A New Era In Egypt

"President Hosni Mubarak has decided to step down as president of the republic and has assigned the Supreme Council of the Armed Forces to run the affairs of the country," Suleiman said. "May God help everybody."

While Egyptians applauded themselves for toppling Mubarak, his fate was sealed by the military, whose leaders had promised not to use deadly force to put down the rebellion.

Earlier in the day, Egypt's military chiefs said they would guarantee a transition toward "free and honest" elections. But Suleiman's statement left unsaid how that would work, and who precisely would take charge in the interim.

In a televised statement Friday night, the military pledged that it would not act as a substitute for a "legitimate government" following Mubarak's resignation and would take steps to meet the people's aspirations. Reading the statement, a military spokesman praised Mubarak for his contributions to Egypt and hailed protesters who have died in the anti-Mubarak demonstrations.

Egypt's Supreme Council of the Armed Forces includes the top service commanders led by Lt. Gen. Sami Enan, the armed forces chief of staff.

From here.

Thursday night, Mubarak, the 82 year old man who had been dictator of Egypt for thirty-one years pledged to stay in office until regularly scheduled elections in September, something that the Egyptian military had reaffirmed that he would do Friday morning. But, when this, along with Mubarak's appointment of a Vice President after leaving himself without a successor for years, and Mubarak's pledge that his son would not run for President after him fell flat, the military apparently intervened, got the newly appointed Vice President to announce a "resignation," and shipped Mubarak and his wife to a resort as close to the Saudi Arabian border as one can get without leaving the country. Eighteen days of street protests, triggered by the Jasmine Revolution in Tunisia, had secured a new regime. With Mubarak finally gone, the crowds were pleased for once.

Mubarak is gone, not only because the people rose up, but because the Army refused to back him up any longer. When the protests began, police killed several hundred protesters. But, the Army refused to fire on its own people and got the police to back off as well.

Recent Political History In Egypt

Egypt's recent political history can be summed up as follows: Egypt, then a tributary state of England under King Farouk (England became its colonial ruler in 1882 and granted increased independence in stages in 1914, 1922 and 1936) declared independence in 1951. King Farouk was ousted in an uprising in 1952 that left Lt. Col. Gamal Abdel Nasser in charge, a position that was ratified in a democratic process thereafter. Under Nasser, from 1958 to 1961, Syria and Egypt were joined in the short lived United Arab Republic from which Syria seceded. Nasser's Vice President, Anwar Sedat replaced him when he died in 1970. Sadat was assassinated from Muslim extremists in the Army in 1981 when he was replaced by Hosni Mubarak who was in turn replaced today. No Egyptian leader in living memory has ever left office voluntarily or via a democratic election.

But, there is good reason to be optimistic and believe that the military junta in Egypt will promptly hold free and fair multi-party elections, that democratically elected representatives will form a civilian government in Egypt, and that Egypt will start to have a Western style parliamentary republic with an Islamic flavor. There is also good reason to expect that in the short term, that the new civilian Egyptian government will be too preoccupied with domestic affairs to consider international military adventures such as threats to Israel.

Eygpt is not the country that it was when Mubarak seized power three decades ago. It has a military more interested in running its business ventures than fighting foreign wars, so long as domestic tranquility can be maintained. Like many nations in the developing world, it has not been so closed that its people are unaware of what kinds of governments and political developments prevail in the larger world, its businesses are actively engaged in foreign trade and millions of Egyptians work abroad where they have experiences that they can relate to friends and family when they come home. Unlike some countries in the region, Egypt has a genuine middle class that gives it economic clout apart from oil revenues. Egypt has lacked free and fair elections, and it has faced strict state of emergency restrictions on political activity for a very long time, but despite those limits, a vigorous civil society has developed. Many of Egypt's senior military officers, through exchanges begun after the Camp David accords in 1979, have spent time in the United States mingling with American military officers. The protests that brought down the regime were facilitated, in part, via Facebook and were triggered by widely available news coverage on networks like Al-Jazzeria, of the uprising in Tunisia.

One party rule may have seemed like a pretty good idea at the time when it became the norm in Syria, Egypt, Iraq and elsewhere across the non-monarchies of the region. It may even be that truly democratic parliamentary democracy was an unrealistic expectation at that point. One party rule was working in the Soviet Union and China, and it wasn't yet clear that the leaders of the one party states would themselves be entrenched indefinitely. But, by the time that Tunisia set off the current round of democratic uprisings, this form of government had been discredited after decades of experience in newly independent nations around the world. Muslims in Turkey, Albania, Iraq (and before that, Iraqi Kurdistan), Palestine, Kosovo, Iraq, Afghanistan, Indonesia, Bangladesh, Pakistan, Jordan and Iran were all trying to conduct at least partially democratic government with at least intermittent success. Certainly, the notion of a Muslim nation with a parliamentary democracy was no longer considered an oxymoron.

What Next?

The Egyptian Army's best model may be Turkey, where the military sees itself as the guarantor of a secular, democratic state and has been successful more often than not.

I expect that the civilian constitutional order that comes into being in Egypt won't be a very creative one. The Army and civil service will probably continue uninterrupted. The restrictions on civil liberties imposed via "emergency rule" during Mubarak's regime will end. The existing non-democratically selected President and parliament of Egypt will probably remain, but with multi-party democratic elections (modeled on the proportional representation systems found in most of the world rather than the two party single member ditrict system of the United States) and somewhat different respective powers.

What About Israel?

Egypt and Jordan have both committed to making democratic reforms, although the extent of these reforms in each nation is still in flux. This may make the time ripe for rethinking the relationship between the Israel, the Palestinian territory of Gaza, and the Palestinian territory of the West Bank, each of which have weak civilian elected self-government.

Revelations from Wikileaks show that Israel is not really interested in a peace deal with the Palestinians, rather than the other way around as conventional wisdom had long held. What Israel does need is a guarantor that the Palestinian territories won't be used as based of operations for attacks against it. Prior to the latest reforms, Israel has relied on Jordan and Egypt to be neutral towards it and prevent undue smuggling across the border, and the monarchy and dictatorship in these nations respectively have not made them very attractive regimes to the Palestinians. But, should Jordan and Egypt become successful functioning democracies, there may be room for a win-win-win solution if the West Bank merges with Jordan and the Gaza Strip merges with Egypt.

Jordan and Egypt both have regimes that are more competent than either of the Palestinian territories, and hence more able to suppress attacks against Israel from those territories than the current regimes in Palestine, and Jordan and Egypt both have more of an interest in doing so than the Palestinian territories standing alone. As democracies that actually work, Palestinians may now find their neighbors more desirable political entities to be a part of than their own marginally democratic and incompetent locally elected governments. Links to these nations would make possible the levels of trade that would allow the West Bank and Gaza to have functioning economies; something that is impossible in embargoed international aid supported states. Also, Jordan may be better able to negotiate Israeli withdrawal from its West Bank settlements and better able to protect that territory from further Israeli encroachment than a semi-sovereign autonomous Palestinian government within Israel. Jordan and Egypt would each gain territory and people, the classic measures of sovereign clout. Also, from an Israeli perspective, while Middle Eastern historical memory may be long, an end to a distinct Palestinian political entity recognized on the international scene may eventually defuse Palestinian nationalism - a generation from now, the children of today's Palestinians may seem themselves as Jordanians and Egyptians respectively.

Some Recent History of Coups

Military coups, which is what the events in Egypt amount to so far, however, characterized, are neck and neck with elections as the most common means by which countries secure new leaders in most of the world. Sometimes they support popular uprisings against dicators, sometimes they suppress democratic governments.

Coups have been the norm for Egypt's neighbors not fortunate enough to have monarchies. Libya's current leader, Muammar al-Qaddafi seized power in a coup in 1969 and is still in power there. Syria's Baath party took power in a 1963 coup, in a regime that installed Hafez al-Assad as President in 1971, a post he continued to hold until his death in 2000 when his son Bashar al-Assad succeeded him and remains in power today. In Sudan, a revolutionary council declared independence and installed Gaafar al-Mimeiry as President until he was replaced in a 1985 coup, followed by a 1986 democratic election, followed by the 1989 coup that installed its current leader General Omar Hassan Ahmad Al-Bashir. Algeria won independence in 1962 with a democracy that lasted until a coup in 1965 that installed Houari Boumedienne who ruled until his death in 1978. Demonstrators with Army support backed a coup in Ethiopia that deposed Emperor Haile Selassie in 1974, with succession handled via coups and uprisings until Ethiopia's first multi-party general elections in 1995. Iraq's King Kaisal was killed in a 1958 coup, after which the Baath party gradually gained control' Saddam Hussein became President as the Baath party leader and ruled Iraq as a dicator from 1979 until 2003 when he was deposed in the U.S. invasion.

Coups aren't so far in the past even in Europe and the developed countries of Asia.

Portugal has a military coup in 1974. Spain has had continous democratic government only since 1977 and had a coup attempt that was put down by King Juan Carlos in 1981. Greece had a coup in 1967 and Cyprus had one in 1974. Turkey had coups in 1960 and 1980 and the military remains a powerful political force there, primarily as a guarantor of secular government. The military attempted to remove Mikhail Gorbachev in a coup in 1991, which was foiled with the help of Boris Yeltsin.

South Korea's initial authoritarian leader, Dr. Sygnman Rhee, installed in 1948 was forced out by an uprising in 1960 which was followed by a 1961 coup that installed General Park Chung Hee who retained power until he was assassinated by the chief of the Korean CIA in 1979 when a military coup installed General Chun Doo Hwan, the head of military intelligence, and he ruled until pro-democracy demonstrations in 1987 pushed him to conduct democratic elections that installed his ally Roh Tae Wood. Chun and Roh were convicted of mutiney, treason and corruption in 1996, after Roh was replaced in a new election in 1993, but were pardoned in 1997.

Indonesia won independence in late 1949 and elected President Sukarno in 1950; he suspended parliament in 1960, made himself President for life in 1963, thwarted an attempted coup in 1965 and was forced out by the Army in 1967 when General Suharto took power and ruled for the next thirty one years. Protestors ousted him in 1998, and his Vice President ran democratic elections that installed a successor in 1999. The new President was impeached for corruption and incompetence in 2001 when Megawati Sukranoputri, the daughter of Sukarno became Indonesia's President. She was replaced by a retired general, Susilo bamabang Yudhoyono in a democratic election in 2004. Indonesia's two successive democratic elections makes it arguably one of the most democratic predominantly Muslim nations in the world.

Bangladesh, after securing independence from Pakistan in 1971 had a coupl in 1975, an unsuccessful coup that caused the death of the incumbent President in 1981, and a military backed caretaker government in 2007, interspersed with democratic elections.

After being separated from India in 1947, Pakistan had a coups in 1977 and 2001 which put president Musharraf in place, after which he ruled until a threat of impeachment by parliament led by his assassinated political opponent's widower (who herself was the daughter of the President who was outsted in the 1977 coup and executed by that regime in 1979) ousted him in 2008.

Of course, the historical record makes clear that many coups, even when fueled by popular uprisings, do end up evolving into new dicatorships, even if ratified in genuine democratic elections the first time around. But, given that the alternative had been a likely transfer of power to Mubarak's son in an emerging monarchy, it is a risk that it is worth Egyptian's effort to take.

Fed Taxes At 60 Year Low; Colorado Taxes Low

With all the rhetoric that the Tea Party has generated about controlling growth in government at the federal government level and in Colorado, you might think that taxes are unusually high. But, this isn't the case. Federal taxes are at a sixty year low and Colorado taxes are well below the national average.

Also, while the federal government is running big deficits, Colorado's state budget has to be balanced every year.

Federal Taxes Are At A Sixty Year Low

Federal taxes are currently a smaller share of the nation's economy than they have been at any time since 1950 at 14.8% of GDP (compared to 17.5% of GDP during George W. Bush's last year in office). CBO projections that federal tax revenue will increase ignore the extension of the Bush tax cuts and other tax cuts passed at the end of 2010. (Taxes during World War II were also much more onerous than they are today.) The average tax burden of the median family as a percentage of income is also the lowest it has been in many decades (at least as far back as 1955).

The top marginal tax bracket isn't quite at an all time low, although it is close. But, a large share of the income of the highest income Americans consists of tax exempt municipal bond interest, and qualified capital gains and dividends that are taxed at a top rate of 15%. This rate is also paid on carried interest income of private equity fund managers and the stock option income of top executives in big businesses. The 400 highest income Americans paid an average tax rate of 16.6%, down from 30% in 1995.



Thirty-six percent of federal tax return filers owe no taxes, a record high. Forty-seven percent of American households owe no federal income taxes.

Federal estate taxes are lower than they have been in any year since at least 1934, except 2010 when they were suspended for a year.

Federal taxes are generally progressive.

Quintile - Combined 2010 Federal Taxes (incl. corp. tax incidence) as % of Income
Bottom 0.0%
Second 7.3%
Middle 14.1%
Fourth 18.4%
80th-95th Percentile 22.3% (calculated personally from information in source)
95th-99th Percentile 25.0%
Top Percentile 26.0%
Top Tenth of A Percent 27.7%

Note that individual tax rates for the upper middle class are higher than those of the highest income earners, because the upper middle class receives mostly earned income which is taxed at a higher federal rates than the investment income that makes up most of the income of the highest income earners.

Corporate income taxes which indirectly tax cprporate shareholders, significantly mitigate this effect. Corporate income taxes are one of the most progressive taxes as applied in the mix of federal taxes, even moreso, in practice than the estate tax, on average. Corporate income taxes provide just under a third of all federal taxes whose incidence falls on the top 0.1% of income earners, while in 2011 (in which we have a restored by lenient estate tax), estate taxes will account for just 2.5% of that top 0.1% of income earners' tax burden.



If the secret to economic growth is low taxes, our economy should be in great shape. Of course, in reality low taxes are, if anything, negatively correlated with economic growth and not closely related to it in any case, and our economy is still in pretty dismal shape.

How High Are Corporate Tax Rates In Practice?



But, what about the horrible job killing corporate income tax with a top marginal rate higher than most of our developed world peers? (The average corporate tax rate in the 34 O.E.C.D. nations is 26 percent.)

Well, it isn't as terrible as it seems. The top marginal rate on the books is 35 percent. But, most corporations don't actually pay those rates, due to a variety of tax reduction strategies.

Of the 500 big companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate — both federal and otherwise — of less than 20 percent over the last five years. . . . Thirty-nine of those companies paid a rate less than 10 percent.

The corporation that owns Carnival Cruise lines pays corporate tax rates of 1.1% on its profits.

Over the last five years, on the other hand, Boeing paid a total tax rate of just 4.5 percent, according to Capital IQ. Southwest Airlines paid 6.3 percent. And the list goes on: Yahoo paid 7 percent; Prudential Financial, 7.6 percent; General Electric, 14.3 percent.

Some corporations do pay significant corporate taxes, although their average amount paid to all levels of government combined is still far below the top federal rate alone:

The average total tax rate for the 500 companies over the last five years — again, including federal, state, local and foreign corporate taxes — was 32.8 percent. Among those paying more than the average were Exxon Mobil, FedEx, Goldman Sachs, JPMorgan Chase, Starbucks, Wal-Mart and Walt Disney.

There are wide differences between industries, (see also here) with the R&D tax credit explaining a large part of that discrepency.

As a result of [the drug industry's credit for research] and other tax breaks the pharmaceutical industry pays just 5.6 percent of its profits in taxes. This puts it just above the biotech industry, which pays 4.5 percent of its profits in taxes.

Tax burdens are also very low for the motion picture industry.

Hindsight has cast doubt on the benefits of low corporate income tax rates. The two lowest corporate income tax rates in the OECD are those of Ireland (12.5%) and Iceland (15.0%) (the U.S. rate, based on average state levies is deemed to be 39.1%). What happened to them? Ireland is in a state of utter economic collapse and Iceland went bankrupt. Also at the low end in corporate income tax rates is Greece (25.0%) which has just thrown the European economy into a tizzy as it had to be bailed out. Few American policymakers are hoping that our economy becomes more like that of Turkey (20.0%) either.

Germany, whose economy is generally viewed as being one of the healthiest in Europe has a top corporate tax rate of 30.18%. The only countries with higher corporate tax rates are Japan (39.54%), the U.S., France (34.43%), Belgium (33.99%) and Canada (31.32%), and many of those countries have less generous tax loopholes than the United States.

Also, there are multiple ways to tax corporate income. While the U.S. has high corporate income tax rates relative to other OECD countries, it has low long term capital gains tax rates that partially compensate for its corporate income taxes, and many OECD countries have wealth taxes that are like real property taxes but apply to a person's entire net worth, thus imposing a significant tax burden on people with large stock holdings that is not present in the United States.

Colorado's Tax Rates Aren't High

Are Colorado's tax rates high? No.

Colorado's overall tax rates are 33rd in the nation, i.e. well below average, according to one study, and 34th in the nation, according to another study.

Thirty-one percent of tax filers in Colorado owe no taxes.

Colorado's average combined state and local sales tax rate is 6.98% (2.9% state and an average of 4.08% local), which ranks 24th in the nation.

Colorado is one of twenty-eight states without a state level estate or inheritance tax. In 2006, there were 210 estates in Colorado (0.7% of all decedents estates in Colorado) that owed federal estate taxes. In 2011, the number will be considerably smaller as the estate tax exclusions have been increased.

Colorado's property tax rates on residences as a percentage of home value are the 39th lowest in the nation. (They are 36th lowest relative to state income.)

Colorado's corporate income tax is a smaller share of its total business tax collections than all but eight other states (five of which: Nevada, Ohio, Texas, Washington and Wyoming, don't have a corporate income tax). The combined federal and Colorado top corporate tax rate is 37.8% which is lower than every state but Alabama, Texas, Nevada, South Dakota and Wyoming. Nevada's lack of a corporate income tax hasn't prevented that state from having one of the most troubled economies in the entire United States.

Colorado's overall mix of state and local taxes is typical for the United States, and has changed very little in the last decade. This mix of taxes in Colorado is quite regressive as of October 2009:

Quintile - State and Local Taxes as a Percentage of Income
Bottom 9.0%
Second 9.0%
Middle 8.2%
Fourth 7.5%
80th-95th Percentile 6.3%
95th-99th Percentile 5.4%
Top Percentile 4.2%

Colorado's overall state and local tax system is regressive primarily as a result of its reliance upon sales and excise taxes. The combined effect of Colorado's income and property taxes is close to, but not exactly, flat.

Approximately what is the combined federal and state and local tax rate by income level in Colorado?

Quintile - Combined Taxes From All Sources as % of Income In Colorado
Bottom 9.0%
Second 16.3%
Middle 22.3%
Fourth 25.9%
80th-95th Percentile 28.6%
95th-99th Percentile 29.4%
Top Percentile 30.2%

Thus, when taxes from all levels of government are considered in Colorado, the overall effect is progressive.

Do low state tax rates lure high tech businesses? No.

Cell Phone In Prison Concerns Overblown

NPR ran a rather hysterical story on the rising number of contraband cell phones in prisons in California a couple of days ago, that is a follow up to a case where a prison guard was fired after smuggling 150 cell phones into a prison in exchange for $150,000 of bribes. A prison regulation, but not a criminal law, prohibits cell phones in prison and corrections officials and some state legislators want to change that state of affairs.

Some of the points that deserved more scrutiny were these:

Last year, one guard claimed he made $150,000 smuggling phones. He was fired but never charged with anything.

Richard Subia, of California's Department of Corrections, says smuggling cell phones to convicts isn't a crime.

Subia may be right in detail, but he is almost surely wrong in his ultimate conclusion. While it may not be a crime to smuggle cell phones to convicts, it is almost certainly a crime for a prison guard to accept bribes in order to change the way he conducts his official duties in contravention of Department of Corrections rules, and it is likewise a crime to bribe a public official. In Colorado, these are both serious felonies (and there is also a separate minor felony for introducing contraband including cell phones into prisons), and I have a hard time believing that California lacks a bribery law.

Also, in the case, for example, of someone who throws a football full of cell phones into a prison, at the very least, it is almost surely illegal littering (a minor issue, but one that could at least provide a basis for an immediate arrest and booking of a suspect and the imposition of probation conditions prohibiting the conduct), and more importantly, the person who did so would have potential criminal liability as a co-conspirator for any crime committed by someone in the prison with that cell phone.

Corrupt prison guards are a long standing problem, and one that can't be solved once and for all. California has a strategic interest in bringing as much clout as it can to bear on guards who are found to be corrupt in order to discourage other guards from acting the same way. California would be well within it rights, for example, to charge the guard who smuggled cell phones into the prison as a co-conspirator in any attempted witness killing ordered from prison with one of those phones, and once phones are confiscated it would be possible to use cell phone company records to make those kinds of cases.

It may be possible to block unauthorized calls from prisons. But testing of that new technology won't start in California for months.

Cell phone jamming is not some highly experimental new technology, although the experience in New Zealand, where it is being phased in for all prisons is mixed. You can order one and get it delivered in a matter of months. A single device of the type used in the war in Iraq, which is the size of a boom box, could prevent cell phones from working anywhere in a prison complex. Industrial grade versions are available off the shelf. For example, one model designed for use in prisons costs about $8,900. You can order a model that blocks a 40 foot radius for immediate delivery off the shelf for $25 and use it as a stop-gap if a problem is suspected until a more comprehensive solution is devised. At any rate, the main concerns are legal rather than technical.

It's very frustrating to me that we have people who work for our organization that are willing to risk the lives of their fellow employees. It creates another risk for the employees and inmates in our facilities, as well as the public at large.

- Richard Subia, of California's Department of Corrections

The risk from cell phones in prisons is not significantly a risk to the lives of prison guards. This is hyperbole. The main risk is that gang leaders and organized crime figures will use cell phones to run their criminal enterprises from prison, for example, ordering that witnesses be killed, something a high profile case in Denver involves right now even without a cell phone. A secondary risk is that the inability of prison officials to monitor cell phone communications as they can land line communications might make it harder to collect evidence from recordings of those calls that can be used to bring prosecutions of other crimes. There is some dim possibility that a cell phone could be used to coordinate and plan a prison break, but, the sheer difficulty of arranging a prison break from a prison with any significant level of security is immense with or without a cell phone.

Of course, a huge amount of cell phone use by prisoners would be benign - calls to friends, loved ones and legitimate business associates much like calls that anyone else would make. The majority of prison inmates are not violent criminal masterminds with large organizations at their beck and call; they are mostly stupid, ineffectual losers with poor impulse control and substance abuse problems who were acting alone or whose co-conspirators are also in prison themselves.

The truly scary prisoners whom we worry would direct criminal activity from cell phones in their prison cells are pretty much confined to a small number of higher security prison facilities. So, one could get the vast majority of the public safety benefit from cell phone blocking at prisons from devices at a very small number of facilities.

Of course, an even lower technology solution could be devised. State governments could pass a law prohibiting cell phone companies from providing coverage in the tiny handful of cells where they make cell phone use from high or medium security state prisons, and use their power of eminent domain to compensate the cell phone companies and the property owners they have leases with for the economic harm that this does to them. They could probably even impose a users fee on cell phone companies to pay for it.

In short, while the NPR story identified a legitimate matter of public concern about corruption and about cell phone use in California prisons, its uncritical reporting left unchallenged some very questionable statements made by the public officials involved.

Better Fuel Cell Material Discovered

A new material to be used in fuel cell catalyst assemblies, looks promising.

A fuel cell is a battery based on electrolysis. It separates water into hydrogen and oxygen when you charge it, and the used the pure hydrogen as fuel when you want electricity. This works more efficient when the chemical reactions are mediated by a catalyst. Your typical fuel cell today uses platinum on a bed of graphite, the same kind of carbon used in pencils.

A new material would use graphine, which is a sheet of interconnected hexagons of carbon, instead of graphite, that is treated with "crystallized nanoparticles of the metal oxide known as indium tin oxide -- or ITO" before adding platinum nanoparticles. The crux of why it works better is that it prevents the platinum from clumping, so it maximizes the amount of platinum that is carrying out a catalyst function, and prevents the platinum from being carried away from the rest of the material.

Initial efforts to determine its properties have been encouraging. The new material breaks down 40% more oxygen for the same amount of platinum than a comparable conventional catalyst assembly and is about twice as durable.

Does it make economic sense?

In a conventional fuel cell, the graphite substrate is virtually free relative to the very high cost of the platinum (a few dollars per kilogram or less). It isn't clear how much it costs to produce the graphene-ITO substrate. But, given the anticipated greater durability and efficiency, the break even point for the new substrate ought to be roughly two-thirds of the cost of the platinum it supports. The threshold price with platinum prices at $1830 per ounce (about $61 per gram) is about $40 for the amount of substrate necessary to combine with one gram of platinum.

Graphene sheets cost about $100 per square centimeter (by weight on the order of $50 per gram), but the raw materials are cheap and the costs are falling as it enters mass production and are expected to be cut in half in a decade.

Indium tin oxide prices are largely driven by the cost of indium, and cost several times as much as aluminum zinc oxide which is a substitute in many applications. Indium prices are highly volatile (dropping 70% in a recent year from a peak price) and are on the order of $0.60 per gram (i.e. about $18 per ounce, which is on the same order of magnitude as silver). Tin costs about $0.03 per gram ($14 per pound), so indium prices is the main drive of ITO prices.

Realistically, the graphene, and not the ITO, would be the main driver of the proposed new fuel cell substrate, and the price looks likely to make economic sense in the medium term future as graphene prices fall.

Sexual Freedom v. Freedom From Exploitation

Anyone who reads this blog with any regularity knows that I have strong opinions on a great many issues. But, now and then, a case comes along that is so hard to evaluate, that it is very hard to see a right answer. The case of the 41 year old British man with an IQ of 48 who was in a same sex relationship and banned from having sex is one such case. It presents hard issues that are worth grappling with in a situation that is unfamiliar to most of us.

The Facts

The facts, insofar as we know them are as follows:

The 41 year-old [man] had been in a relationship with a man with whom he lived and told officials "it would make me feel happy" for it to continue.

But his local council, which provides his accommodation, decided his "vigorous sex drive" was inappropriate and that with an IQ of 48 and a "moderate" learning disability, he did not understand what he was doing. . . . the man known as Alan was described as being physically able but "seriously challenged in all aspects of his mental functionality". He lived in a home provided by the council, where he developed a sexual relationship with a man called Kieron by the court. Alan was also accused of making lewd gestures at children in a dentists' surgery and on a bus, although no police action was taken.

An IQ of 48 is a level of intellectual functioning lower than 99.8% of the general population, and is commonly described as "moderate mental retardation" per the DSM-IV. It is roughly equivalent to having the mental abilities of an eight year old child.

The Law

The law in Britain gives the state broad powers in such a case: "Under the Mental Capacity Act 2005, [judges on Britain's Court of Protection] have the power to make life-or-death decisions for people deemed to lack the intelligence to make them for themselves - such as ordering that they undergo surgery, have forced abortions, have life-support switched off or be forced to use contraception."

In Colorado, and most U.S. states, an individual in this situation would probably have a legal guardian appointed for him under the supervision of a general jurisdiction or probate court or some other court with comparable equity jurisdiction (a type of jurisdiction named after the British courts that once, but no longer, have jurisdiction over these kinds of cases). In Colorado, a guardian's authority can vary from case to case as set forth in a judge's order, although at common law a guardian of an adult had rights comparable to the rights of a natural parent's rights when that parent's child is in the parent's custody.

In other words, while the issue would present itself somewhat differently, a U.S. court could probably grant a guardian of an adult with an IQ of 48 the right to decisions similar to the ones made by the Court in this British case.

Procedural History

The town hall began court proceedings in 2009 to restrict contact with Kieron on the grounds that he lacked mental capacity, and an interim order was made. . . . A psychiatrist involved in the case tried to prevent the man being given sex education, on the grounds that it would leave him "confused".

Mr Justice Mostyn said the case was "legally, intellectually and morally" complex as sex is "one of the most basic human functions" and the court must "tread especially carefully" when the state tries to curtail it.

But he agreed that the man, known only as Alan, should not be allowed to have intercourse with anyone on the grounds that he did not have the mental capacity to understand the health risks associated with his actions.

Under the judge's order, the man is now subject to "close supervision" by the local authority to ensure he does not break the highly unusual order. The judge concluded: "Alan does not have the capacity to consent to and engage in sexual relations.

"In such circumstances it is agreed that the present regime for Alan's supervision and for the prevention of future sexual activity is in his best interests."

"Since then Alan has been subjected to close supervision to prevent any further sexual activity on his part," said the judge.

Analysis

There are good reasons to be skeptical of this kind of court order. The eugenics movement sponsored movement in the 20th century to sterilize the mentally retarded is generally seen as a class historical instance of government exploitation of vulnerable individuals. There is also a history of government abusing its authority to punish gays in the name of mental hygiene. Some high profile cases in Britain involving prominent intellectuals are particularly notorious.

On the other hand, the exploitation, sexual and otherwise, of people who don't have the capacity to consent intelligently to what people ask of them is also a long standing problem. A central theme of Steig Larsson's Millennium Series (which starts with "The Girl With The Dragon Tattoo") is that vulnerable people, such as wards with guardians appointed for them and illegal immigrant women are subject to a horrible injustice when they are sexually exploited. Sexual exploitation is sufficiently common in this situations that in the popular imagination, at least, at is seen as almost the unpleasant norm in prisons, foster care situations, and households where an impoverished single mother lives with a boyfriend unrelated to her children.

We have statutory rape laws that declare that children under a certain age are incapable of consenting to sex and that someone who does so has committed the crime of rape. While those laws can be controversial when applied to high schoolers who are past puberty and routine have sex with each other, there is a wide consensus that they are appropriate when applied to pre-pubescent children. Likewise, while there is intense controversy over the harsh sentences imposed for people who merely view child pornography, and over the near criminalization of innocent child nudity, there is widespread consensus that it is a serious crime to use pre-pubescent children to create pornography or to pimp out pre-pubescent child prostitutes, and that there is a genuine government interest in destroying the economic market that drives its creation.

Certainly, there would be a very wide consensus that is would be a serious crime for an adult to have sex with an eight year old, regardless of the sex of the parties involved.

But, there are many important ways that a 41 year old is different from an 8 year old, even if they have similar mental capacities. Adults routinely have sex for pleasure. Many adults men are gay or bisexual. Eight year olds have genuine opinions and feelings and are capable of engaging in surprisingly sophisticated relationship, of understanding differences between right and wrong to a considerable extent, and consenting to a variety of agreements. Most parents allow their eight year olds to make many choices about their clothes and room decor and food to eat when eating out, to largely choose their own friends at school, and to spend small amounts of money as they see fit. Eight year olds can play baseball and board games, can hug each other and family members in genuine expressions of love, and make many other decisions for themselves.

Even though statutory rape is often theorized as an incapacity to consent, there is really more to it. Pre-pubescent children aren't just intellectually incapable of consent, they are hormonally and physically not yet at a stage of development where their bodies are ready for sex.

Statutory rape laws for adolescents, which were almost universally adopted initially with the understanding that they would pertain to adolescent or adult men seeking to have sex with teenage girls, were also rooted in the concern that teenage girls due to their youth and adolescent impulsivity are especially vulnerable to making impulsive bad decisions that have the potential to carry with them the serious long term consequences of pregnancy, parenthood and quite possibly either a shotgun marriage for life or a lifetime in which one is unmarriagable and destitute as a result.

A different way to view statutory rape laws, that is gaining increasing credence, is to view statutory rape not as an incapacity to consent in the same class as a stranger drugging you and then having sex with you, but as a distinct subset of cases where someone in a position of trust (by virtue of being an adult in states where there is a Romeo and Juliet exception) abuses that position of trust. In this view, statutory rape is less like a date rape drug case and more like a sexual harassment of a subordinate employee case. The gravamen of the wrong is abuse of power within a relationship by someone whom we presume under the law should know better than to do so.

There is also a widespread view that sexual relationships carried on by someone who isn't ready for them or capable of "truly understanding" what sex involves (do any of us ever really reach that blissful state) will inflict intense psychological trauma that will destroy a person's entire well being, also making it far more serious than other kinds of things to which one might consent.

If a 41 year old man who is physically ready for sex, and perfectly well could be homosexual or bisexual, is voluntarily (to the extent that his eight year old intellectual capacity permits) having sex with another man and enjoying the experience, who is to say that it really is wrong?

This man doesn't appear to be suffering from psychological trauma. He doesn't have to worry about having children or being rendered unmarriagable or forced into a marriage that can't be legally terminated. His body, and no doubt his hormones, are ready for sex and have been for decades. Finding someone who is ready and willing to satisfy his sexual drive probably isn't very easy for a 41 year old with an IQ of 48 who lives on welfare in public housing. It is certainly plausible that Alan is gay or bisexual (indeed, by some definitions his acts and words are sufficient to say that this is true as a matter of definition), that the relationship between Alan and Kieron is as sincere, voluntary, loving and non-exploitative as the sexual relationship between any two single adults, and that the town's intervention is simply a case of an inability to genuinely come to terms with the idea that two men can have legitimate, loving sexual relationships. There are certainly strong hints in this case that this is what is happening in this situation.

On the other hand, it certainly wouldn't be implausible that Kieron is an evil hearted, exploitative manipulator who has managed to get Alan to say things that hide Alan's inner feelings of pain and being used and compelled into something that makes him uncomfortable that Alan isn't capable of articulating to legal system officials in that kind of atmosphere and that Alan has no sexual attraction to Kieron, but has trouble distinguishing between sexual attraction and the kind of platonic physical contact that is normal between eight year old boys.

While Kieron's motives aren't the center of the court's inquiry, which is really about what is best of Alan, it is certainly possible to see Alan as being in a position a bit like someone who is acting happy because he has been tricked into thinking that he has formed a relationship that was really just a scheme to make him the butt of a cruel joke and doesn't know it yet, but is sure to be furiously angry and miserably sad when he realizes it.

By analogy, contrary to common belief, a large share of bona fide childhood sexual abuse victims have trouble remembering the incidents because they weren't as aware of the special meaning that our culture attaches to sexual contacts at the time, and feel the bulk of the psychological trauma that they experience not when the sexual abuse actually takes place, but when they get old enough to gain an understanding of that special meaning and finally realize that an adult whom they trusted exploited them all those years ago. A reasonable person could fear that Alan is at grave risk of experiencing a similar kind of traumatic realization and suffering dearly at a psychological level when and if that happens.

If one thinks that absence of capacity to consent is really all that matters in a case like this one, Kieron's motives are irrelevant and people with the intellectual capacity of eight year olds are morally equivalent to actual eight year olds and shouldn't be subjected to sexual activity. But, if the important question is really abuse of a position of trust that Kieron holds as the intellectually normal close friend of mentally retarded Alan, then Kieron's motives and what is going on in the interactions between Kieron and Alan matter a great deal to the merits of whether a court should or should not prevent Alan from having sex with Kieron.

On balance, I'm skeptical of the British judge and town government's decisions in this case. It bears the stink of a lot of unreasonable prejudices. But, I also recognize that this decision is a highly fact specific inquiry for which ordinary social intuition provides few exact precedents, and that decision makers further removed from the facts are at a decided disadvantage. It is hard to say with any great degree of certainty from the little that we know that the judge's decision was clearly wrong in this unfamiliar territory.

Ancient Rome v Pre-Industrial London

In "The Fall of Rome: And the End of Civilization," Bryan Ward-Perkins reports that the pollutants which are the byproducts of industrial activity did not reach Roman levels in Britain until the 18th century! I am not naive enough to be such a partisan of the “ancients” as to suggest that Europe did not reach Roman levels of civilization in the generality until the 1700s. But, up until the Industrial Revolution occurred in Britain there were aspects of European civilization which had not yet climbed back up to the Roman scale of grandeur or virtuosity. For example, it seems that it was only in 1800 that London attained the size of the city of ancient Classical Rome (which had fallen in its nadir in the 7th century to a population of 50,000).

- Per Razib (links omitted, punctuation added in lieu of link emphasis).

Questioning Patriotism For Fun and Profit

Liberals already control many aspects of American life, and they have undue influence on the Internet. . . . people who use e-mail or other services from companies such as Google, AOL, Yahoo, Microsoft and Apple are unwittingly helping the liberals. These companies are, and will continue to be, huge supporters of those who are damaging our country.

The influence of these companies also extends internationally, where the liberal grip on the Internet has been demonstrated anew in the turmoil in Egypt. There, according to media reports, it is playing a key role in stirring up the mass protests that are clogging the streets of Cairo and other Egyptian cities such as Alexandria and fueling demands for the immediate ouster of President Hosni Mubarak . . . the movement is being manipulated by those who favor a hard-line, Iranian-style, Islamic theocracy. . . . Google executive Wael Ghonim, just released from 12 days of Egyptian detention, confirmed that he was responsible for the Facebook page that ignited "the revolution of the youth of the Internet."

This is the same Google where CEO Eric Schmidt is a personal friend of President Barack Obama. . .

Is that where you want your money to go? I didn't think so, so I started the very first conservative e-mail service provider. . . . Your purchase will help me promote true Reagan values to win back our country in 2012.

Liberals have gone too far to influence the Internet and the political process.

- Michael Reagan, son of President Ronald Reagan, professional pundit, and newspaper columnist (Source: Aurora Sentinel, February 9, 2011, page 9.)

Who knew that it was unpatriotic to financially support Internet companies by having a free gmail, hotmail, or yahoo e-mail account?

Who knew that there was a Democratic and a Republican way to provide e-mail accounts?

Who knew that preventing traffic jams was more important then ending dictatorships?

Who knew that it was unpatriotic for a private American corporation to support democracy in a totalitarian state?

Who knew that you could get paid for writing a newspaper column that is an infomerical for your own business?

Who knew that liberals control American life and the Internet too?

What Did Reagan Say?

What are "true Reagan values" anyway? What did Ronald Reagan had to say on the subject of religious people taking the streets to secure democracy with the help of shared information from Internet that his son is so wary of?

Information is the oxygen of the modern age. It seeps through the walls topped by barbed wire, it wafts across the electrified borders.

Without God, democracy will not and cannot long endure.

Freedom prospers when religion is vibrant and the rule of law under God is acknowledged.

Democracy is worth dying for, because it's the most deeply honorable form of government ever devised by man.

A people free to choose will always choose peace.

Above all, we must realize that no arsenal, or no weapon in the arsenals of the world, is so formidable as the will and moral courage of free men and women. It is a weapon our adversaries in today's world do not have.

Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.

Then again, some of Reagan's messages on the issue can be interpreted in more than one way:

The greatest security for Israel is to create new Egypts.

Drones, Robots and the Next War

Drones (i.e. unmanned vehicles that are remotely operated) and robots (i.e. computer controlled machines) are just on the verge of radically transforming the way that the United States conducts wars.

Unmanned Aerial Vehicles



MQ-1 Predator

The Pakistani side of the War on Terrorism is being carried out mostly by the CIA via armed drones similar to the MQ-1 Predator above which uses Hellfire missiles similar to those mounted on the U.S. Army's AH-64 Apache helicopter gunships (which are large enough to destroy a tank), and has purported led to the death of thousands of Taliban and terrorist group leaders and operatives, but also to significant numbers of deaths of innocent civilians, particularly family members of targets. A less powerful and lighter version of the guided missile, designed to allow more missiles to be fired with less collateral damage, called the Viper Strike, is also in use.

Drones in advanced stages of development promise to take on far more roles than the relatively primitive drones like the Predator (and several similar drones such as the MQ-5 Hunter) do today.



RQ-170

Some of the new drones, such as the flying wing reconnaisance drone called the RQ-170 shown above, utilize the same stealth technology that makes the planes invisible to radar that is found in the recently retired F-117 Stealth Fighter, the B-2 bomber, the F-22 fighter and the F-35 joint strike fighters which are currently being tested prior to entering military service.

Modifying the Air Force RQ-170 to drop "smart bombs," perhaps in places where there are anti-aircraft weapons that would make the mission unsafe for a manned fighter aircraft and radar systems that would make a non-stealth aircraft vulnerable, would be only a minor upgrade for which proof in principle already exists from the MQ-1 Predator. Indeed, in a simple mission to drop a bomb on a target, it wouldn't even have to be remotely controlled and could fly autonomously to its launch area, drop its bomb and return, without being vulnerable to having its telecommunications link to its human operator severed at a key point in the mission.



X-47

An experimental prototype of an unmanned stealth fighter plane intended for use on aircraft carriers and about the same size as existing carrier based F-18s, shown avove, has made its first test flights without a hitch.

All of these drones offer a variety of military advantage over manned warplanes. Weight doesn't have to be devoted to an ejection seat and life support systems for the pilot, and can often be smaller than a similar sized manned aircraft. A drone isn't limited by a pilot's need for food, water, bathroom breaks or the need to get up and stretch. The extra weight can translate into more payload or longer range. They can handle g forces in aerobatic manuevers that would cause a human pilot to pass out or at least be too distracted to be optimally alert. Drones can take a risk and get closer to a target to identify it better or increase its accuracy if needed. If it gets shot down, no American Airman dies, and operators as a result can accumulate their skills despite being sometimes shot down, a classic problem with fighter pilots who rarely have more than a handful of actual battles in their careers. Drone operators don't have to be located anywhere near harm's way, and can work in shifts (many current drone operators for drones in Pakistan do their work from Utah). It is easy to train operators with simulators without causing wear and tear to the real expensive thing. You can wrap a drone in plastic wrap in a warehouse until you need it without having to incur maintenance costs associated with training time until it is needed. The quality control difference between a 1% failure rate and a o.1% failure rate matters far less in a drone than in a manned aircraft and the last little bit of realiability is by far the most expensive part. Drones are cheaper than manned aircraft of comparable capabilities. There is every reason to believe that air refueling will be possible -- this function is already automated to some extent. Automated takeoff from a known airfield shouldn't be a problem either, although landings may require remote control by a drone operator.

In addition to the fact that the aircraft itself would be cheaper, it is much cheaper to train an drone (aka UAV) operator than it is to train a pilot of a manned fighter aircraft.

Today, a manned aircraft pilot completes undergraduate and graduate pilot training programs. The service spends more than $2.6 million to train a fighter pilot. Training for an airlift pilot, relatively speaking, is far less — about $600,000. . . . [The UAV training program starts with the manned pilot training program] “eliminating 20 unnecessary weeks of the current undergraduate pilot training program, deleting unnecessary graduate training on other aircraft,” and adding an eight-week UAV undergraduate course and 12 weeks of UAV graduate training. The cost . . . a little more than $135,000 per [UAV] pilot. . . .

Predator and Reaper flight hours have jumped in the past three years. Predator flights nearly doubled last year, according to the Air Force. UAV orbits over Iraq and Afghanistan — or around-the-clock combat air patrols — have gone from 11 in 2007 to 33 in 2009. Plans call for 50 CAPs by 2011.

Air Force leaders had to temporarily assign manned aircraft pilots to handle the higher number of flights. In 2008, 161 fighter, bomber, tanker and cargo pilots flew Predators and Reapers, the two UAV models. . . . “Developing a UAS-specific career path and eliminating unnecessary training will reduce costs by more than $1.5 billion with aviation fuel savings alone accounting for about $180 million."

There are missions for which remote control, rather than autopilot use of drones will be required (although even then, the planes can travel on autopilot to the immediate vincinity where they will carry out a combat mission). Pursuing moving targets on the ground, missions where it is necessary to look at the target before firing to confirm that it is the intended target, and air to air combat (i.e. dog fights), all involve this kind of situation.

While there are many possible missions of aircraft, reconnaissance and bomb dropping (sometimes in "strike" missions where there is not control of the airspace, and sometimes not) that drones are well suited to carry out have been the dominant missions for U.S. fighter and bomber aircraft. You can list every instance of air to air combat involve U.S. forces since Vietnam in a short blog post, and every instance of air to air combat in the world since then in a long one. With opponents who lack the ability to jam GPS signals and remote control telemetry, there is no reason that drones can't be effective in anti-tank and anti-vehicle warfare -- the missiles mounted on Predator drones were invented for that very purpose.

It may be necessary to have some manned fighter planes and bombers as a hedge against opponents who can jam GPS singles and remote control telemetry, or out of concerns that drone software could be hacked, or to deliver VIP passengers. But, drones seem to be well on track to make it unnecessary to have a manned successor to the F-22 or the F-35. Indeed, an operational version of the X-47 shown in this post may be possible within a few years of the time that the carrier based F-35C variant of the joint strike fighter enters naval service (and the F-35B variant has been put at the back of the line and may enter service around the same time as an operation version of the X-47). There is essentially nothing that a pilot does in a fighter aircraft in the kind of military environment that the United States military has ever encountered in the history of the fighter and bomber aircraft that couldn't be done by a remote operator of a military drone aircraft.

A notable corollary of this development is that it would allow for much lower impact foreign airbases. A drone base could have a skeleton crew to serve as security guards, maintain the fitness of the runway, the hangar/warehouse, the tools, the ammunition and supply stores, and a vacant dorm. The operators would at all times stay safe in the United States. The drones would sit silent in their hangar until actually needed for operations, avoiding the noise and activity that makes military air bases bad neighbors. In the event that tensions were rising in the region of the foreign base, and it looked like it might be necessary to deploy drones from a foreign airbase, drone maintenance technicians could be assembled at a U.S. base and flow in on a day or two's notice to maintain the drones while they were operating. Operates could train on simulators, and from time to time with actual drones, from the safety of U.S. bases.

If a few lukewarm U.S. allies were agreeable to having these kinds of lower impact drone bases on their territory, the distance of any plausible target in the world from the nearest U.S. base would be greatly reduced, making fast response times to threats possible without hypersonic aircraft speeds and the attendant sonic booms.

The drone concept isn't limited to replacing fighters and bombers.

Reconaissance

Reconaissance missions are the main purposes of drones today, and allow U.S. forces to have a bird's eye view of the battlefield that is on the verge of becoming much more comprehensive (follow up link here). Current drones can look at one small spot at a time directly below it; camera systems in development that would be transported by existing drones could look at thirty points at a time in a five kilometer radius circle.

Already, the U.S. has a variety of means to put explosives of almost any desired capacity at any point in the world with extreme accuracy and drone aircraft will only improve this capability - call this omnipotence. The U.S. already basically has the capacity to see any particular point in the world that it wants and this capability is being greatly expanded with drones - call this omnipresence. The next step is to be able to process the incoming flood of data well enough to make sense of what is coming in so that what is seen everywhere can be dealt with as if the U.S. forces were actually present everywhere it can observe something - call this omniscience. But, since the data collection part of this process is something that already exists in the hear and now or is ready to enter operational service in the very near future, the real bottleneck at this point is the data analysis.

However, increased data analysis capacity, either through the brute force of assigning more people to watch the feeds coming in, or through computer image processing, or through a combination of the two, is essentially invisible in war zones. The data analysis can happen can be done by people comfortable offices in the United States and its autonomous image processing capacity can be enhanced with invisible to the user computer software and hardware in some anonymous military server farm.

Airdrops

A Berlin airlift type operation is just a bomb run with a different payload.

Cargo Transports

While military leaders might appropriate be concerned about using drones to transport people, at least apart from high pilot risk situations like medical evacuations in the middle of a fire fight, there is no reason why a UAV wouldn't be appropriate as a cargo plane. Indeed, it would be relatively easy, once the flight software is developed for a drone fighter aircraft, to retrofit existing cargo planes so that they could be operated remotely.

Staffing Impact

It takes about twenty active duty military personnel to keep an aircraft operating in the existing Air Force. And, most of those personnel, the maintenance crews, for example, would still be needed. But, the number of manned aircraft that need pilots could be reduced dramatically in a matter of two or three decades, and maintenace crews would be needed only where drones are being used for actual operations - not for the most part, for training duties.

Unmanned Ground Vehicles



The Black Knight (vehicle)

The drone trend isn't restricted to aircraft. For example, the U.S. Army is testing and evaluating the Black Knight, a prototype light tank that is remotely controlled, not so differently from the remote controlled vehicles you can buy for your kids at Target. It can go as fast as the Army's existing tanks over similar terrain, it has a 30mm cannon and a machine gun, and it can be carried in a C-130 cargo aircraft, unlike existing heavy military hardware like the M1A tank and the M2 Bradley Infantry Fighting Vehicle.

A smaller ground drone called the Gladiator, that has been in military service for three years, has a light machine gun and tracks and weighs three-quarters of a ton (think armed, remote controlled riding lawn mowner on steroids). Obviously, this isn't very useful for chatting up locals to determine who is siding with insurgents. But, it provides the kind of firepower that would otherwise require a soldier without the need to hide from income fire or be unduly concerned about IEDs.

Remote controlled ground drones are more prone to getting stuck than drone aircraft and have to contend with the messiness of surface terrain, but are near future possibilities with off the shelf technology for just about any military mission that doesn't involve interacting with human beings. More humble remotely operated vehicles could deliver supplies or have forklifts to move loads around warehouses.

Army efforts to develop unmanned artillery batteries, the Non-Line of Sight missile system component of the "Future Combat System" that has been cancelled after it failed to meet performance test, went over budget and was behind schedule are sidelined for now. But, since the problems were almost entirely a matter of electronic guidance systems and software, rather than the rest of the missile system, it is only a matter of time before the technology can catch up to the mission and be reintroduced into the Army's military arsenal.

The superfast reflexes of robots and computers have already been harnessed in a modified version of the Navy's "Phalanx Close In Weapons System" for Army use that uses bullets shoot incoming rockets and artillery shells identified by its sensors before an operator even knows what is happening. Systems that use lasers rather than bullets to shoot incoming ordiance have been developed and tested, but are so far inferior to the current system which shoots big bullets with little bullets.

An interesting modification of Phalanx that recently entered service with the US Army is the Counter-Rocket Artillery Mortar system (C-RAM), which is designed to combat the small mortar and rocket threat. This system grew out of a 2004 request from Army Chief of Staff General Peter Schoomaker, who wanted a better means of defending US troops based in Iraq.

The complete C-RAM system networks a ground-based version of Phalanx together with the Army's Lightweight Counter Mortar Radar (LCMR) and Q-36 Target Acquisition Radar (AN/TPQ-36 Firefinder Radar), which detects incoming rounds and determines their point of origin. When C-RAM detects an incoming round, it turns on a set of strobe lights to alert local personnel to take cover, authorizes the modified Phalanx to open fire with explosive bullets to destroy the projectile and dispatches a Hunter UAV equipped with Viper Strike laser-designated munitions to kill whoever fired it. Raytheon is currently (2007) offering a trailer-mounted version of Phalanx as part of C-RAM under the product name of Centurion™. Unlike the naval version, the C-RAM version of Phalanx does not fire solid tungsten penetrators. Instead, in order to reduce the risk of civilian and friendly casualties, this system uses self-destructing explosive bullets.

The first two C-RAM systems arrived in Iraq in May, 2005 and have been reported as having successfully knocked down incoming mortar rounds.

The Centurion unloaded from a cargo aircraft

As in the case of air drones, ground drones aren't very useful as a tool to dispatch people in a war zone. But, for combat and transport roles, particular in asymmetric conflicts (or even "near peer" conflicts) where electronic means of interfering with these military systems aren't available to opposing forces, they have the potentially to replace a large share of the systems current military systems.

The need to have an operator present with a military vehicle or weapon when it is being used in high threat environments could be greatly diminished in the time frame before my grandchildren are of military service age.

Analysis

Suffice it to say that similar unmanned system concepts apply to surface and submarine forces.

A New Era In Conventional Warfare

The net effect of all of this is to make possible a world in which conventional warfare with large military systems of the kind that has dominated every full scale war from World War I to the early days of the Iraq War can be carried out on behalf of technologically advanced countries like the United States mostly by drones and robots that are extremely accurate and capable of managing in conditions unsuitable for soldiers with endurance and patience.

In conflicts with countries that don't have this kind of technology, or advanced electronics that can counter their control systems, heavy weapons systems from tanks to armored personnel carriers to military aircraft to artillery batteries to warships may become all but useless.

Tank squadrons and non-stealth manned fighter wings and surface navy fleets may become as obsolete in conflicts with technologically advanced militaries as the "light brigade" of horse riding cavalry was in the face of machine guns.

The main limitation on the use of military force will be not the capacity to deliver explosive force precisely when and where the military wants to do so, overcoming all static armor systems, but the ability to distinguish rapidly enough between friends, foes and neutrals.

While military planners have portrayed conflicts in Afghanistan and Iraq, where heavy conventional military opposition was utterly destroyed in days or weeks, followed by long mopping up counterinsurgency campaigns conducted mostly by infantry with low levels of heavier military equipment providing support, this may become the norm in future wars, at least those conducted against advanced military powers by nations that do not have comparable military technology.

Spy v. Spy: The Red Queen Effect

Of course, the other problem is that proliferation of this kind of technology is much harder to control than proliferation of ballistic missiles, nuclear weapons, or navy fleets, for example. The computing power and electronic components necessary to make servicable versions of these kinds of weapons systems are available on a commercial, off the shelf basis. This is the kind of stuff that a bright high school student or undergraduate engineering student can devise with a six figure budget. The copies may not be quite as capable as the original, and may come on line a few years later, but they aren't that far behind.

A terrorist cell may not be able to field a stealth bomber drone, but they may very well be able to put together an ugly hybrid of a radio controlled airplane, a cell phone with a videocamera, and a handgun that can be used as a remote controlled assassination weapon, and a full fledged terrorist organization might even be able to mass produce something like that in some lonely industrial park in Yemen or Afghanistan or Pakistan or Compton, a smuggle crates of them (perhaps with a legal radio controlled aircraft component and an illegal weaponizing upgrade kit distributed separately) all over the world. I can even imagine some U.S. court finding that such a device can be lawfully mass produced and distributed in the United States as a Second Amendment protected right, given that it is made up of components that are protected by the Second Amendment or are lawful, and given free speech rights to discuss technology, even military technology, that is not esoteric.

Similarly, a low budget "cruise missile" with a rocket propelled grenade's explosive as a warhead could transform a somewhat heavier than average small arm into a medium range guided artillery weapon.

A single dud Excaliber artillery round or smart bomb recovered from a battlefield, as the Chinese are believed to have recovered parts from an F-117 stealth fighter shot down in Balkans, could allow a decent engineer to reverse engineer most of the core concepts in the weapon's guidance system while attracting far less notice than an attempt to smuggle nuclear materials to a rogue nation might.

A country like North Korea which has managed with get noticed with very small numbers of very advanced military systems like nuclear bombs, medium range missiles and submarines probably doesn't have the industrial base to do more than the equivalent of throwing a one time punch that gives some other nation a bloody nose. Maybe it could destroy one or two medium sized cities in China or Japan or even the United States or Canada. But, it would then be hopelessly outmatched and obliterated. If its next leader is as crazy as its current one, it might even try to make that happen.

But, a somewhat less isolated and backward country with resticted access to the international arms markets, like Iran or [North] Sudan, could devote the resources necessary to develop a pretty credible military-industrial complex to develop drone and robot weapons systems. The examples of South Africa and Israel illustrates the fact that a nation doesn't have to be very large or have that huge of a GDP to have a quite credible defense contracting industry, making not quite state of the art weapons systems and military vehicles. Indeed, perhaps the best justification for allowing the arms sales of Russia and the United States to foreign nations of questionable character to continue is that this discourages those countries from developing the kind of industrial base necessary to make them domestically.

Exports from these unfriendly arms makers, in turn, could spread worldwide to all manner of regimes that might be quite interested in launching attacks on the United States or its interests or allies remotely. China, even if it backs down from hostile direct action against its neighbors, could prove to be more of an arms proliferation threat to the United State than it is a direct military threat.

Our progress in figuring out how to defend our nation from drone and robotic weapons systems is far less advanced than our capacity to make them. But, simply refraining from developing our own drones and robotic weapons systems won't be enough to prevent other nations from doing so with the technological foundations that are available to all.

Ultimately, the technologies inherent in drone and guided weapons may make the need to invade other nations that don't control access to that kind of military technology the norm, rather than exception that the Afghan war seemed to involve.

Education and Unemployment

Is Cyclical Unemployment Mostly A Function Of An Underskilled Work Force?

It is widely known and irrefutable that unemployment is higher among those who have less education. Does it follow that an insufficiently educated rank and file labor force is an important cause of unemployment rates overall? I'm not sure that this follows.

The vexing point is education is to a great extent a way for employers in the economy to sort the workforce. Often, an employer will prefer an employee with more education, on the grounds that it is an indicator of greater general purpose workplace fitness, even when nothing learned during the course of that education is relevant to the job.

To the extent that education is used by employers, on average, as a sorting tool, we expect education to reduce unemployment simply because employers in an employer's market will prefer to hire more educated workers and the lay off less educated workers.

If formal education was the secret to employment, one would expect low education immigrant populations to have the highest unemployment rates, but that isn't the case. The highest unemployment rates are found in native born people with poor educations, not immigrant populations where the relationship between the kind of people sorted into reasonable levels of education in the U.S. and the education levels obtained in their home countries are quite different.

Also, the way that unemployment is defined masks a related problem in more educated workers, which is underemployment. For example, large law firms laid off about 12,000 lawyers in 2009, all of whom had graduate educations and many of whom had spent years on the job developing sophisticated specialty practices. When the market no longer needed lawyers, many of these laid off lawyers would still be able to carry out white collar jobs - perhaps as video store assistant managers, or self-employed divorce lawyers with small case loads, or substitute teachers, and others might decide that this is the time for them to leave the workforce and get more education or have children. But, a measure that looks only at unemployment would greatly understate the economic impact of the lawyer layoffs on lawyers and conclude based upon the low unemployment rates for lawyers that a legal education was somethign that the economy greatly valued in 2009.

While there are some "unemployable" people in the economy, this isn't what is going on when the nation experiences high levels of unemployment in the ordinary course of the business cycle. The vast majority of the people who are unemployed on the day that I write this post (when the unemployment rate nationally is about 9%), have been gainfully employed in a functional way within the last three years, or have been functional participants in educational institutions within the last three years. They don't have jobs not because they are incapable of doing jobs, but because their efforts at their old jobs, while competent, were being directed towards doing things that the economy didn't need, like building more houses in Florida and California and Nevada and providing for the economic needs of people who were doing so. The people who are unemployed during a period of business cycle driven high unemployment are more functional and more skilled unemployed people than those in any other part of the business cycle.

Job Creation As A Function Of Elite Skill Sets

While at the individual level, education of the rank and file workforce is an asset, at the macroeconomic level, it may be that the group whose education matters most is not the education of the ordinary worker, but the education of the economy's elites.

The idea is motivated mostly by two things.

First, my view that unemployment is fundamentally a failure of entrapreneurship. It happens when there is a shortage of executed ideas to find worthwhile things for idle workers to do. The vast majority of the labor force isn't in the business of creating jobs, it is in the business of doing jobs. But, an entrapreneurial elite does create jobs and unemployment is a product of their failure to meet the challenges they face at a certain moment in the economy. Unemployment is about a failure to mobilize ideal resources. There is not a fixed number of jobs in the economy, and there are very few people whose talents can't be put to productive use.

The problem is not that they were doing a poor job at their old jobs, or that they are unqualified to do whatever new job might be created in the near future, but that an entrapreneurial elite has failed to figure out profitable things for them to do.

Car companies don't lose market share and have to lay off the employees whose jobs are lost because of declining market share (as opposed to offshoring) because the employees have collectively done a bad job of building cars. They lose market share because the design engineers, quality control engineers, marketing campaign managers, and senior executives in the company have failed to do their jobs as well as their counterparts in competing firms. When American automobile companies lay off workers and shutter factories at the same time that foreign automobile companies are hiring workers and opening factories in the United States, it is poor leadership by elites in the American automobile companies that is killing the jobs, not an uneducated workforce or excessive regulation or anything else of the kind.

Unemployment happens because the lassiez faire economy has become disorganized.

Second, it is motivated mostly by anecdotal evidence. Good management, leadership even, and a clear vision of how some job creating or economy enhancing institution is works, can have immense effects. Some of the examples that come to mind follow.

* Consider, Tumaini University. It is a private college in Tanzania sponsored by the Lutheran Church (the first private college in Tanzania), which some of my relatives played a significant part in establishing. The lay missionaries that helped build this institution that educates thousands of Tanzanians and employs many people received some outside funding, but the real asset that the church brought to the project was leadership, organization and expertise. Students made their own bricks and helped build college buildings with their own hands (something not so different from the early days of my alma mater, Oberlin College, when it earned its "Learning and Labor" motto starting in the 1830s). Vibrant local congregations provided a great deal of the resources of money and labor to make it work. But, those resources couldn't be put to work until someone who knew how a private university was supposed to work and knew what was involved in managing a long, complex project through all the steps necessary to get from here to there, knew when outside guidance was needed and where to get it, and knew how to establish an organizational culture that was free of corruption in the university's administration came along to guide and crystalize those resources into a large and worthwhile undertaking. A very small number of individuals with those talents and a very modest amount of funding and materials, made possible a big project that will educated large numbers of people for decades or centuries and create countless jobs, both directly, and indirectly through jobs created by graduates who will learn both skills in the classroom, and will absorb through osmosis the way a large bureacratic private entity that runs smoothly works.

* Consider the Port of Haiti when it was run for a brief period by outside American contractors (probably Halliburton, but I could be mistaken). All the rank and file employees were the same. But, a very small managerial group who knew how to do that job and were free of the institutional culture of corruption that had reigned before they arrived dramatically increased the productivity and efficiency of the Port.

* I've seen the exceptional talents that entrapreneurs whom I've represented who take an idea from start up businesses to medium sized ventures that employ a dozen or more people exhibit. While something on the order of sixteen million people, about one in six members of the labor force, are self-employed, the percentage of those people who every managed to establish or run medium to large sized businesses that employ lots of people is very small. The vast majority of self-employed people employ only themselves and perhaps a few other people.

* Consider job creation in immigrant communities, where someone in a first wave of early immigrants develop a business model, perhaps Chinese restaurants or laundries, perhaps Mexican subcontracting firms, perhaps Korean wig shops, that works and then later waves of immigrants follow that model and create large numbers of jobs from the clear vision of how to make it work created by the founder. This isn't restricted to immigrant communities of course. For example, the California style burrito vendor and the expresso shop have both been widely imitated by others who created many jobs in the process.

* Consider the economic collapse that followed fast track land reform in Zimbabwe, because the newly installed farmers didn't know enough about how to carry on the agribusinesses that had previously been run by mostly white plantation style farmers:

Before 2000 land-owning farmers, mostly white, had large tracts of land and utilized economies of scale to raise capital, borrow money when necessary, and purchase modern mechanized farm equipment to increase productivity on their land. As the primary beneficiaries of the land reform were members of the Government and their families, despite the fact that most had no experience in running a farm, the drop in total farm output has been tremendous and has even produced starvation and famine, according to aid agencies. Mostly crops for export have suffered severely, e.g. Zimbabwe was the world's 6th largest producers of Tobacco in 2001. It produces nowadays less than 1/3 of the amount produced in 2000, the lowest amount in 50 years. Zimbabwe was once so rich in agricultural produce that it was dubbed the "bread basket" of Southern Africa, while it is now struggling to feed its own population. About 45 percent of the population is considered malnourished.

The problem is not that black Zimbabweans can't run productive farms. I would have done no better than any of the beneficiaries of land reform. The problem is that the people who were given land to farm didn't have the skill set at the time to do it. A small managerial elite did have those talents and that knowledge was one component necessary to create a productive agricultural system in Zimbabwe, and removing the elite before a new one had been trained, had led to the collapse of the entire system.

* Consider franchises and branch stores of successful retail and service businesses. Once on person establishes a working business model, many others follow on to implement that proven business model and they in turn hire may people for their local operations.

* One of the persistant tropes of fairy tales and fantasy, because it has a certain residual nugget of truth to it, is of a erstwhile prince or princess down on his or her luck turning a dismal home into a place worth living, or organizing a lot of local people into a mass movement that gets something done. Call it the "community organizing" of President Obama's youth, or pull this concept out of a handbook on how to run a counterinsurgency campaign, the idea is the same. Even "The Lord of the Flies" extols the immense impact of a cohesive group of people who can organize themselves. World War II POW Camp narratives relate the way that the British more swiftly self-organized and became a functioning whole relative to American POWs who had trouble reaching consensus around leadership and authority within their POW community.

* My strong suspicion is that one of the main reasons that the Islamic Empire swept most of the known world around 700 CE so quickly is that the new system it created organized communities that had previously been disorganized, and by doing so, made them more functional. Christianity in Africa, mostly off the radar screen of American journalists, is doing something very similar today.

* One of the classic ways to end employment is to start a war. This works for two reasons. First, it creates a vision with all sorts of worthwhile things that need to be done. Second, it creates an end that is declared by fiat to be worthwhile.

* The habit of fitting workers to worthwhile tasks that the military develops can carry over into peacetime. This habit probably plays a large part in the pivotal role played by militaries in undeveloped economies from Egypt to China in the non-military economy.

* As noted in a biography of Dan Quayle, who made job training legislation his signature issue in Congress before he was tapped to be Vice President, no job training program ever implimented by Congress has worked very well. This makes a great deal of sense if entrapreneurial job creation failures by that elite, rather than a lack of job skills in the labor force, is the main culprit in unemployment.

* This fits the heuristics about idea exchange that are used to explain why economic productivity is exponentially related to urban population scale, and why some communities that are open to new ideas (like Boulder and San Francisco) over perform other communities given their scale. Richard Florida's work on localized economic development leads to similar conclusions. Idea exchange among elites in large, perhaps shallow networks is critical to economic growth. Economic growth happens better in communities where relationship networks look more like Facebook networks and less like tight knit, high social capital villages of the kind identified by Putnam.

* Consider that most of the most obvious things that separate Third World living from life in the developed world are carried out in the United States by non-partisan local government officials according to best practices that are mostly so uncontroversial that they never become a subject of political debate in the United States: good water and sewer services, regular trash collection, paved local roads, traffic laws that are routinely followed, widespread K-12 education, building codes enforced by non-corrupt building inspectors, property and sales taxes that are collected by non-corrupt local officials, police forces that are mostly not engaged in any political conspiracy more grand than to arrest criminals and maintain order. Indeed, real estate developers routinely put together new communities in "virgin territory" on these same principles every day and there are tens of thousand of professional city managers in the country (as well as many amateur local elected officials) who make them run smoothly. Many of the residents of these communities aren't exceptional in any way, and indeed, many of the elected officals charged with running these communities wouldn't know how to run them, but do know that one hires a city manager and that it gets done. The clear vision of the people establishing these municipal services held by a very small elite reproduces a modern functioning version of American society in first world style.

* Governor Hickenlooper, like most Governors interested in economic development, has rightly focused his short term job creation efforts on tapping the skills of highly talented retired or semi-retired corporate managers in Colorado who have created jobs before and know how to do it and are interested in contributing to the economy of their new home state. His intuition is right, because the highly networked, highly skilled people who make connections that other people failed to, in ideas and in people, are the ones who create most jobs. Jobs need boosters and entrapreneurs to be created.

Job creation is the process of finding something worthwhile that people in the labor force can do and then repeating it rapidly until it stops working. The people up come up with those business models create vast numbers of jobs, many of which they will never receive credit for creating. A few good ideas can create thousand or even hundreds of thosuands of jobs.

The skill set involved in creating these jobs is only partially academic. Even business school, either at the undergraduate level or the MBA level, doesn't fully capture what is necessary to be a prolific job creator. It also takes large personal networks, strong people skills, and the mix of skill and good fortune needed to identify ways to monetize worthwhile things that can be done with available labor (I say monetize rather than finance, because borrowing money or raising capital is a distinct issue from development a business model that turns meaningful work into business revenue.) And, more than any of these things, it takes a clear vision of what needs to be done that is true. A clear, valid vision of a way to make an enterprise work is more important than anything else in creating jobs.

Implications

One key implication of a theory of unemployment that focuses on the skill sets of entrapreneurs rather than the skill sets of rank and file workers, is that it dramatically shifts the natural conclusions about what kind of educational efforts are necessary to reduce unemployment. If a failure to perform on the part of elite is the problem, then doing a better job of providing them with what they need to make the economy thrive and create jobs matters more than training for rank and file members of the labor force, particularly those rank and file members of the labor force who were perfectly functional employees before an economic downturn hit.

There may indeed be individual skill gaps, but this is probably a fairly small part of the problem -- functional employees in one job setting can usually work at a job of comparable responsibility in another job setting in a different industry with only modest on the job training. There may be some technical skills that are in short supply, but my sense is that this is rarely the big bottleneck. Often, when there is a shortage of properly licensed and certified workers, the problem is more one of loosening barriers to entry so that people who can actually do the work are allowed to do so than a lack of actual ability. Similarly, in the tech boom the computer industry routinely hired people with the right computer skills before they graduated from college, because the demand was so great, even though jobs of that level of sophistication are usually reserved for college graduates in sectors of the economy that aren't growing so fast.

Another implication is that the biggest part of a government response to unemployment may be to inject organization into the economy by finding worthwhile things for unemployed people to do until the private sector can come up with something better. No government worth its salt can't find something it wouldn't like to do, and since it has to pay the unemployed something whether they work or not (not only unemployment benefits but a wide variety of other benefits), why shouldn't it use those resources to directly hire people to do things that are worth doing? As long as the pay is not so high in "make work" jobs that it drives up labor prices to high for when the private sector can find work to do, this shouldn't harm a recovery and prevents waste caused by a massively idle labor force.

A third implication of this analysis is that is greatly recasts the role of immigration in employment. A lot of immigration rather than filling some fixed quanity of jobs in the economy, creates jobs by bringing in entrapreneurial individuals who know how to creat jobs. In times of cyclical downturns in employment it makes particular sense to engage in an active policy of brain drain calculated to bring elite potential job creators to the U.S., rather than closing the doors on the grounds that the U.S. needs to reserve jobs for its own workers. Jobs are created by exceptional individuals, and people who are willing to cast aside the culture and world they grew up in, in order to make a better economic life for themselves disproportionately have the drive and visions that it takes to create jobs, and will tend to return home discouraged if they don't.

Unanswered Questions

This view of unemployment comes with unanswered questions. Why do entrapreneurs fail to come up with worthwhile things to do that they can monetize when the economy goes into recession? What are they missing? How can you measure that failure? What distinguishes someone who is capable of prolifically creating jobs from someone who is capable of filling a job competently but not likely to create one? What kind of stimulus fosters more connection making and creates a better climate for implementing entrapreneurial visions? How do you get people to change gears? Can economic indicators better tailored to capture this critical job creating component of the economy help us better understand unemployment?

Still, you can't get the right answers until you ask the right questions, and I am convinced that most people thinking about the issue of unemployment in politics and mainstream economics and the media are not asking the right questions.

Goldman's Regulating Reputational Information

Internet law blogger extraordinaire Eric Goldman's book chapter on regulating reputational information is now available at SSRN. Per the abstract:

This essay considers the role of reputational information in our marketplace. It explains how well-functioning marketplaces depend on the vibrant flow of accurate reputational information, and how misdirected regulation of reputational information could harm marketplace mechanisms. It then explores some challenges created by the existing regulation of reputational information and identifies some regulatory options for the future.

I particularly like his operational definition of "reputational information," as:

[I]nformation about an actor’s past performance that helps
predict the actor’s future ability to perform or to satisfy the
decision-maker’s preferences.

and his notion of “reputation systems” that aggregate and disseminate reputational information to consumers of that information, as a discrete concept.

He notes that immunity from liability and the reputation of reputation systems themselves may be more effective than government regulation of reputational information, but identifies emerging concerns such as "ex ante consumer gag orders" in contracts with vendors and service providers, which may deserve scrutiny under void as against public policy doctrines or may require statutory regulation.

Patterns of Divorce

Most marriages that end up in divorce were horrible from day one, but some are good for a while before going bad according to a new study.

About one in three newlywed couples gets divorced within 10 years, but their paths to breaking up differ. . . . A majority of new husbands and wives who display negative personality traits, communicate poorly with each other and experience unrelenting stress in their lives split up in the next 10 years[.] Among couples whose marriages do well for several years . . . divorce occurs for nearly 20 percent, apparently because poor communication skills eventually undermine the union.

The study by Justin Lavner and Thomas Bradbury at UCLA interviewed and tracked 172 newlyweds for ten years.

The hopeful side of this news is that it suggests that most divorces may be preventable through better attention to the compatability of couples in the first place.