have to be fired to get a 97% mission kill probability? Do we have enough missiles and time to stop a multiple launch attack?
No president in living memory has spent so much time in their State of the Union address applauding himself. -- [Nicky Woolf, New Statesman (UK), Jan 31, 18]. Every rooster claims credit for a sunrise.
Language matters. Modern history’s two greatest war leaders were masters of the English language. Their pre-eminence rests not only on a genius for waging war but also a peerless gift for explaining why it needed to be waged. ... Lincoln’s prose, borne of his immersion in Shakespeare and the King James Bible, invested the Union cause with a moral majesty that sanctified a fratricidal conflict. Churchill later found another greatness by delivering on his promise that “history will be kind to me, for I intend to write it.” [Michael Bishop reviewing Lehrman's Deeply researched and elegantly written Lincoln and Churchill, WSJ, Jan 27, 18] "Fake news" will not inspire a people to greatness.
Marginal propensity to consume. Moody's says: we do not expect corporate tax cuts to lead to a meaningful boost in business investment, which has remained tepid despite a supportive economic environment characterized by low interest rates, low inflation and strong corporate earnings. We believe it is likely that US nonfinancial corporates will prioritize activities such as share buybacks, M&A and paying down existing debt over investment beyond that already planned. ... More than three quarters of the $1.1 trillion of individual tax cuts over 10 years is expected to go to those making more than $200,000 a year in taxable income. This group represents 5% of all taxpayers. These individuals are likely to spend a relatively small portion of their tax savings on current consumption, limiting the impact on the economy.” [Yuval Rosenberg and Michael Rainey, Fiscal Times, Jan 25, 18] The taxcut pushers choose to ignore or deny the realities of basic economics.
The Solar Energy Industries Association warned the [Trump America First] 30% tariffs will delay or kill billions of dollars of solar investments. [Bloomberg, Jan 23, 18] Meanwhile, Eleven Pacific Rim nations agreed to forge a new trade bloc excluding the U.S. [Wall Street Journal, Jan 23, 18] Not something a real-estate mogul would worry about when casting for votes from US workers [who may or may not be helped by the tariff. Tariffs are like a lot of other changes: you can never change just one thing.
Nuclear torpedo. A leaked copy of the Nuclear Posture Review appears to confirm that American officials are taking seriously Russian plans to develop an autonomous nuclear torpedo designed to destroy an adversary port and shower it in nuclear contamination. [Foreign Policy sitrep, Jan 22, 18] The genie is wriggling to get out of the bottle and devastate its inventors.
DOD's Innovation Board recommended several things to spur the adoption of innovation: Design a fast track for new technology initiatives; Start an incubator; Create an innovation + STEM career field; Establish technology and innovation training for senior DoD leaders. [Patrick Tucker, DefenseOne, Jan 17, 18] Great ideas for the likes of Google, where the Board's chair Schmidt excelled. But DOD has had thirty years and three wars with a possible startup program - SBIR - languishing in low return contracts with small private firms.
Trump celebrates his first anniversary in "America First" office by engineering a shutdown of his government, a tactic that he recommended many months ago.
“DoD does not have an innovation problem; it has an innovation adoption problem,” reads one of the new recommendations from the Defense Innovation Board. It even has an “innovation theatre” problem: the preference for small cosmetic steps over actual change. The advisory is chaired by former Alphabet chief executive Eric Schmidt. Their latest report suggests that the Pentagon too often tends to squelch its new ideas with outdated bureaucratic models and obsolete cultural notions. [Patrick Tucker, Defense One, Jan 17, 18]
Trade War? The last time Washington mobilized for a trade war, Ronald Reagan was president and Japan the adversary. ... Today, the White House is readying the same big guns—a mix of tariffs and quotas—aimed mainly at Chinese imports. ... A trade war isn’t a certainty, but if it comes, it will look nothing like the battles that raged in the 1980s over Japanese semiconductors, cars and TV sets. .... “A trade war is coming because of ideological zealotry and absolutely contradictory estimates of who has more leverage,” says Scott Kennedy, an expert on Chinese industrial policy at [CSIS]. [Andrew Browne, Wall Street Journal, Jan 16, 18]
Star Wars technology is coming not only to a theater near you, but to a job near you [via quantum computers]. We need to be discussing and adapting to its implications as much as we do Trump’s tweets. [Thomas Friedman, New York Times, Jan 16, 18]
Forth boldly , and back. Under intense pressure from the business community, the Trump administration appears to be backing away from a proposal that could have forced foreign tech workers out of the country. The U.S. Citizenship and Immigration Services (USCIS), said it was still conducting a thorough review of worker visa programs. But after McClatchy reported that the agency was weighing a specific law change that would prevent foreign tech-industry workers from keeping their visas longer than six years, the agency reversed course. [Franco Ordonez, McClatchy Washington Bureau, Jan 9, 18]
All against all. As Henry Kissinger has rightly observed, the internet has re-created the human state of nature depicted by 17th-century English philosopher Thomas Hobbes, where there rages a war “of every man against every man” and life (like so many political tweets) is “nasty, brutish, and short.” Those who favor a revolutionary world run by networks will end up not with the interconnected utopia of their dreams but with Hobbes’s state of nature, in which malign actors exploit opportunities to spread virus-like memes and mendacities. [Niall Ferguson, Wall Street Journal, Jan 5, 18]
I believe virtually everyone of prime working age who wants and is qualified for a job is already employed. thus I don’t expect corporate tax cuts to produce higher wages or robust job growth in a full-employment economy -- Howard Gold’s predictions [MarketWatch, Jan 3, 18]
---------------------------------------------------------------------- 2018 -------------------------------------------------
---------------------------------------------------------------------- 2017 ---------------------------------------------------
SBIR Insider, Rick Shindell, is back on the air reporting that although SBIR has been re-authorized until 2022, there are proposed changes afoot in two separate House [H.R.2763] and Senate [S1961] "improvement" bills about which there is no legislative agreement. One definite change is the end of the "pilot" programs. He also notes that the Congressional and Presidential struggles with Continuing Resolutions downscales SBIR's attention in the R&D agencies. And SBIR Insider email address has changed to email@example.com This and back Issues of the SBIR Insider are available at www.zynsys.com/sbir/insider
“NASA iTech is an innovation incubator that brings together the right people to the right place and time, giving entrepreneurs an opportunity to present their technologies as a future commercial market product solution for both Earth and NASA,” said Kira Blackwell, program executive for the Space Technology Mission Directorate at NASA Headquarters. Blackwell, also said the top 18 companies that have previously participated in NASA iTech have reported raising more than $50 million in private investments over the last 12 months. The top ten competitors for the grand prize: BioVirtua (San Francisco, CA; no SBIR) Humanizing Telehealth in Four Dimensions; FGC Plasma Solutions (Argonne, IL; no SBIR) Novel Fuel Injectors to Enable Clean, Compact Propulsion ; Germfalcon (Los Angeles, CA; no SBIR) Germicidal UVC Emitting Robot for Commercial Aircraft; H2 Energy Now (Boalsburg,PA; no SBIR) New Technology for H2 Generation from Water in Space by Use of Electromagnetic Waves; Hyperloop Tansportation Technologies (Los Angeles, CA; no SBIR, 500-1000 employees) Augmented Voyage; iFirst Medical Technologies (Honolulu, HI; no SBIR, founded 2016) The iFirst Analyzer: Handheld Laboratory-grade Diagnostics Platform for Extreme Environments; Million Concepts (Lemont, PA; no SBIR) The Arisian Lens: A Novel Solution for Low-cost, Lightweight Microscopy; New Frontier Aerospace (Livermore, CA; no SBIR, founded 2015) Affordable, Powered Recovery for Small Launch Vehicles; Rice Technology (Milwaukee, WI; no SBIR) Smart Real-Time Multipurpose Sensor - Dissolved and Suspended Solids, Bacteria, Phosphorus and Viruses; Somatic Labs (Phoenix, AZ; no SBIR, founded 2015) Tactile Interfaces for Augmented Reality to Enhance Communication.
If President Trump would read only two chapters of this book, he should read the one called “Tomorrow” and another titled “Confidence,” where Goldfield tells the real story of how to make America great again. But neither Trump nor any other Republican is likely to read this because, as Goldfield shows, government was the key that made America a colossus in the world economy and the generator of a robust middle class. [Elaine Kamarck reviewing The Gifted Generation: When Government Was Good By David Goldfield, WashPo, Dec 23, 17]
Buyer's Remorse on tap. The [new proudly conservative] tax law will have a tiny effect on economic growth after a decade, Congress’s official scorekeeper said. The Joint Committee on Taxation said that gross domestic product would only be 0.1% to 0.2% larger by 2027 thanks to the tax overhaul, which includes $1.5 trillion in tax cuts and is expected to add about $1 trillion in deficits. [Wall Street Jounral, Dec 22, 17] But the annual bill for interest on the bigger federal debt will expand income growth in bond buyers. It's the price the Republicans were willing to pay for the financial support by the extremely rich donors who threatened to dry up the money if not rewarded with tax cuts. One glaring conflict-of-interest beneficiary is the POTUS. The people will get their chance to vote on the deal next November.
University of Michigan team aims to create an unhackable computer with a new $3.6 million DARPA grant [one of nine that DARPA has recently funded through SSITH]. Todd Austin, U-M professor of computer science and engineering, leads the project, called MORPHEUS. Its cybersecurity approach is dramatically different from today's, which relies on software—specifically software patches to vulnerabilities that have already been identified. It's been called the "patch and pray" model, and it's not ideal. This spring, DARPA announced a $50 million program in search of cybersecurity solutions that would be baked into hardware. [Nicole Casal Moore, Michigan News, Dec 20, 17]
Thinking NASA SBIR January 11, 2018? NASA says We made the proposal submission process easier for you by creating a new system that will work with you, and not against you, so you can focus on submitting a winning proposal. Webinar Jan 9. See the guide. Beware: agency procedures are for the benefit of the agency. A helpful agency would be brutally clear about what it is looking for. Remember that at bottom there is no good substitute for being the very best at what you do, and that many, many companies already know the buzzwords NASA wants to hear.
Struggle, not age, criterion. After announcing a plan this May to award 400 additional grants each year to early- and mid-career scientists who fall within a specific definition, (NIH) decided to revise its funding strategy ... now aims to focus funds on researchers who are struggling to keep their labs afloat, regardless of age. “Age should not matter,” NIH Principal Deputy Director Larry Tabak said. For the NIH, this is the third shift in funding policy this year. [Katarina Zimmer, The Scientist, Dec 19, 17]
The National Security Strategy concocted by our adolescent real-estate mogul President as Defense One's Patrick Tucker reports, the NSS appears to give up on the idea that American ideals are themselves a competitive advantage. "Through omission, it signals U.S. retreat from the tradition of democracy promotion with an overt criticism of the theory of 'democratic peace,' the idea that democratic governments are more akin, and therefore more likely to act peacefully toward one another," Read on, here. .
Eating dessert first. In passing the tax bill and then promising spending cuts later, Republicans are attacking the GOP policy menu like their predecessors - dessert first, vegetables later. It's a replay of the experience under former President George W. Bush, who powered through tax cuts in 2001 and 2003 and the creation of a Medicare prescription drug benefit in 2003 as well. But when the agenda turned to cutting spending, particularly a 2005 bid to shore up Social Security, Bush flopped badly, while the tortured legislative path later that year to enact modest spending cuts of $40 billion over five years proved almost comically difficult. In the 2006 midterms, the GOP president and Republicans lost control of the House and Senate. [Andrew Taylor, AP, Dec 19, 17] The day will soon come for "Don't let the government touch my Medicare," nor my sacred science.
Rich kids patent more. The weight of the evidence suggests that the most effective way to generate new innovators is by reducing poverty, improving social mobility, and making sure that more communities can point to homegrown innovators for children to emulate. And there’s little reason to think the tax bill will help on any of those fronts. ... ... a team of researchers at the Equality of Opportunity Project, studied more than 1 million inventors in the U.S. to determine the factors that affect who ends up filing a patent ... “Becoming an inventor relies upon two things in America: excelling in math and science and having a rich family.” .... research has found that social welfare programs increase the number of people who start new businesses. [Walter Frick, Harvard Business Review senior editor, Dec 15, 17] Read the NBER paper.. but don't expect any help from Republicans; watch instead for attacks on those nasty "entitlements" to fill the deficit gap caused by the new great trickle-down tax cuts.
Good news: climate change is not a national security threat, says our President. Evidence? Better you shouldn't ask. And the trickle-down tax cut will more than pay for itself. In both cases the majority of experts say the opposite. You judge for yourself on who speaks the truth.
Jackpot for POTUS. Trump is about to hand corporations -- which are already making high profits by historical standards -- a giant tax cut. The bill “addresses problems we don’t have, and makes existing problems worse,” said Alan Krueger, an economics professor at Princeton University. “Especially the deficit, inequality, health care, and infrastructure investment.” [Craig Torres and Jordan Yadoo, Bloomberg, Dec 15, 17] See it from Trump's perspective: he gains a billion dollars while telling his base that he is fighting for their economic and cultural cause, and while they don't seem to notice the disconnect.. In fact: “If enacted, the commercial real-estate industry will have hit the jackpot,” said Steven M. Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.
Paying the supporters. The proposed tax cuts are paid for by bigger budget deficits, a fiscal stimulus that is ill-timed given the business cycle. But the tax cuts favour companies (which in aggregate are generating bumper profits) or rich individuals (who save more of their income). That means the ripple effects from the stimulus are likely to be small. [The Economist, Dec 15, 17] Responsible governments use deficit spending to some useful purpose, typically to rally a sunken economy; irresponsible governments use deficits to bribe supporters. Trump Inc, self-professed Master of Debt and serial liar, does the latter while claiming the former.
Wishes Trump science. Trump administration gives CDC a list of forbidden terms, including fetus and transgender. Instead of “science-based” or “evidence-based,” the suggested phrase is “CDC bases its recommendations on science in consideration with community standards and wishes,” one analyst attending a meeting with senior officials said. [Lena H. Sun and Juliet Eilperin, Washington Post, Dec 16, 17]
Your SBIR manager distracted? The Trump administration’s consideration of a wage freeze for federal employees is one piece of a renewed multifront Republican push to shrink those workers’ pay, benefits and workforce. .... Now, with James Sherk — a chief proponent of the notion that federal workers are overpaid — serving as Trump’s labor adviser, the proposals stand their best chance yet of becoming policies that dig deep into federal employees’ pockets. [Joe Davidson, Washington Post, Dec 17, 17] Trump apparently believes that the best government is one operated like a for-profit buiness, especially his. The civil servce however is a service, not a profit center; it executes the laws enacted by the Congress in accordance with the rules also set by Congress. The President does not have the power to change those laws or the mandated rules.
A spokesman for the Defense Department has said defense contractors must have “system security plans” in place by Dec. 31 to comply with the NIST federal data protection regulations, Defense One reported [GovConWire, Dec 14, 17]
Tax Bill last call. Republicans in the House of Representatives have passed a bill that would prevent many graduate students in the U.S. from pursuing advanced degrees. Writing for MIT Technology Review, climate researcher Ken Caldeira says that's an awful idea. [technologyreview.com, Dec 12, 17] Apparenly, the fix is in as the big donors get what they demand; finals details pending.
With enough assumptions, ... Treasury produced a report that purported to support the administration’s conclusions [on GOP tax plan]. It was, in fact, a one-page news release containing no actual analysis or data, just fairy dust. Rather than calculating the growth rate produced by the Senate tax plan, or any tax plan at all, the release merely . . . assumed a big growth rate. Then it said that if that growth rate happened to materialize, the plan would produce a whole lotta revenue. Enough to plug a big budget hole, even! [Catherine Rampell, WashPo, Dec 11, 17] Trickle-down is a hard sell to realist economists despite piles of money boosting the politics.
Where you stand depends on where you sit. During his election campaign, President Trump frequently described the jobs numbers as “totally fiction,” “a complete fraud” and “phony numbers.” But after assuming office, amid reports showing strength in the economy, Mr. Trump said, “They may have been phony in the past, but it’s very real now,” according to an account by Sean Spicer, the former White House press secretary. [Justin Wolfers, New York Times, Dec 10, 17]
Adding to the national debate regarding U.S. immigration policy, the Center for American Entrepreneurship (CAE) reviewed the 2017 Fortune 500 list, finding that 43 percent of the companies were founded or co-founded by a first or second generation immigrant. Those companies account for 52 percent of the top 25 firms, are headquartered in 33 different states, and accounted for $5.3 trillion in global revenue in 2016, the CAE analysis found. [SSTI, Dec 6, 17]
The National Endowment for the Humanities awarded $300,000 to the Denver Museum of Nature & Science as part of NEH’s Sustaining Cultural Heritage Collections program[to] support a three-year project to sustainably preserve 72,000 objects from the Museum’s archaeology collection. [Museum press release, Oct 27, 17] Look in the latest tax bill for a hidden line item canceling NEH which the troglodyte Republicans detest.
Military innovation barrier. our defense and intelligence agencies were built to efficiently and constantly apply resources to ensure the security of our country. The systems that make this possible are not capable of sustaining an innovation ecosystem – nor should they be expected to. In execution organizations, the important metrics concern the efficient use of limited resources. People, vision, culture, and systems are optimized to do more with less. Duplication and redundancy are signs of inefficiency that must be corrected. Failure is to be avoided at all costs. Within such systems, innovation has no seat at the budget table, few resources, and no friendly metrics. ... Nor is there an incubation phase that might refine ideas before sending them for execution, which often results in the delivery of immature solutions into a system that is already overburdened just trying to maintain the status quo. [Pete Newell, Defense One, Dec 4, 17] Innovation blooms on the battlefield when the enemy starts stinging the conventional force. MRAPs, anti-IED robots, dogs, drones, pagers in Desert Storm, etc.
Government scientists working at U.S. defense laboratories will soon have an opportunity for up to $500,000 per year if their research is a commercial success. Congress hopes the raise will prod the military to do a better job of commercializing discoveries that have civilian as well as battlefield uses. ... creates a 5-year experiment that more than triples the annual royalty payments—now capped at $150,000—that DOD inventors can collect on their patented inventions. [Jeffey Mervis, Science. Nov 24, 17]
NASA says it is modernizing its SBIR. streamlining complex processes where possible, enhancing the Solicitation, and upgrading our system so that you can focus on submitting a quality proposal to get your innovation into NASA’s missions and into the commercial market. The new system is more modern, intuitive, and user-friendly. Smoother road to the same safe mediocre projects?
Senate Republicans, in their push to pass a sweeping tax bill, undermined a research-and-development tax credit many companies use to encourage innovation, and business interests are in revolt. [Richard Rubin, Wall Street Journal, Dec 3, 17] They had to find money to meet their wholly arbitrary $1.x trillion addition to the national debt over the next decade. Their great deal so far is full trickle-down like Reagan and W's tax plans that have contributed to the growing economic inequality analyzed by Piketty and others. Whatever the final tax law, those affected will find new ways to circumvent the limits and upset the economic and political calculations. But in the future years, the economy will have so many drivers that no definitive good or bad economic outcome can be credibly attributed to the great 2017 tax reform. The partisan politics of that future time will swamp any historical analysis.
Biomedical engineers at Duke have created a fully functioning artificial human heart muscle large enough to patch over damage typically seen in patients who have suffered a heart attack. The advance takes a major step toward the end goal of repairing dead heart muscle in human patients. [Raleigh newsobserver.com, Nov 30, 17]
CEOs (“the most excited group out there,” according to the bill’s architect, Gary Cohn) have given away the game in earnings calls by admitting that the corporate tax cuts, easily the largest chunk of the bill, would flow out to shareholders in dividends and stock buybacks, rather than used to create jobs or raise wages. [David Dayen, The Nation, Nov 28, 17] Never mind; the promises and the logical disconnects are needed to paint the necessary scrim to cover the barely majority political consent to economic wishful thinking. But the politicians are safe because the economy is so big and so varied that any future blame will be washed away in cherry-picking the enormous economic data. And future elections will still focus on emotion-stirring cultural issues that got Trump elected.
Quiet oil-fueled Texans. For 300 million years faults showed no activity, and then wastewater injections from oil and gas wells came along. In Texas, sixfold increase in quakes since 2008, yet the Texas government has not officially accepted the link to one of its most lucrative industries. [Anna Kuchment, Scientific America, Nov 24, 17]
Safety first. when scientists must get their very salaries, and universities their operating funds, from individual grants, a conservative, defensive, safe, assembly-line, and eventually sclerotic system that always promises future miracles is as inevitable as sunrise. It’s what we have today. ... If changes in the research funding system relieved investigators from the relentless scramble for funds, they could be freed to do truly creative work. [Kenneth Weiss, Issues in Science and Technology, Fall 2017] All of which is true but impossible to avoid when public funds are sought. The taxpayers representatives would rather report something good almost all the time than an ocasional Eureka inventing the transistor or DNA.
With the Senate poised to begin consideration of the Republican-authored tax overhaul proposal this week, a new coalition of small business leaders wants to put lawmakers on notice that most of them don’t like the proposal. Businesses for Responsible for Tax Reform is touting a poll today, shared first with McClatchy, showing 51 percent of small businesses oppose the plan, while 34 percent expressly support it. (Sacramento Bee) [Nov 27, 17] The main question is how much will the Senators have to give up to keep their big tax cuts for their rich contributors who are unhappy with the delays.
ten months into his presidency, Donald Trump has yet to name a science advisor. [technologyreview.com, Nov 27, 17] If science matters not to governing philosophy, a science advisor would just be a political liability.
Economic nationalism is real, and while it will disappoint its backers, it presents a serious danger to Washington state [which]which proudly claims to be the most trade-intensive state in the union. ... The policymaking giants after World War II believed that the conflict and its roots were partly found in the beggar-thy-neighbor trade stances of nations after the First World War. ... “America First” also threatens the openness that has made Seattle a magnet for international talent. [Jon Talton, Seattle Times, Nov 18, 17]
A better small biz tax deal. What [Sen]. Johnson needs is to treat more favorably small businesses and other so-called pass-through entities — businesses whose profits are distributed to their owners and taxed at rates for individuals. Such entities account for more than half of the nation’s business income, and the senator says the tax bill would give an unfair advantage to larger corporations. [Jim Tankersley,New York Times, Nov 18, 17] Small biz asks for breaks; big biz buys their breaks. As Chris Collins, a Republican representative from New York put it: “My donors are basically saying, ‘Get it done or don’t ever call me again.’” .... elections have consequences, and Republicans have never hidden their desire to cut taxes. They now have the power to do so. But it would be a mistake to exercise that power. Tax cuts for the wealthy would not alter the supply of special things to be had. [Robert Frank, New York Times, Nov 18, 17] In the final vote, as always in politics, where they stand depends on where they sit.
The myth; the answer. Kimberly Clausing is an economist at Reed College who studies the impact of tax cuts on economic growth. KIMBERLY CLAUSING: A lot of what's holding back investment right now has nothing to do with a scarcity of after-tax profits. In fact, if you look at multinational firms, most of them have record-high after-tax profits compared to earlier years or earlier decades. Instead, what seems to be holding back investment is lack of good investment opportunities. [NPR, Nov 17, 17] On the other hand: Good economists know that the correct answer to any question in economics is: it depends. [Dani Rodrik, The Guardian, Nov 16, 17] Meanwhile, the battle will rage to justify tax breaks for the already wealthy who will be expected to continue financial support for the Congresscritters. We do, after all, long for the best government money can buy. And for the moment the administration topped by a serial fact inventor has the megaphone.
A revised U.S. Senate tax bill has ditched a change in the treatment of stock options after an outcry from technology startups. [Jim Puzzanghera, Los Angeles Times, Nov 15, 17] Like a mystery novel where clues have to be discovered about a conspiracy after a cabal of "political leaders" presented a take-it-or-leave-it tax bill. Open debate by elected representatives was thought too much a danger of reality infusion by the unwashed masses.
A proposed tax that charges people as their startup equity vests instead of when they cash it out and actually have money to pay the taxes could wreck how tech companies recruit talent. ... The proposed tax could prevent wide swaths of tech employees from accepting stock options and RSUs. [Josh Constine, techcrunch.com, Nov 14, 17] Republicans, desperate to pass tax cut for angry wealthy donors, twiddle with everyone else's programs, down to even the lowly citizens needing medical insurance help. It's delivery time for Republican politicians' promises. Meanwhile, unfortunately for them, their allegedly Republican POTUS cannot be predicted from hour-to-hour.
Facing the evidence. “Three 500-year floods in three years means either we’re free and clear for the next 1,500 years,or something has seriously changed.” said Judge Ed Emmett, the chief executive of Harris County [Texas] ... And [Houston conurbation] built on an upbeat, pro-business strategy of low taxes and little government, relies heavily on American taxpayers providing government tax credits, mortgage interest deductions, gas subsidies, artificially low flood insurance rates, highway construction money — and emergency relief, including buying out homeowners to remove their properties from harm’s way. [Michael Kimmerman, New York Times, Nov 11, 17]
Senate rolls out its secret magic tax plan. It's a Republican self-inflicted wound in an effort to reward large political donors [and a real estate mogul POTUS] with some lower taxes basically by claiming large economc rewards and borrowing enough to fill the gap in revenue without taking much away from present voting constituencies for various government programs. First, they promised that everyone would be a winner, and then the details of harming present voters forces even more imaginary economics claims. Stand by for window-dressing change. The big donors seem to ignore the reality that politicians have to get elected by real people who want things from government [like SBIR] but cannot afford to pay for them all. The politicians basic mistake is pretending that fixing taxes will change much; the best tax program is one that balances demands among constituents and is left alone so investors can make rational decisions on long term investment.
Steven Walker, formerly deputy director and acting director at DARPA has been appointed to lead DARPA full-time. He succeeds Arati Prabhakar, who left DARPA in January and now serves as a fellow at Stanford University’s Center for Advanced Study in the Behavioral Sciences, the agency said. [Scott Nicholas, executivegov.com, Nov 8, 17]
Small biz myth. A key moment in the modern myth-making around small business came in 1978. That’s when MIT economist David Birch published claims – which he repeated in testimony before Congress – that small firms had accounted for 80 per cent of all new employment opportunities between 1968 and 1976. Critics quickly pointed out that Birch’s findings were quite wrong, largely because he defined firm size according to how many employees worked in a given location (like a branch office, factory, or store), not how many the firm employed altogether. In fact, most job creation, in the 1970s and today, comes from a small number of very fast-growing firms, while most small firms either fail (killing jobs) or remain small. Birch later admitted that the 80 per cent figure was a ‘silly number’, but the claims took firm root in popular mythology and political rhetoric by the 1980s. [Benjamim Waterhouse, Aeon, Nov 8, 17] SBIR was invented in 1982 on a fair-share argument that the federal government should have the same percenage of small prime contractors as does industry. The political myth has survived the reality that SBIR cannot justify its existence on any economic return or growth criterion. So, like most government programs it runs on inertia and political fear of change.
Major proposed budget cuts to the Homeland Security Department’s tech research division could leave the nation more vulnerable to emerging cyber threats, a former leader of the division said. President Donald Trump’s 2018 budget proposal cuts research and development funding for Homeland Security’s Science and Technology Directorate by 27 percent and cuts the overall division by about 20 percent. [Mark J.Terrill/AP, Nov 7, 17]
A tax credit that allows biopharma companies to recoup some of the cost of developing drugs for rare diseases could be abolished if a Republican tax reform bill goes through. As it stands, companies can claim a tax credit of 50% of the costs for clinical testing required by the FDA for drugs that treat rare diseases, a policy that has been in place ever since the 1980s when the Orphan Drug Act was enacted to encourage research into new treatments for diseases affecting fewer than 200,000 people. [Phil Taylor, Fierce Biotech, Nov 3, 17] The tax bill is a facade for easing taxes on the wealthy at the expense of any opposing political constituencies like large Demo-voting states. And with the economy stimulating gift of $1.5 trillion in new government debt. With, of course, economics fig-leaf fantasies of great economic growth promises.
Money talks, still. The heirs of wealthy people and business owners in low-tax states are among those most likely to benefit from the tax overhaul proposed by Republicans in the House of Representatives. [Wall Street Journal, Nov 3, 17] The rest of us will absorb a $1.5 trillion increase in the national debt over the next decade. The biggest winner will be the so-called populist President elected by downtrodden under-employed white nationalists who will get nothing from it.
President Trump will nominate Michael Griffin, former NASA administrator, as principal deputy defense undersecretary for acquisition, technology and logistics, Reuters reported. [GovConWire, Oct 24, 17] Mike was for a time my boss's boss at Star Wars and he let us run SBIR as we saw fit.
Already got the best. the reality is that we have the best tax code money can buy. Billions of dollars have been spent on lobbyists and by lobbyists to fashion the tax code to meet the special interests of special interest groups. It’s hard to imagine that Trump will be signing a tax reform package that will significantly reduce the complexity of the tax code. [economist Ed Yardeni, Oct 27, 17] their latest installment of trickle down fairy dust [economist Jared Bernstein] Stand by for a hurricane of economic puffery on the upside of tax cuts to anyone except the direct beneficiaries.
Credit and blame. as the most senior military leader in the U.S. chain of command, should responsibility fall to the president no matter what? Experts argue that the answer is unequivocally yes. .... But [Trump] told reporters that he wasn’t the one to specifically order the Oct. 4 mission in Niger that killed four U.S. soldiers [Willa Frei, HuffPost, Oct 26, 17] The military has a simple rule: The commander is responsible for everything the unit does or fails to do. Of course military operations are dangerous and some people will get killed and wounded because the enemy has a role in every plan. Trump could study Eisenhower as commander. There is also a fairness idea that if you deny responsibility for what goes wrong, you cannot accept credit for what goes right.
There is a huge gap between what Americans want from government and what (so far) they've been willing to pay in taxes — the gap being persistent annual deficits. ... the typical response of politicians both left and right [is that] They take refuge in familiar proposals that please their supporters but evade the new economic and social realities we face. [Robert Samuelson, Washington Post, Oct 23, 17] We are about to enter the 2018 chapter of fantasy economics that makes the deficits disappear eventually (when all present office holders have retired with a nice pension). Meanwhile, the demand for money to pay for pension and health benefits is increasing rising for the next two decades while the money needed is increasingly drifting into the wealthiest wallets which politically demand to pay less and less tax.
“The G.A.O. study is conservative, it’s not alarmist, it’s realistic and balanced and they go out of their way to point out all of the uncertainties involved,” [Robert N. Stavins, an economist at Harvard University] said. “I don’t see any likelihood it’s going to be taken seriously.” [LISA FRIEDMAN, New York Times, Oct. 23, 17] GAO's accountant/auditors rely on evidence, unlike many of the participants in the climate wars.
The US Senate voted narrowly to hand the rich $1.5 trillion in tax reductions for a decade. Several economists may well have been injured falling down laughing at the math. But then, Congress is no place for economists and mathematicians.
Farm-tech company SomaDetect (Canada) that helps farmers detect and then treat illnesses in cows won the [$1M] grand prize in [New York] 43North competition. ... CEO Bethany Deshpande said the company expects to create 25 jobs this year. [Buffalo Business News, Oct 6, 17] patented technology uses light scattering to assess every major compound of interest from raw milk in real time [company website]
The U.S. House this week passed H.R. 2763, which would amend the SBIR and STTR ... would extend or implement activities within SBIR/STTR, nearly all of which would improve the programs’ ability to support commercialization in parallel with technological development. .... would create a new initiative that effectively allows a small business to receive a third Phase II award that can be used for R&D only, so long as the company has developed a new commercialization plan and is backed by external funders ... would make permanent this pilot program, which allows all non-defense agencies to use up to 10 percent of their SBIR/STTR funds to essentially supplement Phase II or III awards, and awards made under this program can be up to three times larger than a standard Phase II award. [SSTI, Oct 11, 17] What's the folly in all this law? The agencies have no incentive to pick good market prospects in whom to invest for government and market use. The soothing sounding commercialization programs are an after-thought for the agencies, not a competitive criterion.
I have never heard someone say, ‘I would have started a company, but tax rates were too high’ or ‘I wouldn’t have started this company, but then George W. Bush cut tax rates, so I did.'— Silicon Valley entrepreneur Marcus Ryu. [quoted by technologyreview.com] Never mind, the taxcutters have no bounds on their imagination of economic miracles to follow cutting taxes on the top wealth.
Defense Secretary Jim Mattis said the U.S. is using diplomacy and economic pressure to turn back North Korea’s nuclear weapons program, but cautioned a gathering of Army officers and troops that they need to be ready in case negotiations fail. [Wall Street Journal, Oct 9, 17] This Army always has its bags packed, ready to go. How long it can keep recruiting worthy volunters for permanent war remains to be seen. The US ability to move a large force anywhere in the world with the right equipment remains a temptation to do so. And now we have a POTUS with no obvious strategic sense of appropriate deployment and mission.
My debt good, yours bad. The problem confronting those who want the government to reduce annual deficits is that the short-term consequences of profligacy have proved to be very modest, while the political benefits are substantial. “It doesn’t take a political scientist to understand that taking stuff away is a lot less popular than giving stuff out,” Mr. Goldwein said. [Binyamin Appelbaum, New York Times, Oct 4, 17]
moving forward, the [Army] will establish a new way to quickly procure new technology, breaking free of the normal acquisition process that is so slow, by the time technology makes it into warfighters' hands in the field, it's considered old." [DefOne, Sep 29, 17] details to follow, sometime
The power and influence of governments is decreasing because of the tremendous power of social networks and economic trends. There’s some problem in the pension funds in Spain, and the whole world feels it. I think these kinds of trends affect us much more than the decisions made in Washington and other capitals. [Ray Kurzweil, technologist now at Google, Fortune, Sep 28, 17] US Government is moving inexorably into re-distribution of wealth, not its creation.
When people are angry and looking for someone to blame, they don’t want to hear your 10-point plan to create jobs and raise wages. They want you to be angry, too. [Hillary Clinton, What Happened, Sep 2017] Clinton’s failure owed less to the merits (or demerits) of her particular policies than to her campaign’s lack of focus on the depth of the economic difficulties so many Americans face [E. J. Dionne Jr., Norman J. Ornstein and Thomas E. Mann, ONE NATION AFTER TRUMP A Guide for the Perplexed, the Disillusioned, the Desperate, and the Not-Yet Deported, Sep 2017] The armchair pundits of Twitter and Facebook will, of course, have their pithy and shallow rantings.
Another Startup Dream Machine. Four Senators introduced the Startup Act – legislation that would help regions throughout the country address critical gaps between R&D and economic prosperity. ..... [Senators Roy Blunt] saying “The Startup Act will make it easier for entrepreneurs to start and grow their businesses, resulting in more good-paying American jobs. ... The size of the program would be relative to the federal extramural R&D budget, which is difficult to quantify in advance, but would essentially be about 4 percent the size of SBIR funding, which was $2.3 billion in FY 2015. .... To learn more about the bill and to find out how you can encourage your delegation to support the Startup Act, contact SSTI today at 614-901-1690 or firstname.lastname@example.org. [SSTI, Sep 17, 17] Innovation makes a wonderful political talk subject; everyone is for it and no one closely defines it. But government handouts have a poor record of actually spurring innovation. All politically inspired innovation ideas ignore the ugly reality that new market competition creates losers and job losses.
Supply-side redux. Treasury Secretary Steven Mnuchin said a sweeping GOP tax overhaul would generate more than enough economic growth to offset the cost, pressing the administration’s argument that the plan would pay for itself. ... The plan offers no concrete details about how officials expect the tax plan will produce higher growth rates. And key pieces of it remain unwritten., [Kate Davidson, Wall Street Journal, Sep 28, 17] Meanwhile, Treasury Department has taken down a 2012 economic analysis that contradicts Secretary Steven Mnuchin’s argument that workers would benefit the most from a corporate income tax cut. The 2012 paper from the Office of Tax Analysis found that workers pay 18% of the corporate tax while owners of capital pay 82%. [Richard Rubin, Wall Street Journal, Sep 28, 17] Economics has not changed since 2012, nor have the outlandish political promises.
Oh, horrors: debt and deficit. Throughout Barack Obama’s eight years as president, Republicans hammered relentlessly at the horrors of debt. In 2011 they took the country to the brink of default because they didn’t want to raise the statutory debt ceiling. Last year candidate Donald Trump repeatedly ripped Mr. Obama for doubling federal debt. Yet in their drive to overhaul taxes, President Trump and his congressional allies are about to make the trajectory of debt even worse. .... Not to worry, though Lower tax rates will unleash so much new economic activity and thus added tax revenue that, contrary to history and mainstream economic opinion, the debt actually won’t rise much, if at all. .... There is little evidence from the last few decades that a tax rate cut raised underlying growth in the U.S. or any other advanced economy anywhere near that amount, once the vicissitudes of the business cycle are factored out. [Greg Ip, Wall Street Journal, Sep 28, 17] Why trot it out again? The Pres wants his taxes cut as do the high rolling donors who are not getting the dead Obamacare they paid dearly for.
Anti-drone ideas sought. [DARPA] asked industry to provide information on novel technology platforms designed to counter small unmanned aerial systems. A request for information posted Wednesday on FedBizOpps says DARPA is interested in modular and scalable platforms that work to identify and target small drones and could complement systems that are still in the development phase under the agency’s Mobile Force Protection program .... seeks novel tech platforms in the areas of sensing and neutralization that work to detect and destroy small UAS at a distance of at least 1 kilometer and can be integrated with tactical ground vehicles. [http://blog.executivebiz.com, Sep 25, 17]
The House science and small business committees jointly advanced an SBIR/STTR bill [H.R.2763 - Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017] that would extend the “admin pilot” program to support applicant outreach and Phase 0 programs, bolster reporting requirements and create a new commercialization grants program [with follow-on Phase II matched by third party commercialization investment]. To date, the Senate has not introduced SBIR legislation this session. [SSTI, Sep 20, 17]
Leap in the dark. Having lost the debate for modification of Obamacare, the desperate Republican thin majority wants to leap into a dark place of a program that has had no serious thought and debate - a turnover of health care to the states who have no organization in place to accept it. The one sine qua non - cut taxes for the wealthy, healthcare mayhem aceptable.
Trade deficit dollars re-cycled. Wisconsin Gov. Scott Walker signed a bill Monday that would give Taiwan’s Foxconn Technology Group $3 billion in economic incentives to open a mega-plant in the state. Foxconn plans to invest $10 billion to build a 20 million square-foot campus in southeastern Wisconsin that could employ up to 13,000 workers over a period of six years. The facility would build liquid-crystal display technology, or LCD screens. [Shayndi Raice, Wall Street Journal, Sep 18, 17]
DARPA released broad agency announcements to seek research proposals for six new programs under the Electronics Resurgence Initiative. ERI is a program that will allocate $75 million in fiscal 2018 funds to support research efforts across the six new programs in the areas of system architectures, materials and integration and circuit design over the next four years, DARPA said Wednesday. [GovConWire, Sep 18, 17]
The U.S. political system isn’t broken. It’s working exactly the way the two main parties designed it. That’s the conclusion of a new Harvard Business School study. Authors Katherine Gehl, former president and CEO of Gehl Foods, and Michael Porter, a professor at the school, apply business theory to the U.S. political system and find an industry that works for Democratic and Republican organizations, big donors, pollsters, consultants, partisan think tanks, the media and lobbyists, but ignores most American citizens. [Jeffrey Sparshott, Wall Street Journal, Sep 14, 17]
Wonderland wish of the day: OMB Director Mulvaney about tax reform, economic growth and deficits: “In order to get the size — the magnitude of the reductions that we want in the corporate and the individual rates and in order to get the sweeping reforms that we so desperately need — you absolutely will see an increase in the deficit in the short term. But the payoff in the long term is actually that promise of balanced budgets.” [Yuval Rosenberg and Michael Rainey, Fiscal Times, Sep 12, 17] Borrow today, balance tomorrow: the promise of every conservative politician for at least thirty years.
Six months later, Congress has not only rejected the president’s N.I.H. [22% budget cut] proposal; lawmakers from both parties have joined forces to increase spending on biomedical research — and have bragged about it. [Robert Pear, New York Times, Sep 11, 17] Trump still has the option of vetoing the appropriation bill, but neither he nor his HHS hatchetman has offered any rational basis for their choice of research level. He could say that there is no such thing as an optimum research funding level; buy more, get more. The research system generates growing demand by graduating more and more PhDs with perfectly good proposals for research employment.
Humor the poor dear. multiple psychologists offered [Japan Prime Minister] Abe advice for handling Trump: “no matter what Trump says, one should always express approval before any signs of disagreement,” and “never refer to a topic that is unknown to Trump.” .... the preparations seemed to pay off: the personal rapport continued, and Trump apparently made no further complaints about the trade deficit, currency manipulation, or the cost of maintaining U.S. forces in Japan. [Takado Hikotani, Foreign Affairs, S/O71]
Launch New York, Inc. (Launch NY) is a 501(c)(3) venture development organization whose mission is to identify, support and invest in high-growth, high-impact companies and catalyze the entrepreneurial culture to drive job and wealth creation in the 27 westernmost counties of Upstate New York. ... designed to provide $25,000 to $100,000 in investment capital to companies. [http://www.launchny.org/]
Ditching the corporate memory. Buyouts offered by the Trump administration to more than 1,200 Environmental Protection Agency (EPA) employees have prompted 400 people to leave their posts since the end of last month, The Wall Street Journal reports. This mass exit has resulted in a 2.5 percent cut in the agency’s staff, the report states, and if workers continue to take the buyouts, the EPA could be facing its smallest operating staff since the late 1980s. The majority of the deals presented to employees consisted of buyouts or voluntary early retirement for eligible employees, according to an E&E News report from earlier this summer [Aggie Mika, TheScientist, Sep 6, 17] Even the phrase "climate change" is being forcibly retired in a wholesale denial of even the possibility that the latest record-intensity huricanes are a "climate change." The ditched employees remember what has been done and the state of the art in government handling of the enivornment.
Good, bad, necessary government. we have been wary of too much government activism. This is true not just in tackling climate change but in other areas that have contributed to the storms’ destructive power. Houston chose not to have any kind of zoning that limited development, even in flood-prone areas, paving over thousands of acres of wetlands that used to absorb rainwater and curb flooding. And now, of course, low-tax and low-regulation Texas has come to the federal government, hat in hand, asking for more than $150 billion to rebuild its devastated state. [Fareed Zakaria, WashPo, Sep 8, 17] And the Republican approach is that lowering taxes on the rich will shrink government and empower Texas, among others, to cater to profit-making. And then ask the rest of the nation to bail them out of their neglect.
Redux city-state? Power in the 21st century belongs to the problem-solvers. National governments debate and mostly dither. Cities act, cities do. Power increasingly comes from the cities up, not handed down from the nation-state.’ .... the nation-state with its borders, centralised governments, common people and sovereign authority is increasingly out of step with the world. And as Karl Marx observed, if you change the dominant mode of production that underpins a society, the social and political structure will change too. [Jamie Bartlett, Aeon, Sep 1, 17]
Perhaps a coincidence, but since [Former TX Gov] Perry took the reins at DOE, its SBIR/STTR program has been glacially slow.DOE has now postponed its LOI [for SBIR/STTR] due date indefinitely. [Greenwood Consulting, Aug 30, 17] It's all part and parcel of Trump's brainwave of shrinking the federal government, which will not happen unless Congress makes it happen. Unlike Trump, Congress listens to everybody.
A 2014 study by the Congressional Research Service put it this way: ‘A review of statistical evidence suggests that both labor supply and savings and investment are relatively insensitive to tax rates.’” [Robert Samuelson, The Fiscal Times, Aug 28, 17] Which dispels the Republican myth that tax cuts for the rich will generate growth and investment. But the rich are still willing to "invest" in lobbying for tax cuts anyway since the growth was just an apparently credible rationalization for the gullible.
Iowa subsidy. The Iowa Economic Development Authority (IEDA) has developed a program to help fight the loss of skilled tech professionals who are leaving the state to find employment elsewhere. Their program provides grant funding through student internship programs that match intern wages paid by a company dollar for dollar. The program targets industries such as bioscience, advanced manufacturing, and information technology, and is beneficial to startups that can’t compete with the pay of other well-established companies. Complete statistics for the year 2016 show that IEDA awarded 98 companies with grants, totaling 241 internships. 33% of eligible interns for hire were offered full-time positions and 23% of those offers were accepted. [Christine McGuigan, Silicon Prairie News, Aug 23, 17] Free market ideologies are not the only Midwest ideas.
Stopping change. The National Institute of Environmental Health Sciences (NIEHS) made several changes to its website in the past few months, some of which altered mentions of “climate change” to read simply “climate,” according to the Environmental Data & Governance Initiative Website Monitoring Report released last week (August 20). [Bob Grant, the-scientist.com, Aug 23, 17] Disproving Mark Twain's remark that everyone talks about weather but no one does anything about it. Trump commands climate change to disappear.
The federal government now spends a significantly lower percentage of GDP on research than it did in the 1960s and 1970s and has particularly stinted research in essential fields such as the physical sciences, mathematics and computer science, and the environmental sciences. [L Rafael Reif (MIT president), Foreign Affairs, M/J2017]
Q and A remain
In announcing his [war]
Trump became the third consecutive American president to be confounded
by the conflict in Afghanistan, now the longest military operation in
the history of the United States. ... “It didn’t work then,” said John
Dempsey, a former senior State Department official who worked on
Afghanistan and Pakistan. “And it especially won’t work now.”
.... The president heaped contempt on his predecessor’s strategy,
promising that he would avoid President Barack Obama’s mistakes. But in
substance, Mr. Trump’s strategy was not all that different from Mr.
Obama’s, relying on a mix of conventional military force and diplomatic
pressure on Pakistan. [JULIE HIRSCHFELD DAVIS
LANDLER, New York Times, AUG. 21, 2017] In the cold light of
Oval Office, mere bluster won't sell where lives are at stake.
Forecasters in The Wall Street Journal’s monthly survey of economists see on average a 22% chance of the government shutting down at the end of next month and a 17% chance that the U.S. Treasury will, at least temporarily, skip making payments on obligations such as government payroll or issuing Social Security checks to manage looming funding challenges. [Josh Zumbrun, Wall Street Journal, Aug 10, 17] SBIR awardees may see a stoppage in payment processing as OMB/Treasury allocates available cash to high priority activities.
What Team Trump needs to do to get the [NAFTA] trade position right is not that hard to understand. Strengthening the U.S. industrial base is the right objective. But you do this with policies that push industry and the work force up the technology and skill ladders exactly as the Japanese have, especially since the 1980s. The Japanese survived the swift rise of the Koreans, Singaporeans, and now the Chinese. That’s no mean accomplishment given Japan’s cost structure. How’d they do it? Automation and training with full-tilt policies behind them, simple as that. [Patrick Smith, thefiscaltimes.com, August 18, 2017]
Trump portrays [trade] it as a zero-sum game, an understandable perspective for a casino owner and businessman: gambling is the quintessential zero-sum game. But it is dead wrong as a way to think about the role of trade in an economy. Trade is actually a two-way street—the exchange of exports for imports—that makes efficient use of a country’s resources to increase its material welfare. The United States sells to other countries the goods and services that it produces relatively efficiently (from aircraft to soybeans to legal advice) and buys those goods and services that other countries produce relatively efficiently (from T-shirts to bananas to electronics assembly). In the aggregate, both sides benefit. [Douglas Irwin, Foreign Affairs, J/A 2016] When a political candidate talks about trade, ignore it. It is only what the candidate thinks the audience wants to hear. Truth is not a criterion.
More myopic political science. Trump Releases Science Spending Priorities for FY2019. In a memo to federal agencies, the administration highlights defense and security, leaves off Earth and climate science, and limits the scope of basic research. ... specifically calls out basic research as “critical,” but states that projects of “greater uncertainty” should give way to those that can be more readily developed into products and services. [Aggie Mika,the-scientist.com, Aug 18, 17] Since Trump and his budget chief know little about science and have no OSTP staff to rely on, Congress will drive the result. But scientists can help with publicizing the good science does.
CEO Abandonment. Companies get in bed with politicians when it serves their interests and are quick to run away when it doesn’t. ... Mr. Trump’s administration is turning out not to be the administration [many CEOs] were hoping for ... Especially he has not made headway on corporate taxes—the issue that bought him whatever benefit of the doubt America’s CEO class was willing to give him. Now a handful are fleeing his advisory council because he didn’t say the right words over Charlottesville [Holman Jenkins, Wall Street Journal, Aug 16, 17]
The Defense Innovation Unit Experimental, a 2-year-old effort that’s investing in private companies, face questions from Republican leaders in Congress and others who view it as a still-unproven and possibly unnecessary venture. .... Wrong, say the program managers, The proof that DIUx is working is the significant number of projects it has undertaken in a relatively short amount of time and with minimal taxpayer investment, said Col. Michael McGinley, who heads DIUx’s office in Cambridge, near the Massachusetts Institute of Technology. [PHILIP MARCELO, Associated Press, Aug 13, 17] Anyway, the money is small and may find a workable niche between DARPA and SBIR for new tech. And two years is way too soon for a federal program to make definitive judgments about quality of innovation. Meanwhile, the DIUx and and Strategic Capabilities Office have received authorization to accelerate their recruitment and contracting processes, Defense News reported. [Ramona Adams, executive.gov, Aug 11, 17] Note that DOD has always had the authority and the flexible money to jump on a big opportunity.
DIUx. The Pentagon's Silicon Valley outreach organization is rolling out one of the tools it's helped to develop, a suite of communications tools designed to help drone pilots coordinate to attack "pop up targets" of opportunity, like vehicles on the run. The tools, developed by the Defense Innovation Unit Experimental, will get a demonstration at the Al Udeid Air Base in Qatar, giving the fledgling organization a chance to prove its worth to the anti-Islamic State war. [Foreign Policy sitrep, Aug 10, 17]
I'm all for progress as you know,/long as we keep the status quo [song from musical "Oh, Captain". And in Russian Siberia a case that highlights the tensions between Mr. Putin’s aspirations for a dynamic private sector and his determination to enhance the powers of Russia’s security apparatus. ... [Scientist-entrepreneur] Mr. Trubitsyn, 36, whose company, Tion, manufactures high-tech air-purification systems for homes and hospitals, is accused of risking the lives of hospital patients, and trying to lift profits, by upgrading the purifiers so they would consume less electricity. [Andrew Higgins, New York Times. Aug 9, 17]
Here is the [budget/tax] debate’s larger significance: We can no longer grow our way out of serious conflicts, if we ever could. There isn’t enough money to satisfy all our demands, even at higher rates of economic growth. There will be conflicts between private and governmental spending; between national and local spending; between health and non-health spending; and between spending on the old versus spending on the young. The present is contentious; the future may be worse. [Robert Samuelson, WashPo, Aug 6, 17]
a THAAD interceptor hit a mock intermediate-range ballistic missile in a Pacific test, according to the Missile Defense Agency: "A THAAD weapon system located...in Kodiak, Alaska, detected, tracked and intercepted the target. Preliminary indications are that planned flight test objectives were achieved and the threat-representative, intermediate-range ballistic missile (IRBM) target was successfully intercepted by the THAAD weapon system." That makes THAAD 14 for 14 in intercept tests, according to MDA. [Marcus Weisgerber, Defense One, Jul 13, 17]
The U.S. House and Senate Armed Services Committees recently passed legislation [that] includes provisions for federal labs, SBIR and SBA technical assistance programs. These portions of the bills are currently very different between the chambers, The Senate NDAA has three provisions particularly of interest for small business and innovation advocates: Pilot Program for Streamlined Technology Transition from the SBIR and STTR Programs enabling the department to sign multiple award contracts with businesses that have completed a Phase I with Defense and gives the secretary the option of waiving competition requirements for these contracts; Pilot Program on Strengthening Manufacturing in Defense Industrial Base boosting production of emerging technologies through small- and mid-sized manufacturers by conducting activities that may include contracts or grants for assistance, purchase orders or commitments, direct loans or guarantees for businesses and awards to third parties to work with the manufacturers; and, Codification and Enhancement of Authorities to Provide Funds for Defense Laboratories — would create a mechanism for lab directors to spend 2-4 percent of funds on projects that may include technology transition, as well as research, lab infrastructure and workforce. The House NDAA, which does not include any of the Senate provisions highlighted above, devotes substantial attention to U.S. Small Business Administration programs, including provisions: Use of Authorized Entrepreneurial Development Programs [SBA] to deliver entrepreneurial development services and education, cluster development and maintenance or business training; Data Collection — the SBA administrator is directed to establish a working group to improve data collection on program impacts; [Jason Rittenberg, SSTI, Jul 13, 17]
Ban the talent. The otherwise little noticed Homeland Security action on the International Entrepreneurship Rule infuriated the high-tech industry. Bobby Franklin, the president and C.E.O. of the National Venture Capital Association declared in a statement: At a time when countries around the world are doing all they can to attract and retain talented individuals to come to their shores to build and grow innovative companies, the Trump Administration is signaling its intent to do the exact opposite. [Thomas B. Edsall , New York Times, Jul 17, 17] The cognoscenti have only themselves to blame for opening the door to an avid-nationalist opportunist by ignoring the social cost of a growing concentration of wealth with lower taxes as the only political goal.
Newest religion. Economics offers a comprehensive doctrine with a moral code promising adherents salvation in this world; an ideology so compelling that the faithful remake whole societies to conform to its demands. It has its gnostics, mystics and magicians who conjure money out of thin air, using spells such as “derivative” or “structured investment vehicle”. And, like the old religions it has displaced, it has its prophets, reformists, moralists and above all, its high priests who uphold orthodoxy in the face of heresy.. .... Yet if history teaches anything, it’s that whenever economists feel certain that they have found the holy grail of endless peace and prosperity, the end of the present regime is nigh. ... For, just as you can find a quotation in the Bible that will justify almost any behaviour, you can find human data to support almost any statement you want to make about the way the world works. [The Guardian (UK), Jul 15, 17]
Who you know matters. Startup That Got a Seat at White House Roundtable Is Part-Owned by Kushner Family. Venture-capital firm run by Kushner’s brother partly owns OpenGov, whose CEO last month attended summit with Donald Trump, leaders of Apple, Amazon, Microsoft [Wall Street Journal, Jul 14, 17] POTUS more family mogul than POTUS.
head of [SBA] praised [Amazon]— which has made a big business out of letting independent merchants sell on its website — as being an enabler of entrepreneurship.[despite] during the presidential campaign, Trump said Amazon had a “huge antitrust problem.” [Ángel González, Seattle Times, Jul 19, 17] All previous statements go down Orewll's history hole.
Ag science turns right. Trump has selected Sam Clovis, a former economics professor and advisor to Trump’s campaign as undersecretary for research, education, and economics ... Unlike previous undersecretaries, Clovis does not have expertise in science or medical research ... As ProPublica reported in May, “Clovis is better known for hosting a conservative talk radio show in his native Iowa ... act as USDA’s chief scientist, does not buy the data on climate change. Clovis told Iowa Public Radio in 2014 that, as far as climate change is concerned, “a lot of the science is junk science [Kerry Grens , The Scientist, Jul 20, 17]
One way loyalty. In an extraordinary denouncement of one of his earliest backers in Washington, Trump said [USAG] Sessions' decision to recuse himself from all matters related to Russia was "very unfair to the president." [AP, Jul 19, 17] Presumptivve job of vetting?
Trump refuses service from capable people willing to die for his counry. When I served my tours in the combt zone, I was glad to have anyone willing and able to stand with me.
Dismal economics resurrected. In his 2011 book The Globalization Paradox, [econmist Dani] Rodrik concluded that “we cannot simultaneously pursue democracy, national determination, and economic globalisation.” The results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push back, for better or for worse, against the campaigns and institutions that promised more globalisation. .... globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. [Nikil Saval, The Guardian, Jul 14, 17] So, once again, today's problem was yesterday's solution, and circle of change continues to revolve. Home cooking won the election as Walmarts give way to the automation of online shopping which needs ever fewer human workers. Trump's mirage already being revealed as a Wizard of Oz.
The Pentagon is taking initial steps to more closely enforce so-called “Buy American” laws, elevating a series of Depression-era statutes that require manufacturers to rely on U.S. materials when they make guns, equipment, uniforms and food for the nation’s military. [Crain's WashingtonDC, Jul 10, 17] New DOD SBIR contracts will find more restrictive clauses in their contracts about buying materiel. SBIR already forbids R&D work.
Blocking competition. The Trump administration took steps toward scrapping a regulation that would have helped more foreign-born entrepreneurs build startups in the U.S. without a traditional visa. The Department of Homeland Security filed a notice that it will delay the effective date of the International Entrepreneur Rule. [Douglas MacMillan, Wall Street Journal, Jul 10, 17] No longer the world model for open competition: "America first", and declining.
Policy Impenetrable. “Impenetrable” Cyber defense on hold. Only hours after President Trump Tweeted that he and Russian President Vladimir Putin “discussed forming an impenetrable Cyber Security unit,” POTUS informed Twitter that it was actually a terrible idea. "The fact that President Putin and I discussed a Cyber Security unit doesn't mean I think it can happen. It can't," Trump wrote. As so often happens, Trump’s change of heart came after a member of his cabinet went on national television to praise the president’s original plans. This time, it was Treasury Secretary Steven Mnuchin’s turn to get burned by the boss. [Foreign Policy sitrep, Jul 10, 17] How does Trump escape destruction in the face of nearly complete collapse of any logic or continuity in policy pronouncements? Groupthink. says The Economist [Jul 1, 17] special report on how and what the lower middle class whites expect from him, and what they will overlook.
new polling confirms their [Republican] health care bill is deeply unpopular with the American people [Brookings, Jul 7, 17] Stand by for another advance of government support for the lower classes at the expense of the upper class. Who else? Somebody has to pay for it, either the rich or the future. Republican doctrine of every man for himself, especially the ones that get economically comfortable by business success or inheritance, gets undercut by universal suffrage and instant comunication that empower the voting multitudes to level the playing field somewhat. After all, if SBIR companies get help when they cannot compete in the open marketplace, why not other middle class people?
Liars meet "tremendous". Trump said he had a "tremendous meeting" with Putin. [The Russian] Foreign Minister said Trump had accepted Putin's assurances that Russia didn't meddle in the U.S. election. He also met UKPM May and says they were working on a trade agreement that he described as a "very, very big deal, very powerful, great deal for both countries." [AP, Jul 7, 17] said that he and Prime Minister Theresa May held “tremendous talks” on trade [New York Times] Then he faced off with world leaders over trade policy, positioning the U.S. as the most vocal critic of the international economic order and leaving it largely isolated. ... European Union leaders bluntly warned the president that they would retaliate against protectionist measures from Washington. [Emre Peker, Anton Troianovski and William Horobin, Wall Street Journal, Jul 7, 17]
Unwelcome to the USA. Robot allowed into US for competition, but no visa for Afghan girls who made it. .... Asked why the girls were banned, a US State Department spokesperson cited regulations prohibiting the agency from discussing individual visa cases .... So the six team members will watch the ball-sorting machine compete in Washington DC via video link during the 16-18 July event from their hometown of Herat, in western Afghanistan [The Guardian (UK), Jul 5, 17] Such xenophobia fits the gutting of the State Department which would be focusing on post-employment survival.
America first. Chinese and European diplomats have warned Donald Trump against reported plans to restrict imports of steel and aluminum – a strategy that risks triggering a global trade war. ... that “section 232” tariffs could not be justified on national security grounds .... At a Cabinet meeting, “One official estimated the sentiment in the room as 22 against and 3 in favor – but since one of the three is named Donald Trump, it was case closed,” Axios reported. [The Guardian (UK), Jul 1, 17]
Lawmakers in the two states edged closer to blowing through midnight deadlines without new budgets, setting the table for Maine’s first government shutdown in 26 years and painful cuts in Connecticut. [Wall Street Journal, Jun 30, 17] The struggle goes on in nation, state, and local between what people want from government and what they are willing to pay for it. Beneficiaries of government programs should be alert to shrinkage of the relatively generous handouts in our world's richest society. For the decades since WW II we have had great economic growth that could pay for government programs. Today, however, the economists say that such growth will not continue in the more competitive world we find outside America. And all the political palaver about magical formulae for high growth is just wishful thinking.
Start the FY18
House Appropriations Committee began
releasing FY 2018 “markup” budget bills this week, and the proposals
would cut billions in non-defense spending. ... SBA’s entrepreneurial
development programs would lose $34 million, NIST’s Manufacturing
Extension Partnership would lose $30 million, and Energy’s ARPA-E would
be eliminated, among other cuts. [SSTI, Jun 28,
History says that the Congressional oversight committees will prevent
such wholesale slaughter of long established programs in search of
cheaper government that the wealthy have to pay for.
Trumponomics is Mercantialism. The dominant economic perspective 16th to 19th centuries is a zero-sum world, like Trump's real estate world wherein any gain by some other country is a loss for the USA. But the 20th century proved that free trade could improve both parties, and if the goal is winning at another's expense, the mercantilist needs the 18th century British Navy's untrammeled power. [Kent Gardner, Rochester Business Journal, Jun 23, 17] So far, the under-qualified workers in the upper Midwest still think that at least he's our jerk, until perhaps he signs a law that prices health care out of their shrinking reach.
In their ardor to undermine and abolish the Affordable Care Act, Republicans in Congress are causing inestimable damage. Specifically, they are damaging the United States’ reputation for reliability among private companies looking to do business with the government. This is not a partisan statement. One of us is a Republican, the other a Democrat. We differ on many policies, including health care reform. But we agree that the circus atmosphere surrounding the Affordable Care Act — exemplified this week by the abrupt decision by the Senate majority leader, Mitch McConnell, to delay the vote on the Senate’s replacement bill — is generating uncertainty, which in turn is jeopardizing the future of public-private partnerships. [New York Times, Jun 28, 17]
NASA says its 2018 SBIR/STTR Solicitation will be released early next year instead of uhe usual November; not surprising given the low priority of SBIR and the near-chaos of the Trump administration's management.
A Government Agency That Produces Real Innovation. In a new Manhattan Institute report, we find that NIH does particularly well in this regard: Its patent portfolio produces 20.4% more market value than average patents, with every $100 million in NIH funding associated with $598 million in downstream private research and development. For some of NIH’s most productive programs, total downstream R&D is as high as $3.3 billion for every $100 million in grant funding. [Mike Kalutkiewicz, founder of Belle+Preuve Public Affairs LLC and Richard L. Ehman, professor at the Mayo Clinic., Wall Street Journal, Jun 22, 17]
Something for every Republican. The mystery health bill prescribes help for every Republican donor in proportion to their campaign contributions and lobbying expenses. Why not? Its a representative legislature in a capitalist democracy where the highest court rules that money is speech.
a Canadian gentleman asked me a simple question: “What do you fear most these days?” ... “I fear we’re seeing the end of ‘truth’ — that we simply can’t agree any more on basic facts. And I fear that we’re becoming Sunnis and Shiites — we call them ‘Democrats’ and ‘Republicans,’ but the sectarianism that has destroyed nation-states in the Middle East is now infecting us.” [Tom Friedman, New York Times, Jun 20, 17]
Fallen Angels. Despite hailed by medtech and biotech entrepreneurs as a vital piece of the puzzle in efforts to translate Minnesota’s leadership in medical research into startup businesses. ... The Minnesota High Tech Association asserts $377 million in business investment has been tied to the credits since their inception in 2010. .... an intense lobbying effort from “dozens of companies and organizations.” “the funding for the Angel Tax Credit was removed” [Don Jacobson, Twin Cities Business, Jun 7, 17] Politics of subsidies usually lacks credible accounting for what would have happened without the subsidy. Minnesota legislators may have called the bluff.
[$258 million in research contracts to six companies developing supercomputing technology] comes after a White House budget proposal advocated nixing research and development funding across agencies and especially at the Energy Department. .... proposed eliminating the Energy Department’s R&D unit, the Advanced Research Project Agency-Energy, or ARPA-E, because “the private sector is better positioned to finance disruptive energy technology research and development." [Mohana Ravindranath, nextgov.com, Jun 19, 17] Great trust in private investment in innovation that might undercut present technology investment. Ah well, whatever works to cut taxes (and the many present R&D jobs paying good wages).
every single one of America’s 493 wealthiest counties, almost all of them urban, voted for Hillary Clinton. The remaining 2623 counties, most of them suburban or small-town, went for Donald Trump [Edward Luce, The Retreat of Western Liberalism, Jun 2017] And the Republican Congress is doing its best to serve those rich counties while the richest-ever President dithers about what his mandate means and how to pursue it.
Scattered and incalculable. One might expect that over that amount of time, the Department of Defense would have developed a system to become compliant with SBIR’s fundamental provision that a minimum threshold of innovation research spending be directed toward small businesses. Yet, a new report from the Government Accountability Office concludes DOD couldn’t say if it was meeting the threshold because, DoD did not submit the required obligations data. The report states “DOD officials told [the GAO] that obtaining obligations data would require requesting information from more than 10 individual program offices that, in turn, would have to request the information from various DOD comptrollers, which would be a major effort.” [SSTI, Jun 7, 17] Each sub-agency of DOD has its own incentives to short-change SBIR in favor of spending its R&D money its its main purposes. But the politicians seem to care for nothing about SBIR except handing the mandated amounts to the small biz political constituents.
Economic dream. Trump has plans, and promise, to create a "first-class" system of roads, bridges and waterways by using $200 billion in public funds that he says will generate $1 trillion in investment to pay for construction projects that most public officials agree are badly needed and long overdue. [San Jose Mercury News, Jun 7, 17] Private invesors, though, don't do it for politics, only for profit, which is hard to come by from road and bridges. If it were a good investmnt, we would already have a lot of it. Even The Donald would have invested in it. Now we shall see how persuasive he is with private investors as he tweets his way to fame and fortune for public goods. Stand by for rip-off stories as private firms take public money controlled by politicians.
Retroactive cancellation. In January, the Department of Homeland Security announced 31 winners in a controversial grant program to fight violent extremism. A team lead by UNC-Chapel Hill researchers won the largest – nearly $900,000 to develop information campaigns to counter jihadist and white supremacist recruiting. ... and so far the Trump administration has refused to release the money. ... A spokesman for the Department of Homeland Security wrote in an emailed statement that it’s unclear whether the money will be released. He declined to say why the department hasn’t sent it. .... Congress, though, has already approved the grant program for the current fiscal year. [Jay Price, WUNC Radio, Jun 5, 17] Politics or incompetence? In the chaos of Trump's fumbling administration, almost any explanation could be true.
Pay some, stiff others. [OMB Director] Mulvaney said, “You cannot meet all of your obligations as a nation; that’s not a desirable outcome.” However, he added, there is “absolutely no way” the U.S. would default on Treasury securities. “We are not going to do that. You can take that off the table,” Mulvaney vowed. What’s likely to trouble the financial markets in that statement is the distinction Mulvaney makes between payment to debtors who hold Treasury securities and all other payments -- from Social Security checks to the federal payroll to bills from government contractors. [Rob Garver and Eric Pianin, Fiscal Times, Jun 5, 17] The message: Rich US bond holders will get paid but poor Social Security recipients will have to compete with all other government bills for underpayment or outright default. Our new president is reportedly quite adept at not paying the full bill for services and his OMB chief is ready to arbitrarily default on obligations enacted in law.
Back toward sane government. Kansas legislators repudiated the tax-cutting experiment that brought Gov. Sam Brownback national attention, with even fellow Republicans voting to override his veto of plan reversing many of the income tax reductions he's championed in recent years as a way to fix the cash-strapped state's budget. [JOHN HANNA, AP, Jun 6, 17]
A transformative event. Mr Trump has revolutionized our ideas of what the US stands for. We live in the world the US made. Now it is unmaking it. We cannot ignore the grim reality. ... Hard power and lower taxes: these are the US priorities under Mr Trump. [Martin Wolf, Financial Times, May 31, 17]
So in love with the sound of his own voice speaking power: Trump may have irretrievably undermined his lawyers’ efforts to persuade the Supreme Court to reinstate his executive order limiting travel from six predominantly Muslim countries. Saying he preferred the original travel ban, “not the watered down, politically correct version” he had issued in March, Trump attacked both the Justice Department and the federal courts. [Adam Liptak and Peter Baker, New York Times, Jun 6, 17]
ARPA-E intends to issue a Funding Opportunity Announcement (FOA) for the development of hybrid fuel cell and engine systems for the ultra-high efficiency conversion of natural gas to electricity. The objective of this FOA will be to encourage the development of commercial-scale (>100 kW) Distributed Generation (DG) systems that have fuel-to-electric power conversion efficiencies in excess of 70% on a Lower Heating Value (LHV) basis. [ARPA-E Newsletter: June 2, 2017]
Technology will leave few segments of the labor market untouched .... while machines with rudimentary artificial intelligence capabilities are already writing basic news stories .... The [worry] is that Americans will embrace a still more radical politics that threatens to compound the damage. Already, both parties are flirting with populist “quick fix” remedies. ... A bipartisan new deal would instead be premised on helping individuals to acquire the education and skills they need to prosper in a fast-changing economy. [Edward Alden and Robert Litan, Council for Foreign Relations, May 31, 17] People with short attention spans and declining education standards call for quick fixes to any problem.
Everyone's on their own. It was put most succinctly this week by two Trump advisers, H.R. McMaster and Gary Cohn, when they wrote in the Wall Street Journal that “the world is not a ‘global community’ but an arena where nations, non-governmental actors and businesses engage and compete for advantage...Rather than deny this elemental nature of international affairs, we embrace it.” [The Economist, Jun 3, 17] Trump apparently requires his "advisors" to promote his opinions without regard to the advisors' earned reputation for strategic thinking and respect for facts.
Weeks before Trump made the announcement on the Paris accord, it was clear the debate inside the White House on the issue was "content free" and purely political, Forign Policy's Robbie Gramer and Dan De Luce reported. And the [climate is a security problem] views of [SECDEF] Mattis and others in the national security establishment were not solicited. [Foreign Policy sitrep, Jun 2, 17]
The Department of Homeland Security announced that it would not be implementing a ban on laptops and other electronic devices on flights to the United States from Europe. Whether the U.S. government will pursue a rule like this in the future remains uncertain [Crain's Washington DC, Jun 1, 17]
Snake oil state. Lawmakers in Austin have approved a bill authorizing unapproved stem cell therapies, putting Texas on track to become the first state to explicitly recognize the experimental treatments. [Andrew Joseph, statenews.com, May 30, 17] You could be an experiment in over-promising ventures.
The Pentagon conducted a successful test of a system designed to shoot down an intercontinental ballistic missile : ICBM from southern Pacific, interceptor from California.
The DeSoto County [CA] Board of Supervisors approved 10-year partial property tax incentives for Intuitive Surgical on May 15. [Elle Perry, Memphis Business Journal, May 19, 17]
[John Boehner] said a repeal and replacement of the Affordable Care Act is "not going to happen. Republicans never ever agree on health care." Twenty four million people will not give up their health insurance for the sake of a few thousand billionaires [who don't need health insurance] paying less tax for social insurance in a tax cut bill pretending to be a healthcare plan.
Economics trumps Trump. More than 600 Carrier employees in Indianapolis will soon be out of a job. ... Last year, the company originally said it planned to move its entire operation to Mexico, laying off more than 1,000 Hoosiers. Last fall, President Trump struck a deal with Carrier to save many of those jobs. [Indianapolis Star, May 22, 17] As Trump knows and does at home, economics tops politics for profit-making corporations.Made America great. [billionaire biotech investor Gerald] Chan said investments in basic science are paying off for many Asian countries, which have been “unsparing” in pouring money into that sector. “Slowly but surely, they are chipping away at America’s commanding lead in science, which was part and parcel of the post-World War II world order,” Chan said. “If we are to make America great again, let us never forget what made America great in the first place,” he told the audience, [Bradley Fikes, San Diego Union Tribune, May 19, 17]
Trump's energy plan: more oil, less R&D. heavily influenced by the Heritage Foundation, a conservative think tank that argues that the federal government should fund only very basic scientific research and get out of the business of helping companies commercialize new energy technologies. ... Office of Energy Efficiency and Renewable Energy, which has helped nudge down the cost of solar power, faces a 69 percent cut. The Office of Fossil Energy, which invests in methods for capturing carbon dioxide from coal plants and burying it underground, faces a 54 percent cut. The Office of Nuclear Energy, which is pursuing technology to help extend the life of the United States’ existing nuclear reactors, faces a 31 percent cut. [BRAD PLUMER and CORAL DAVENPORT, New York Times, May 23, 17] Chances in Congress? Nil.
administration says it
can balance the federal budget within a decade. Its blueprint calls for
significant cuts to social safety net programs and assumes more robust
economic growth [with] what it calls a "Taxpayer First"
... the first time in a long time that an administration has written a
budget through the eyes of the people who are actually paying the
taxes,” said Trump’s budget director. [npr,
Look for the
entitlements clause that allows the rich to sleep under the
bridges. It's consistent with Trump's lifelong approach to
ask for more than everything. He did suggest in his campaign
even Treasury bond-holders could also be asked to take less than their
due. He will find that government doesn't work like a family private
entity, especially when the other party can fire him.
Trump's energy plan: more oil, less R&D. heavily influenced by the Heritage Foundation, a conservative think tank that argues that the federal government should fund only very basic scientific research and get out of the business of helping companies commercialize new energy technologies. ... Office of Energy Efficiency and Renewable Energy, which has helped nudge down the cost of solar power, faces a 69 percent cut. The Office of Fossil Energy, which invests in methods for capturing carbon dioxide from coal plants and burying it underground, faces a 54 percent cut. The Office of Nuclear Energy, which is pursuing technology to help extend the life of the United States’ existing nuclear reactors, faces a 31 percent cut. [BRAD PLUMER and CORAL DAVENPORT, New York Times, May 23, 17] Chances in Congress? Nil.
Usual fantasy coming. Trump will propose the U.S. can balance the federal budget over 10 years with substantial cuts to safety-net programs such as food stamps and other anti-poverty efforts, combined with a tax and regulatory overhaul that speeds up the nation’s economic growth rate, a senior White House budget official said. [ Nick Timiraos, Wall Street Journal, May 19, 17] Mere fantasy: tax cuts will not jump start growth without great deficits [spending more money does raise economic activity], and the people's representatives will not slaughter benefits programs for any economic classes.
Fact check. "Obamacare is collapsing. It's dead. It's gone," Trump said in a news conference. "There's nothing to compare it to because we don't have health care in this country," ... In fact, we do have health care in this country — quite a lot of it. The U.S. spent about $3.2 trillion on health care in 2015, or nearly $10,000 per person. It accounts for 17.8 percent of GDP. [Alison Kodjak, NPR, May 18, 117]
Attention getter. The president skims reports quickly, and according to Reuters, “National Security Council officials have strategically included Trump's name in ‘as many paragraphs as we can because he keeps reading if he's mentioned,’” according to one official. [Foreign Policy sitrep, May 18, 17]
Congress hates failure. Technology giants, not the government, are building the artificially intelligent future. And unless the government vastly increases how much it spends on research into such technologies, it is the corporations that will decide how to deploy them. [Farhad Manjoo, New York Times, May17, 17] USG R&D is quite conservative, wanting predictable success that continues Congress's willingness to keep the money rolling. SBIR could have been a gateway to tech change, but Congress simply let handing out money to small biz take priority over innovation. Since innovation needs a lot of failures.
New National Laboratory Collaborations ... the U.S. Department of Energy announced the 38 small businesses that will collaborate with national lab researchers through the third round of the Small Business Vouchers (SBV) pilot. SBV facilitates access to the DOE national labs for American small businesses, enabling them to tap into the intellectual and technical resources they need to overcome critical technology challenges for their advanced energy products and gain a global competitive advantage. Eight DOE national laboratories will receive funding to partner with 38 competitively selected small businesses across the country. Visit the Energy Department's website www.SBV.org to read the whole story.
America has the only healthcare system in the world designed to avoid sick people. Private for-profit health insurers do whatever they can to insure groups of healthy people because that’s where the profits are. They also make every effort to avoid sick people, because that’s where the costs are. [Robert Reich, robertreich.org, May 7, 17]
“Government bureaucrats can be very dangerous when they have power” to make decisions on people’s health, [Congressman] MacArthur said, prompting one woman to tell the congressman she would prefer that scenario than “someone in an office” of an insurance company making the same decisions. [Adam Gabbatt and Lauren Gambino, The Guardian (UK), May 11, 17] Republicans face older and sicker constituents in stormy townhalls. The party driven by tax cuts for the wealthy face the voters who survive with government help. The wealthy do not show up to defend their demand for government help with their tax bills.
Richard Milhous Trump fired his chief investigator, which ignited a firestorm over how the decision would impact the agency’s investigation into possible collusion between the Trump campaign and Russia. [Wall Street Journal, May 10, 17] Anyone who was an adult in the early 1970s would remember Nixon's travails with a chief investigator getting too close to the inconvenient truth. The President has fast power, but Congress has the slow ultimate power. An ugly and perilous power struggle could result between autocratic business and representative democracy in a politically polarized nation.
Make science fit the answers. The Environmental Protection Agency has dismissed at least five members of a major scientific review board, the latest signal of what critics call a campaign by the Trump administration to shrink the agency’s regulatory reach by reducing the role of academic research. A spokesman for the E.P.A. administrator, Scott Pruitt, said he would consider replacing the academic scientists with representatives from industries whose pollution the agency is supposed to regulate, as part of the wide net it plans to cast. [Coral Davenport, New York Times, May 7, 17]
It takes little courage to aid those who are already powerful, already comfortable, already influential, but it takes great courage to champion the vulnerable and the sick and the infirm. [Barrack Obama, May 7, 17]
More campaign inanities. President Trump declared that “everybody” on the world stage has better health care than the United States, but suggested that the GOP’s health care plan will change that. .... “But our healthcare will soon be great.” ..... it’s somewhat ironic that the countries [actually] outranking the U.S. in general reports on this topic, such as the Commonwealth Fund, tend to provide health care for their citizens regardless of their wealth or economic status — Canada and Norway, for instance. [Michael Walsh, Yahoo News, May 5, 17] Advertisers would be called out on such claims; politicians can be called out only at the next election. And this politician was actually rewarded for endless inanities in the last election. But Trump had told us his design: In “The Art of the Deal,” Trump said that playing to people’s fantasies and promising the greatest product was “an innocent form of exaggeration.” [Maureen Dowd, New York Times, May 6, 17]
US House passed tax-cut bill promoted as healthcare improvement. After all, Republicans were born to cut taxes. Trump approves of cutting health insurance from his loyal under-employed Rust Belt voters. Fortunately for him, they probably do not yet recognize their loss. Bottom-line message: you're on your own. The rich and healthy benefit, but poor and disabled people who use Medicaid could lose out. [MARGOT SANGER-KATZ, New York Times, May 5, 17] Meanwhile, Senate Republicans have been working for weeks writing their own version, [Wall Street Journal, May 4, 17] In the Senate, where gerrymandered districts for safe seats does not apply, centrist approaches have more appeal. Who's a big winner so far? The rich and smiling President who gets huge tax cuts and does not need health insurance.
Continue the march. Top Capitol Hill negotiators reached a hard-won agreement on a huge $1 trillion-plus spending bill that would fund the day-to-day operations of virtually every federal agency through September, aides said Sunday night. .... rejects White House budget director Mick Mulvaney's proposals to cut popular programs such as funding medical research and community development grants ... a $2 billion funding increase for the National Institutes of Health - rejecting the steep cuts proposed by Trump - as well as additional funding to combat opioid abuse a lowest-common-denominator measure that won't look too much different than the deal that could have been struck on President Barack Obama's watch last year. [Andrew Taylor, AP, Apr 30, 17] But will our ego-centric president accept its ignoring his hyperbolic campaign promises?
The economic circumstances are utterly different now [from Reagan supply-side tax-cut promises] and not well understood by the policy thinkers in either political party. The world is struggling right now—not with a shortage of capital or wealthy investors, but with a secular stagnation in which capital is overly abundant. And wealth holders and financial firms are unwilling to invest in new production and employment because they can see no market of willing and capable consumers. [William Greider, The Nation, Apr 28, 17]
Scientists of all stripes see the administration as a threat not just to funding—as the White House’s budget proposals have made clear—but to their world view. People marched in hundreds of cities last Saturday (Earth Day) to protest, and organizers spent this week reminding people that marching is not enough. [Alex Lash, xconomy.com, Apr 28, 17]
America's tax system is ... a self-defeating combination of fairly high tax rates and generous exemptions that mean little money is actually raised. ... so knotty that America has as many tax preparers per 1,000 people as Indonesia has doctors. It distorts behaviour: American firms have at least $1trn-worth of cash stashed abroad to avoid the taxman. [The Economist, Apr 28, 17] We reward our politicians for promising tax miracles of multitudinous jobs and lower taxes, while we do not punish them for lower public revenues that add to the public debt.
More oil. Trump signed an executive order to ease regulations on offshore drilling and eventually allow more to occur, particularly in the Arctic Ocean. [WSJ, Apr 29, 17] Drain America first while adding the the worldwide oil glut that keeps prices and profits depressed.Still campaigning.
A Beaverton [OR] man who has a bachelor of science degree in engineering and has repeatedly challenged Oregon's timing of yellow traffic lights as too short was investigated by a state board for "unlicensed practice of engineering'' and fined $500. [Maxine Bernstein, The Oregonian, Apr 25, 17]
Natus Medical down 10% [Apr 26, 17]
No, not that
federal judge [in California] blocked any attempt by the Trump
administration to withhold funding from "sanctuary cities" that do not
cooperate with U.S. immigration officials, saying the president has no
authority to attach new conditions to federal spending.
"Federal funding that bears no meaningful relationship to immigration
enforcement cannot be threatened merely because a jurisdiction chooses
an immigration enforcement strategy of which the president
disapproves," the judge said. [AP,
Apr 25, 17]
his own private business, OK; but US law admits no emperor. San
Francisco and Santa Clara County had sued as others are marching to
their federal court houses.
President Trump plans to unveil a tax cut blueprint that would apply a vastly reduced, 15 percent business tax rate not only to corporations but also to companies that now pay taxes through the personal income tax code — from mom-and-pop businesses to his own real estate empire, according to several people briefed on the proposal. .... His plan would put off the difficult part of a tax overhaul: closing loopholes and increasing other taxes to limit the impact of tax cuts on the budget deficit. [JULIE HIRSCHFELD DAVIS, ALAN RAPPEPORT, KATE KELLY and RACHEL ABRAMS, New York Times, Apr 26, 17] His gift to deserving companies, including his. Conflict of interest? Perish the thought; he's exempt. Shades of Engine Charley Wilson: what's good for America is good for GM.
Donald Trump has casually suggested that he’d like NASA to fly humans to Mars during his first term in office. Good luck with that. [technologyreview.com, Apr 25, 17]
Two trade groups and about a dozen technology companies signed a letter to the Trump administration late last week calling for the continuation of the U.S. Federal Trade Commission’s lawsuit against Qualcomm over patent licensing. [San DiegoUnion Tribune, Apr 24, 17]
Drain America First. The Trump administration is taking retaliatory action against Canada over a decades-old trade dispute, moving to impose a 20% tariff on softwood lumber that is typically used to build single-family homes, Commerce Secretary Wilbur Ross said Monday in an interview. [Peter Nicholas and Paul Vieira, Wall Street Journal, Apr 24, 17] Resource extractors, and real estate developers, cannot see past today's marginal production cost.
"You're fired" monomania President Trump this week will sign an executive order to create a new office in the Veterans Affairs Department to increase employee accountability and protect whistleblowers, according to a White House official. [Eric Katz, Government Executive, Apr 24, 17] After decades of underfunded VA treatment centers, the new broom wants more sweeping power for his favorite management approach from his TV acting career. Politics. No doubt the decider new broom will want to pay for better VA care by cutting taxes for his economic and business class.
Advancing rearward.The Trump administration has proposed cuts to science programs amounting to around $7bn, including cancer research, coastal resiliency work and climate research. This week, Jeff Sessions, the US attorney general, announced the dismantling of the National Commission on Forensic Science, a body that works to improve the accuracy of forensic evidence in criminal cases. [Oliver Milman, The Guardian, Apr 22, 17] Sessions this week belittled a Hawaiian federal judge as from a small island, after years of representing the rearward-facing state of Alabama which has twice removed its chief judge from office for misconduct.
Companies may encounter challenges as they weigh the pros and cons of producing their goods in the U.S. again. But small firms face particular hurdles: They can’t always attract top talent or find U.S. suppliers that meet their specifications. ... Bringing its manufacturing back to the U.S. cost GAM Enterprises (Mt Prospect, IL; no SBIR) nearly $4 million and required technical and financial assistance from Illinois and the U.S. Commerce Department’s Manufacturing Extension Partnership. The company hired a headhunter for the first time in its 26-year history, after struggling to find a machinist who could operate new small-batch production technology. Even then, the new hire required months of on-the-job training. [Ruth Simon and Vipal Monga, Wall Street Journal, Apr 14, 17] Politcians wish for magic results from glib policies but overlook the economic price to make it happen.
A small-business advocate has won a day in court with Pentagon attorneys to argue whether the Defense Department should release shielded internal documents that the plaintiff argues will reveal a government bias against small defense contractors. Lloyd Chapman, founder of the Petaluma, Calif.-based American Small Business League, for years has sought to expose the workings of the 28-year-old Comprehensive Subcontracting Plan Test Program designed to “determine if comprehensive subcontracting plans on a corporate, division or plant-wide basis [instead of for individual contracts] would lead to increased opportunities for small businesses.” [Charles Clark, DefenseOne, Apr 14, 17]
The Most Ambitious Government Overhaul Ever. When Donald Trump promised not touch Social Security and Medicare -- the two most expensive items on the federal budget -- but to go after waste, fraud, and abuse, it was obvious he would try to streamline the federal workforce to ensure that every job was necessary to meet the mission of each agency and program. [Eric Pianin, Fiscal Times, Apr 12, 17] Ronald Reagan rides again, but Trump will find, as Reagan did, that "waste, fraud, and abuse" is any program that benefits someone else. Congressional oversight committees will protect their constituents as always, and the overhaul will be overshadowed by the next several government crises.
Phase I answers the biggest question. To the extent public funds are used to subsidize applied private sector R&D, the findings in this paper suggest that more [SBIR] grants to small, young firms on a one-time basis may be more effective in stimulating innovation than fewer larger grants that follow firms through multiple stages of technology development. .... This paper conducts the first large-sample quasi-experimental evaluation of R&D subsidies ... An early-stage [SBIR] award approximately doubles the probability that a firm receives subsequent venture capital and has large positive impacts on patenting and revenue. [Sabrina T. Howell, American Economic Review, April 2017] A paper that could set Congress to re-thinking their idea that more small biz money means more innovation. If Congress had any time or energy to spare from political power gamesmanship.
Machine guns. Tanks. Chemical weapons. Warplanes. Submarines. Trench coats. Wristwatches. [Today] marks the 100th anniversary of the U.S. entry into World War I, and some of the innovations that were developed or came into wide use during the conflict are still with us today. [Chris Carola, AP, Apr 6, 17]
A few weeks ago, President Trump said his administration was running like “a fine-tuned machine.” This was true, I thought, assuming the machine was a Tandy 1000 computer. Unless the government is bombing or spying on people, it is technologically primitive. [Barry Ritholz, USA Today, Apr 5, 17]
Reality intrudes. As a candidate, Mr. Trump promised to take strong action on trade and label Beijing a currency manipulator on his first day in office, but he has since backed off those positions. [Carol Lee and Felicia Schwartz, Wall Street Journal, Apr 5, 17] The hopeful people elected a brash unpracticed politician with no obvious base for his claims and promises. Now the consequences.
Of course I'm right. The “spreading epidemic of misinformation,” nowadays known as “alternative facts,” gives rise to a corollary to Gresham’s Law (“bad money drives out good”): “Misinformation pushes aside knowledge.” Everyone with a smartphone has in his or her pocket, Nichols says, more information “than ever existed in the entire Library of Alexandria,” which can produce a self-deluding veneer of erudition. [George Will, WashPo, Apr 5, 17]
two different mountains. Trump did not create the conditions for his own rise. During the Obama era, conservative media, particularly talk radio, adopted what Vox’s David Roberts calls a “tribal epistemology.” All facts were filtered for the benefit of the tribe. In this approach, information is useful only as ammunition. And conflicting views are entirely the result of bad faith. This was a political wave well suited to an empty vessel. Trump was willing to say anything the medium demanded. ... On issues such as climate change or gun control, the reds and blues do not see different ways up the mountain. They see two different mountains — two different fact sets, two different political, social and scientific realities. [Michael Gerson, WashPo, Mar 23, 17]
Trump's education. Trump says The Common Core State Standards has “to end” because “we have to bring education local.” Catherine Engelbert, chief executive of Deloitte, asked him about his priorities “around education” and around “the work of the future.” She noted that the New York City public high school graduation rate is 70 percent, but the readiness of students for college and career is assessed at 37 percent. ... He didn’t directly address any of the issues she mentioned but went into a somewhat rambling explanation of his education priorities. [Valerie Strauss, WashPo, Apr 4, 17] Trump's standard would force business to know the education standards in every local school district when evaluating job applicants. National standards have large effect on efficiency and unity. Trump's education in government is just starting.
over the weekend U.S. Citizenship and Immigration Services released new guidance that computer programmers are no longer presumed to be eligible for H-1B visas [DCInnoBeat, Apr 3, 17]
Government is different. trying to apply private sector innovation to the public sector, with its overlapping and sometimes conflicting legislative mandates and a bureaucracy organized to execute on those mandates, is a gargantuan task. If Trump and Kushner want Washington to innovate internally, they’ll have to begin with experimental and small-scale efforts that large private companies have tried in the past [Joe Hadzima, Why Jared Kushner Will Probably Fail, Fortune, Apr 2, 17]
Shut up, science, politics reigns now. The new Trumpster business leader EPA Administrator ruled that a dangerous insecticide had not been compellingly proven unsafe, and therefore would not be banned. The EPA scientists said that the evidence shows that it is dangerous and that it should be banned unless and until it can be proven to be safe. The burden of proof is thus shifted from safety to profitable commerce in crops and chemicals, which can buy politicians more readily than it can convince scientists. When burden of proof is up for grabs, either politics or the courts will rule.
For the first time in the post–World War II era, the federal government no longer funds a majority of the basic research carried out in the United States. ... falling below 50% in 2013 [Jeffrey Mervis, Science, Mar 10, 17]
a new White House agency called the “Office of American Innovation”, headed by his son-in-law, Jared Kushner; which will hold extensive powers to overhaul federal procedures and potentially privatize certain government responsibilities, by culling ideas from the business community, according to a report in The Washington Post ... The intent to create a new administrative office flies in the face of arguments from members of the President’s inner circle that the Federal Government has become too bloated and has wrestled too much control from other branches of government and the states. It’s also another attempt to entrench policy creation inside the executive branch and away from Congress [techcrunch.com, Mar 27, 17] Heard that before: Reagan's Grace Commission, Clinton's Re-Inventing Government, Obama's SWAT team. Eventually, anything of import has to pass Congress which fiercely protects its constituents. Makes nice sounding announcements, followed by silence or silly ideas as long as they try to run government like a business. Government is about societal stability, not efficient profit-making.
Two well known congressional drug pricing critics launched a preemptive strike on PTC Therapeutics over its soon to be launched steroid for Duchenne muscular dystrophy, deflazacort (Emflaza), while Trump, during a Monday speech in Louisville, again vowed to introduce drug pricing legislation in the near future. ... Congressional drug price hawks Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) urged PTC Therapeutics to charge about $1,000 a year for deflazacort, a steroid that helps treat Duchenne. That’s the cost of importing the drug from the U.K. and Canada. [Ben Fidler, xconomy.com, Mar 24, 17] The politicians conveniently ignore the realistic costs of developing such a product and making enough profit to cover the partial development many more drugs that never succeed all the way to sales. But then politicians deal only in votes.
Fungible money. Can philanthropy fill R&D grant gap if feds back away? Can philanthropy fill the gap left by reduced federal research grants? Phil Blair, Manpower [says] NO: There always will and always has been a finite amount of philanthropic dollars. If it is moved to foster research projects, then it will be taken from some other great cause. [Phil Blair, Manpower, San Diego Union Tribune, Mar 23, 17]
Protecting the jewels. The Trump administration is reportedly in the early stages of drafting a new policy on Chinese investments in sensitive American technology firms, circulating a white paper which argues that American controls on such investments are falling short. [Foreign Policy sitrep, Mar 23, 7]
One of the most acclaimed accounts of the economic and social anxiety of Rust Belt Americans was the 'Hillbilly Elegy,' a memoir by venture capitalist J.D. Vance. Vance made news recently when he announced he would be leaving Silicon Valley to move back to Ohio. Now he's got a new job to go along with the move. Vance will be joining Revolution LLC as a partner, and specifically focusing on helping Steve Case run the Rise of the Rest tour, to drive more investment and entrepreneurship outside of Silicon Valley, Boston and New York. [Ryan Ferguson, DCInnoBeat, Mar 22, 17]
Why security folk hate to share classified intelligence with politicians. Rep. Devin Nunes (R., Calif.), who is leading a congressional investigation into alleged Russian interference in U.S. elections, shared his information with the media and Mr. Trump before he gave it to other members of his committee. [Wall Street Journal, Mar 23, 17] Politics first, eveything else last.
When a GOP president loses The Wall Street Journal: The paper's staunchly right-wing editorial board posted an extraordinary piece last night.[DefenseOne, Mar 22, 17] If President Trump announces that North Korea launched a missile that landed within 100 miles of Hawaii, would most Americans believe him? Would the rest of the world? We're not sure, which speaks to the damage that Mr. Trump is doing to his Presidency with his seemingly endless stream of exaggerations, evidence-free accusations, implausible denials and other falsehoods. [Byron Tau and Rebecca Ballhaus, Wall Street Journal, Mar 23, 17]
Chicago officials are establishing a program to help draw immigrant entrepreneurs they say will help grow companies and generate jobs. Mayor Rahm Emanuel announced the formation of the Global Entrepreneur in Residence program earlier this month. Five area universities will participate in helping sponsor immigrants for H-1B visas, which apply to highly skilled workers, as in the technology industry. (U.S. News & World Report) [reported by Crain's Washington DC, Mar 20, 17]
“Transformation” was infamously all things to all people. Mentioned 89 times in the 2001 [Quadriennal Defense Review] QDR, transformation sought to “extend America’s asymmetric advantages well into the future” across virtually every operational and institutional area. The meaning was entirely in the eye of the beholder; Pentagon bosses would routinely tell staff to “sprinkle some transformation” on ideas they wanted senior leadership to fund. [Defense One, Mar 20, 17]
while the president promised to reduce the trade deficit, the $5.8 billion cut from the [NIH] budget surely won’t help decrease our $55.8 billion trade deficit in pharmaceutical products. NIH funds more than 300,000 researchers across the country and represents the nation’s feedstock of pharmaceutical research. ... the budget calls for the elimination of programs such as the Manufacturing Extension Program (MEP), which has proven highly successful at increasing productivity for small-and medium-sized manufacturers. For every one dollar of federal investment, MEP generates almost $18 dollars in sales growth for manufacturers. [Scott Andes, Brookings, March 17, 2017]
The race to woo companies has intensified as state and local governments struggle with a slow economic recovery, sluggish new business formation and job losses resulting from automation. Many older industrial cities see tax incentives as one of the few levers they can pull. ... By 2015, the total annual cost of these incentives was $45 billion, according to the analysis, by Timothy Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research [Ruth Simon, Wall Street Journal, Mar 16, 17]
The Trump Administration’s skinny budget proposal calls itself, “A Budget Blueprint to Make America Great Again.” From the information contained in the document, it is clear the Administration does not view science, technology, innovation and entrepreneurship and the economic development efforts built around those activities as the path forward to making “America great again.” ... [would cut] all funding for the Manufacturing Extension Partnership and ARPA-E, and would impose significant reductions in research spending by most agencies. [SSTI, Mar 16, 17] How handy a phrase "make great again," which can mean whatever the speakers says it means. Just a negotiating stance for a developer who demands everything of his prospective business deals.
It's different this time. “This time a ‘Great Leader’ has appeared..” The last time Robert Shiller heard stock-market investors talk like this in 2000,... the Nobel Prize-winning economist says, traders were captivated by a “new era story” of technological transformation: The Internet had re-defined American business and made traditional gauges of equity-market value obsolete. Today, the game changer everyone’s buzzing about is political: Donald Trump and his bold plans to slash regulations, cut taxes and turbocharge economic growth with a trillion-dollar infrastructure boom. “They’re both revolutionary eras,” says Shiller, who’s famous for his warnings about the dot-com mania and housing-market excesses that led to the global financial crisis. [Jason Clenfield and Adam Haigh, Bloomberg.com, Mar 13, 17]
Funding for the National Institutes of Health, the nation’s premier medical research funding agency, would be cut by 18%, or $5.8 billion, from levels enacted for fiscal 2017, under the Trump administration budget. The agency’s budget would total just under $26 billion, the lowest level in 15 years. [Thomas Burton, Wall Street Journal, Mar 15, 17]
Do as I say. When it comes to America’s technology industry, Donald Trump takes a dim view of foreign workers. “I will end forever the use of the H-1B as a cheap labor program and institute an absolute requirement to hire American workers for every visa and immigration program,” he said in a statement a year ago. “No exceptions.” When it comes to the hospitality industry, though, Trump is much more, well, hospitable. His Administration recently made it harder to get H1-B visas, but he has expressed no objection to the visa category that hotels and resorts use—the H-2B—to attract low-cost, low-skilled seasonal labor. In fact, at Mar-a-Lago, his Palm Beach club, the visas are still in active use. [Sheelah Kolhatkar, New Yorker, Mar 14, 17]
Slower worker visas. U.S. Citizenship and Immigration Services said it plans to temporarily suspend fast-track processing for the skilled-worker visa program, a move that could slow down the process of hiring foreign workers for U.S. companies. Starting April 3 and running for up to six months, the agency will no longer allow H-1B applicants to pay an additional fee of $1,225 to get a response within 15 days [Rebecca Ballhaus, Wall Street Journal, Mar 7, 17]
New health offer: return taxes to the rich and make health insurance dearer for the unrich. Elections have consequences. The angry less-educated under-employed voters in the Midwest may notice their loss.
The Advanced Research Projects Agency-Energy (ARPA-E) announced that a group of 74 project teams has attracted over $1.8 billion in private sector follow-on funding since the agency’s founding in 2009. ... In addition, ARPA-E, tasked with supporting transformative innovation in the energy sector, announced that 56 projects have formed new companies, 68 projects have partnered with other government agencies for further development, and an ever-increasing number of technologies have been incorporated into products sold on the market today. read ARPA-E investments [ARPA-E press release, Feb 27, 17] A note: one project gave Alcoa nearly $6M to develop a more efficient refining process. Why does the industry leader need government subsidy? Maybe the ultra-political new SECENERGY from Texas can find some votes in purging government spending invented by the previous Energy administration run by real scientists.
David Stockman fiscal disaster prediction. “I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.” [Tyler Durden, zerohedge.com, Feb 27, 17] The Donald "I am the king of debt." will have his chance to play president with an amateur WH staff, a frozen Congress, and a public that wants to keep their benefits.
SBIR Extension. NASA has a deal for companies that have successfully completed Phase II funding under any federal agency’s SBIR or STTR program. The Civilian Commercialization Readiness Pilot Program (CCRPP) may be your next opportunity to secure additional funding for your innovation. NASA is reintroducing CCRPP to further advance innovative technology with high potential for commercial impact. Through CCRPP, NASA seeks to mature SBIR/STTR developed technology from a combination of further SBIR/STTR program investment and non SBIR/STTR program investor funds. NASA will match investments with SBIR/STTR program funds up to $2 million for each CCRPP award. Eligible firms must identify and obtain commitment from an investor to provide matching funds prior to submission of the CCRPP application. The technology proposed for advancement toward commercialization should have a strong relevance to NASA, as well as a strong potential use by NASA and/or markets outside of NASA beyond the CCRPP investment. [NASA announcement, Feb 2017] NASA wants third-party validation - money invested - in tech successes that NASA chose on the basis of the value to NASA programs. An idea I started 25 years ago of tying SBIR investment levels to market demand as an indicator that the tech has a future beyond government succor. Other agencies have tried variations on the idea. If NASA really cared about the follow-on, it would make investment potential a competitive criterion for Phase II. Instead, the mission agencies use SBIR to fund their regular R&D and then pretend to make lemonade with "commercialization" programs. NASA cannot invest directly in any company or commercialization because its SBIR money is aappropriated exclusively for R&D, but it cam make co-investment in the company a criteron for funding specific R&D.
Ready, set, re-organize. The defense secretary wants to reform the sprawling department’s business functions and reorganize key executive offices. [Defense One, Feb 22, 17] Meanwhile, the AF cannot explain Trump's claim of saving $1B on Boeing plane, one of many inexplicable Trump claims.
A Pentagon-funded unit called the MD5 National Security Technology Accelerator, which coordinates it all behind the scenes, gives students a modest budget to try to solve military problems using off-the-shelf products. After a test run at Stanford University last spring, the accelerator is starting similar courses at least a dozen universities. The University of Pittsburgh, University of San Diego, James Madison University and Georgetown University are among those trying to replicate Stanford’s success. [AAron Gregg, Washington Post, Feb 20, 17]
Is nothing sacred?
Trump let Boeing CEO
listen in on Pentagon
call about Lockheed fighter [Seattle Times, Feb
16, 17] “The
discussions that we had were all
pre-decisional,” Lt. Gen. Bogdan tells lawmakers. ....
Martin had no comment on the phone calls.
One, [Feb 17, 17]
The Texas Medical Center’s TMCx accelerator announced its new, and largest ever startup class. Twenty-four health IT companies will come to Houston for the four-month program. In addition to the size of the class, another item of note is the fact that many of the participating companies are more mature than before—with three having already raised at least $10 million in funding, said Erik Halvorsen, director of TMC’s Innovation Institute. [Angela Shah, xconomy.com, Feb 15, 17]
SBA now has a confirmed administrator, Linda McMahon, with no apparent background in SB politics or adminstration. Like many of Trump's stable of top officials, her prime qualification is that she made a lot of money in business.
Sick dams neglected. Part of the problem, officials said, is that as a rule, the government is more inclined to invest money in building new projects, celebrated with elaborate ribbon-cutting ceremonies overseen by elected officials, than in the less visible (and less glamorous) task of maintenance. [ADAM NAGOURNEY and HENRY FOUNTAIN, New York Times, FEB. 14, 2017]
Minnesota and local units of government within its borders spend an average of at least $239 million — or $45 per capita — on subsidies each year, according to a 50-state investigation by the New York Times. That puts Minnesota far behind Alaska ($704 million per year or $991 per capita), but ahead of Nevada ($33.4 million per year or $12 per capita). Minnesota’s most subsidized industries are agriculture, finance and telecommunications. .... The Mayo Clinic, for which the legislature approved subsidies worth $585 million to turn its campus into a “destination medical center.” The clinic’s CEO had threatened to expand the clinic in another state without a subsidy from Minnesota. ..... Medtronic Inc. sealed a $22.9 million tax increment financing deal with Mounds View in 2005 to help it build a new facility. In 2014, the company announced it would move its headquarters to Ireland because of lower taxes (it still has some of its operations and jobs in Minnesota). .... Worth it? a 2004 study by University of Iowa regional planning professors found that economic development subsidies didn't seem to create jobs or provide fiscal benefits to states. [Greta Kaul, Twin Cities Business, Feb 2, 17] Oh yes, the politicians love it as they announce gifts to constituencies, with little chance of poor economic valuation being noticed years later. SBIR has survived for thirty years on the game.
If Twitter can’t materially benefit from a phenomenon like Trump [exposure that money just can’t buy], it probably won’t from anything else either. ... a streak of decelerating growth every quarter Twitter has been public. .... Mr. Greenfield of BTIG compared the president’s tweeting to Franklin Roosevelt’s “fireside chats” that made radio popular in his four terms as commander in chief. One of the big beneficiaries of that time was Radio Corporation of America, or RCA, which ultimately became the largest U.S. radio manufacturer. Prior to the Great Depression, RCA was one of the most heavily traded stocks on the New York Stock Exchange. But investing in RCA during Mr. Roosevelt’s presidency would have been a bad move. Even as radio thrived, RCA’s stock collapsed and didn’t reclaim its 1929 peak until the mid-1960s, [Steven Russolillo, Wall Street Journal, Feb 8, 17]
The U.S. and Japanese militaries successfully intercepted a medium-range ballistic missile with an Aegis and SM-3 late Friday off the Hawaiian island of Kauai, CNN reports. "The US Missile Defense Agency announced that the USS John Paul Jones detected, tracked and took out the target ballistic missile using its onboard Aegis Missile Defense System and a Standard Missile-3 Block IIA interceptor. [Defense One, Feb 6, 17]
Microsoft, join legal fight against immigration ban
[Seattle Times, Feb 6, 17] The core legal question, not the
political or economic
advisability, is whether the President has
absolute power to decide what is necessary for national security under
prevailing law. Whichever side loses this legal argument will
appeal to the Supreme Court, which could eventually lead to a
Congressional effort to modify the law, which this President would
almost certainly veto.
A business administration. States and tech companies argued furiously before an appeals court that Trump wrongly and arbitrarily chopped off approved visa entry into the US from seven Muslim majority countries none of which had any business dealings with the sitting President. Not included were countries, equally Muslim dominated, that did have business dealings with the president. DOJ argued that the law gives the President full authority to decide who enters the US. The authors of that law no doubt assumed an honest President with no conflicts of interest. The President characteristically insulted the federal judge that called a temporary halt to the ban. Surprise, wide suffrage elections have consequences.
A business administration. States and tech companies argued furiously before an appeals court that Trump wrongly and arbitrarily chopped off approved visa entry into the US from seven Muslim majority countries none of which had any business dealings with the sitting President. Not included were countries, equally Muslim dominated, that did have business dealings with the president. DOJ argued that the law gives the President full authority to decide who enters the US. The authors of that law no doubt assumed an honest President with no conflicts of interest. The President characteristically insulted the federal judge that called a temporary halt to the ban. Surprise, wide suffrage elections have consequences.
On your own, caveat emptor, again. Trump’s move to roll back the Obama-era fiduciary rule amounts to a reprieve for parts of the financial-services industry and puts the onus back on retirement savers to avoid conflicts by stockbrokers. [Michael Wursthorn and Lisa Beilfuss, Wall Street Journal, Feb 3, 17] Financial stocks, already among the biggest winners since the election, just got fresh fuel to go higher. [Aaron Back ,Wall Street Journal, Feb 3, 17] Meanwhile, Trump's lightly educated and unemployed Rust Belters are still waiting for some crumbs from the presidential table.
Some reports have claimed that the administration may seek to entirely eliminate the Advanced Research Projects Agency–Energy program, the Office of Energy Efficiency and Renewable Energy, and the Office of Fossil Energy. [MIT Tech Review, Feb 1, 17] Every $1M external R&D cut will reduce SBIR funding by $30000. And Trump is not an R&D champion, nor is his Rasputin Bannon. Their prime economic interest is jobs in the Rust Belt even though their trade talk and moves so far might well kill more jobs than they create.
President Trump this week ordered that any agency issuing a new rule find two to repeal. He will likely discover that the only thing harder than getting something done in Washington is getting it undone. ... Mr. Trump’s order requires the costs of any new rule be fully offset by repealed rules in any given year, but has yet to specify how to measure those costs. No cost estimate exists for many rules, and those that do haven’t been updated since the rules were passed. [Greg Ip, Wall Street Journal, Feb 1, 17]
Nowrasteh, an immigration expert at
the libertarian Cato Institute, estimates the average American has a
one in 3.6 billion chance each year of being killed by a refugee who
becomes a terrorist, meaning there is a small benefit from the new
rule. At the same time, he puts the cost of Mr. Trump’s order at $350
million per life saved since fewer immigrants make the workforce less
efficient. By comparison, federal guidance usually puts the statistical
value of a human life at $10 million. [Greg
Street Journal, Feb 1, 17] Oh well, politics has a way of
ignoring or abusing economics when votes are at stake.
The nominee for SBA head said nothing about SBIR in her testimony before the Senate Commerce Committee according to Wall Street Journal recap Jan 27.
The Washington Post is also hearing things , and reports there are more orders coming down ... [to] direct the Pentagon to quickly develop plans to reduce spending on items not deemed ‘highest priority,’ while ramping up programs to expand the armed forces.” [Foreign Policy sitrep, Jan 27, 17] SBIR would qualify as not highest priority, especially as it is up for re-authorization again.
Jobs for Americans (robots). Trump's pick for labor secretary outsourced his fast-food company's technology department to the Philippines, a move that contradicts Trump's vow to keep American jobs in the U.S. ... also has talked about deploying robots to replace American workers who demand higher wages. Robots, he said, are always polite, never late and don't sue their employers for discrimination, according to an interview with Business Insider. [LAURIE KELLMAN, AP, Jan 27, 17]
NY; $1.8M SBIR) raised
in its Series C financing round, officials said. ....
and manufactures immunoassay technology, in the form of microchips,
that can identify proteins and genetic markers in medical samples such
as blood, officials said. The funding will help the firm
production capacity in St. Peters, Mo., where its manufacturing
facility is based. [Kerry Feltner, Rochester
Journal, Jan 20, 17] If Trump really wanted to grow good US
could see that the federal agencies steer SBIR to companies like Adarza
instead of sheltering companies that just service government
The mission agencies might go along if the amount of money were
substantially cut so the programs didn't feel like hey had to have a
fair share of it for what theycould do better anyway in open
competition. Unfortunately for his "deplorables", they won't qualify
for the new good jobs, but then Trump's dream of satisfying them with
good jobs is a fantasy anyway.
Protectionism amounts to the claim that everyone benefits when choices go down and prices go up. [Jeff Jacoby, Boston Globe, Jan 24, 17] Trump's romance with protective nationalism caters to the uncompetitive workers in several states and the racist elements in many states. His big bold moves will eventually suffer from the realties of economics as his tax plans benefit him and his rich friends. The tax plans and the shrinkage of government will also hurt those uncompetitive workers for whom he has no good solutions. But they can suffer the consequences of their voting actions in the face of real life economics of automation.
The emperor muzzles speech. Trump moved quickly this week to shore up its control over communications with the public and the press, as officials at the Environmental Protection Agency and the U.S. Department of Agriculture e-mailed staff to inform them that they may no longer discuss agency research or departmental restrictions with anyone outside of the agency—including news media. Both agencies also told their scientists and other staff that press releases and external communications about taxpayer-funded work would stop until further notice. It remains unclear if these will be temporary or long-term policies. [Dina Fine Maron, Scientific American, Jan 24, 17]
Trump wants to undo the liberal international order the U.S. built and replace it with a 19th-century model of nationalism and mercantilism. Measured in terms of great-power peace, prosperity, and freedom, the liberal order was the most successful international order the world has ever known. Its unwinding cannot, and will not, be pretty [maybe] as turbulent as the 1910s, the 1930s, the 1940s, or even the 1960s.. [Thomas Wright, Brookings, Jan 22, 17] Just what we need, turmoil and uncertainty, with a side order of revenge.
Hardline. he chose a dark, hard-line alternative, one that appeared to herald the end of a 70-year American experiment to shape a world that would be eager to follow its lead. In Mr. Trump’s vision, America’s new strategy is to win every transaction and confrontation. [David Sanger, New York Times, Jan 20, 17] Strangely, his first move was to strangle government regulations - a move that benefits only corporate profits. The common RustBelt unemployed will have to wait their turn for crumbs from the corporate table. As for Trump' ability to fix the economics, presidents have far less control over the economy than you might imagine. Presidential economic records are highly dependent on the dumb luck of where the nation is in the economic cycle. And the White House has no control over the demographic and technological forces that influence the economy. [Neil Irwin,, New York Times, Jan 20, 17]
No free lunch. Barry Eichengreen of the UCal Berkeley sees “double-digit” dollar appreciation as a possible consequence of Trump’s fiscal stimulus, tax reform and protectionist trade policy. [Alessandro Speciale and Mark Deen, Bloomberg View, Jan 16, 17] You can never change just one thing, nor can a politician command free growth, if indeed he can produce growth at all. Fortunately for Trump, the people in the Rust Belt that launched him into office don't study the dismal science of economics. They just bought the snake oil.
Save a trillion, pres. IBM CEO Ginni Rometty and the other tech leaders presented Trump with ideas that could save the government $1T by, you guessed it, enacting a slate of new tech-based policies. Such ideas should come as no surprise, since this is a group of executives from the tech sector. Among the proposals are improvements in supply chain operations ($500 billion), getting rid of fraudulent payments ($270 billion) and just modernizing IT facilities and operations ($110 billion). [Rex Crum, mercurynews.com, Jan 12, 17] Too bad, pres, all that tech will remove a lot of jobs.
The owner of a small business in Arizona confronted Paul Ryan at a town hall this week: “I am standing here today alive” only because of an early Affordable Care Act program that offered coverage to people with preexisting medical problems. [Washington Post, Jan 14, 17]
If you follow federal technology policy. Washington Bytes is a forum for a diverse set of knowledgeable experts to debate and discuss the top technology and communications policy issues at play in the Nation’s Capital. The blog is intended to attract new ideas and fresh thinking from across the tech community regarding policies that impact the digital economy and its citizens. Launched by George Washington University and hosted by Forbes, says DC InnoBeat.
Amazon.com revealed plans to hire more than 100,000 people in the U.S. in the next 18 months, grabbing the spotlight as President-elect Donald Trump pushes companies to employ more Americans. [Spencer Soper and Jing Cao, Bloomberg News, Jan 12, 17] Expect warm praise from The Donald, but don't expect anyone to actually count the offset loss of 120,000 jobs in competing enterprises, because job loss has no political benefits.
Robert F. Kennedy, Jr., who is one of the most famous proponents of the anti-vaccination movement, has said that Donald Trump wants him to chair a committee on vaccines and scientific integrity. .... Outrage is a lot like a drug: the more we are exposed to, the more we require to keep us angry. But the Trump vaccine commission is not simply a bad idea—it is a deadly one. Asking Robert F. Kennedy, Jr., to chair a commission on scientific integrity is like asking Ted Kaczynski to run the United States Postal Service. [Michael Specter, New Yorker, Jan 11, 2017]
Capitalist speaks heresy. many investors fled drug stocks after President-elect Trump said pharmaceutical companies were "getting away with murder" by charging high prices for drugs. [reuters, Jan 11, 17] What's a patent for, and what is a free market? And what does Trump really stand for? And how does he price his hotel rooms?
DIY numbers. Trump said that there "are 96 million wanting a job and they can't get (one). You know that story. The real number. That's the real number." It is unfortunately very far from the real number. There are in fact 96 million Americans age 16 and older who are not in the labor force. Of this, just 5.4 million, or 91 million fewer than the number cited by Trump, say they want a job. The rest are retired, sick, disabled, running their households or going to school. [Steve Liesman, CNBC, Jan 11, 17]
Making law without .... lawyers. Teacher, farmer, personal chef, anesthesiologist, graduation photographer and auto dealer are among the professions of the Kansas Senate’s men and women. What the lawmaking body doesn’t have this year: a single lawyer. .... The top Republican and Democratic lawmakers on the U.S. Senate Judiciary Committee, responsible for vetting President-elect Trump’s judicial appointments, never went to law school ... By contrast Roughly half the Founding Fathers—the Declaration of Independence signers and members of the 1787 Constitutional Convention—were lawyers. [Jacob Gershman, Wall Street Journal, Jan 11, 17] An explanation for the cockamimi laws, fantasy economics, and impulsive tweets emerging these days?
More amateur hour. Trump attacked the pharmaceutical industry in his first press conference as president-elect, accusing drugmakers of “getting away with murder” and pledging to “save billions of dollars” by changing how the U.S. purchases drugs .... Mr. Trump’s comments rattled the stock market, and shares of drugmakers fell sharply. [Joseph Walker, Wall Street Journal, Jan 11, 17] What would a real estate developer know about the economics of medical R&D while making grand pronouncements on the subject? Perhaps Novartis could comment on luxury hotels overbuilding with government subsidies.
Can they spell conflict of interest? President-elect Donald Trump’s cabinet nominees include several [five] who have financially backed the same people now charged with determining if they are qualified for their new posts. ... Mr. Sessions, Mr. Trump’s nominee for attorney general, through his leadership PAC has donated $42,500 to seven of the eight Republican senators on the Senate Judiciary Committee, which conducted his confirmation hearing. [Rebecca Ballhaus, Wall Street Journal, Jan 10, 17] Remember Trump ran against the "elites" who sponsored Hillary. Those angry white males in the Rust Belt may be watching with interest.
Backing off tax magic. [Kansas] Republican Gov. Sam Brownback said he will propose "modest, targeted" tax increases to help close Kansas' serious budget shortfalls while strongly defending an income tax break that some fellow GOP lawmakers want to end. [John Hanna, AP, Jan 10, 16] Brownback found the same result as Reagan did: supply-side tax policy is a mirage as the beneficiaries merely salt away their windfall.
Ask for the moon. With President-elect Donald Trump demanding more ships, the Navy is proposing the biggest shipbuilding boom since the end of the Cold War to meet threats from a resurgent Russia and saber-rattling China. The Navy's 355-ship proposal released last month is even larger than what the Republican Trump had promoted on the campaign trail, providing a potential boost to shipyards that have struggled because budget caps that have limited money funding for ships. [David Sharp, AP, Jan 9, 17] Not so bad; Reagan wanted 600 ships. Considering the growingh arsenal of anti-ship weapons out there, the Navy will at least need a decent reserve. But most would be built in Democratic voting Northeast states.
Apocalypsism suspended. Not long ago prominent Republicans like Paul Ryan, the speaker of the House, liked to warn in apocalyptic terms about the dangers of budget deficits, declaring that a Greek-style crisis was just around the corner. But now, suddenly, those very same politicians are perfectly happy with the prospect of deficits swollen by tax cuts; the budget resolution they’re considering would, according to their own estimates, add $9 trillion in debt over the next decade. Hey, no problem. [Paul Krugman, New York Times, Jan 9, 17] As always in politics, where you stand depends on where you sit, in the unending quest to satisfy the lowest common denominator of constituent.
As we welcome in the Trump administration, it’s important for everyone to remember that we lead the world in innovation in no small part because of the U.S. government’s commitment to science and technology funding. Without it, innovation will slow significantly. Don’t forget the cuts that the government made in these efforts in the mid to late 1980’s in order to help balance the budget left us without the next big innovation. The government R&D that developed the basis for the internet was the last one of the significant efforts. [Kjell Stakkestad Guest blogger, Phoenix Business Journal, Jan 4] If a project depends on cost-benefit calculation, it's probably not research. Government research should be invested in answering the question: How does nature work?
The incoming administration’s incentive to engage in fake policy is obvious: It’s the natural counterpart to fake populism. Mr. Trump won overwhelming support from white working-class voters, who believed that he was on their side. Yet his real policy agenda, aside from the looming trade war, is standard-issue modern Republicanism: huge tax cuts for billionaires and savage cuts to public programs, including those essential to many Trump voters. [Paul Krugman, NY Times, Jan 5, 17] Krugman also assails the news media for headline stories about minor jobs news.
Trump tweeted that GM is sending Mexican-made Cruzes to the U.S. tax-free. He told GM to make the cars in the U.S. "or pay big border tax!" [Tom Krisher, AP , Jan 3, 17] Big talk, but only Congress can invent taxes. And Congress has a lot of vested interests to keep happy, especially since making the Cruze hatchbck model for US market would occupy only a day's production in the Chevy plant.
A G.O.P. plan to gut an ethics office fell apart, but it revealed to an outraged public that Republicans never intended to drain the swamp. [New York Times, Jan 4, 17] They wanted more self in self-policing.
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]