Years ago, when an editor asked me if Boeing would be around to pay off a 100-year bond it had recently offered, I flippantly replied that 100 years was only two product cycles for the company.
I underestimated the duration of its products. The Boeing 747 first flew in 1969 and a freighter version will continue to be built near Seattle at least through 2022. The Boeing 737, which first flew in 1967, faces an order backlog that extends through 2027. An all-new replacement for the commuter workhorse is unlikely to appear until the 2030s.
Which makes all the more anomalous Airbus’s decision to end production of its impressive and giant A380, which has been flying only since 2005.
Socialism is currently in vogue. If the word means anything in today’s context, it means projects of unusual government ambition, built on our globally shared capitalist technological and commercial base. The A380 was exactly such a project. Underwritten by massive European government subsidies, the plane was an engineering sensation. Passengers loved the roomy jet. Yet now it’s kaput. What went wrong? Or to phrase the question more usefully, what technological and commercial realities would its sponsors have had to overrule to assure its success?
The list is not a short one. They would have had to overrule the desire of passengers to fly direct, bypassing the crowded hub airports (like London’s Heathrow) for which the A380 was built.
They would have had to overrule the preference of business travelers for frequent departures. With 535 seats to fill, the superjumbo was hopelessly matched against operators offering more convenient schedules by using smaller planes.
Most of all, they would have had to overrule the public’s appetite for lower fares. On a per-seat basis, a new generation of super-efficient twin-engine planes such as the Boeing 787 proved cheaper to operate even though the four-engine A380 could accommodate twice as many customers.
In the end, enough socialism could be mobilized to get the plane built, but not enough to make it commercially viable. Europe’s governments would have needed to extend their dominion beyond their own taxpayers who financed it. They would have needed to dictate to the world’s airlines and travelers and even the aerospace industry’s global supplier base, which proved unwilling to develop a new fuel-efficient engine for a plane with a doubtful future.
This should guide us in our thinking about what kind of “socialism” is possible today. Governments can tax their own people until they rebel at the ballot box, refuse to pay, or emigrate. They have no power, in our world, to dictate what kinds of goods and services and technologies (green or otherwise) the global marketplace will accept.
When the end came, it came because the A380’s last dedicated customer, the government-backed Emirates Airline of Dubai, gave up on the superjumbo. Planes in pristine condition were lingering unsold on the used-plane market. A 10-year-old jet was recently retired by Singapore Airlines . Now it’s being broken up for scrap, proving once again socialism’s knack for making grown men cry.
Boeing’s management was vilified at the time for declining to compete with Airbus to replace its own fabulously successful 747 jumbo jet. But Boeing treated its business like a business. Its forecasts showed the market was likely to evolve in ways unfavorable to another very large passenger plane.
French and German politicians ignored such considerations. They were more interested in making a showy statement about Europe’s technological prowess. Boeing chafed for decades at the subsidies they poured into Airbus. Airbus, for its part, was not above portraying the money U.S. taxpayers spent defending the free world as a backdoor handout to Boeing through its defense business. This debate is likely now to get an ugly second wind if U.S. negotiators insist that Airbus pay back the estimated $20 billion in “launch aid” the A380 failed to recoup (the answer will certainly be no).
The parallel to California’s bullet train hardly needs to be drawn. Gov. Gavin Newsom seems already to be walking back his apparent cancellation of the grossly over-budget project. He may hope that Green New Deal dollars from Washington will become available after 2020 to replace the funds California isn’t willing to provide.
In economics, the Jevons paradox (/ˈdʒɛvənz/; sometimes Jevons effect) occurs when technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the rate of consumption of that resource rises because of increasing demand.
.. In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal-use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological progress could not be relied upon to reduce fuel consumption.
.. Jevons observed that England‘s consumption of coal soared after James Watt introduced the Watt steam engine, which greatly improved the efficiency of the coal-fired steam engine from Thomas Newcomen‘s earlier design. Watt’s innovations made coal a more cost-effective power source, leading to the increased use of the steam engine in a wide range of industries. This in turn increased total coal consumption, even as the amount of coal required for any particular application fell. Jevons argued that improvements in fuel efficiency tend to increase (rather than decrease) fuel use, writing: “It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth.”
The GOP senators insisted that the tens of billions in cuts to federal health spending proposed in the bill would not result in coverage losses because, they said, the states would have more flexibility.
.. The GOP senators insisted that the tens of billions in cuts to federal health spending proposed in the bill would not result in coverage losses because, they said, the states would have more flexibility.
Sen. Pat Roberts (R-KS):
“If we do nothing, it has a tremendous impact on the 2018 elections”
.. as a general rule the states do things better than the federal government does [things]. And that is essentially what the bill is
.. I think the efficiencies that come with transferring the funding to the states can very well make up the difference between what the federal thing would be.
Sen. Ted Cruz (R-TX):
“It lets states innovate and adopt creative solutions”
the heart of the legislation takes the policymaking role of Washington and sends it to the states. It lets states innovate and adopt creative solutions to local problems, which vary state by state.
But it’s not just devolving power from the federal government to the state. It also involves a 16 percent cut in federal spending [upfront] and a 34 percent cut over the next 10 years.
.. Ted Cruz
CBO’s analysis throughout this process has been ridiculously slow, unreliable, and based on policy assumptions that are demonstrably false.
You really believe that cutting federal spending by 34 percent will not result in any other people losing their insurance?
What federal spending is cut?
Well, the Medicaid expansion would be sunset, for one, is my understanding.
The decrease in future rates of growth is not a cut. And it is only in the bizarre world of Washington that billions more money is characterized in the press as a cut rather than an increase, which is in fact what it is.
Sen. John Kennedy (R-LA)
.. I have sent four amendments to Lindsey [Graham] and Bill [Cassidy] that I think will strengthen the bill. The one I feel most strongly about is that I want the Medicaid work requirement — I don’t want it to be optional; I want it to be a requirement. Just like we did with welfare reform.
.. number two, I want to get us to give guardrails to the states to say, “You cannot use these moneys to set up a state-run single-payer system.” I don’t believe in it. I think it’s a mistake.
[Guardian reporter] Lauren Gambino
Do you think that kind of goes against the idea of states’ rights and being able to use this money [as the states want to]?
No, no. We have plenty of federal rules that apply to every state, but we still agree with states’ rights.
I think it spends scarce resources in a more rational manner. It will control costs. I like the idea that it encourages states to innovate.
How does it do that? Any of those things?
Well, you need to read the bill.
Well, you’re voting for it, right? So what is the explanation for how it does those things?
I am. Because it gives states added flexibility. Read the bill and you’ll understand.
The bill would cut federal funding to states by 34 percent over the next —
But it wouldn’t cut Alabama, though.
Well, do you think the other states should deal with —
Well, you see some of our states, four of our states, are getting a disproportionate amount of money from health care now. You know which ones.
.. Sen. Johnny Isakson (R-GA)
What is the policy explanation for the Graham-Cassidy health care bill?
Policy explanation? I’m not into policy, so I don’t really know. I’m into facts.
[In a follow-up interview hours later on Tuesday] You were joking earlier, but what is the health policy in the Graham-Cassidy proposal that you like?
More state innovation. More input from the states.
.. Johnny Isakson
The governors — I’m from a state that didn’t expand Medicaid, and the way we were going in health care looked like those states would actually be hurt worse than other states.
By going to block grants, back to the states, the control of money stays with the states, and you have less [un]predictability and external deviation in terms of funding.
.. Jeff Stein
So just a follow-up on that. It’s one thing to say the bill gives the states power — that’s one thing.
But it doesn’t just do that. It also cuts the money they have — some estimates say around 16 percent of federal funding.
I’m not going to confirm that statement one way or another. I don’t know what the numbers are going to end up looking like.
Right, but if it does cut federal spending overall, would you support it?
You know, those are dangerous questions. I’m waiting until I see the totality of the legislation to say whether I support the whole thing or not, anyway.
I’m not a no, but I’m not a yes either — and I’m waiting for my governor to respond to me with their input as well. It’s really key what they’re doing.
.. Sen. John Barrasso (R-WY):
“The governors who decided to expand [Medicaid] knew that they were going to lose federal funding”
I want to ask, in a big-picture way: What is the policy explanation for how this bill makes people’s lives better?
It gets the money out of Washington, lets people at home make the decision, and gets state legislatures involved, and governors involved. It moves money out of Washington. It’s away from socialism.
CBPP says it will also reduce federal health spending on Medicaid and the exchanges by about  percent.
I’d love to reduce federal spending on health insurance.
Right, but so it’s not just about moving power to the states — it’s also about cutting funding.
It’s about moving power to the states, where money can be spent much more effectively.
How does it do that?
Well, you have to read the formula and read the bill, and it will tell you how it moves money to the states and how much they get and how much they don’t get. …
There’s a concern from Republican governors who have come out and said, “This is too dramatic a cut in spending; we won’t have enough money to insure everyone.”
You have to interview them on that.
Do you think they’re wrong?
Well, it depends on if they’re states that expanded Medicaid or not. …
In the Medicaid expansion states, they still have a lot of people who rely on Medicaid expansion for health insurance.
I opposed Medicaid expansion. I think the Supreme Court got it wrong [when it ruled in 2012 that Congress did have the constitutional authority to implement most of Obamacare].
The governors who decided to expand [Medicaid] knew that they were going to lose federal funding over time, and they’re objecting to that — but they knew it. You could say, “Some of them didn’t understand it, and so-and-so wasn’t there, and he wasn’t governor yet,” but they understood that this would be part of the process. So if they used the money poorly —
And my concern with Medicaid is that the people who Medicaid was designed for originally have been cut out of the process, because they’re still on the waiting list to get on Medicaid. I don’t know how much you understand about Medicaid, but this whole expansion of Medicaid went for healthy, working-age individuals — it did not go for the people who [Medicaid] was designed for, which was low-income women, children, and the disabled.
.. Sen. Chuck Grassley (R-IA):
“This is the last attempt to do what we promised in the election”
.. Chuck Grassley
Let me give you a political answer, and then I’ll give you a substance answer.
The political answer is that Republicans have promised for seven years that we were going to correct all the things that were wrong with Obamacare, and we failed the first eight months. This is the last attempt to do what we promised in the election.
The substance answer is that Obamacare starts with the principle that all knowledge about health care, and all decisions on health care, ought to rest in Washington, DC. The complete opposite of that is Graham-Cassidy, that Washington doesn’t know best and we’ll let each of the 50 states [decide what’s best].
Production efficiency methodology that breaks every action, job, or task into small and simple segments which can be easily analyzed and taught. Introduced in the early 20th century, Taylorism (1) aims to achieve maximum job fragmentation to minimize skill requirements and job learning time, (2) separates execution of work from work-planning, (3) separates direct labor from indirect labor (4) replaces rule of thumb productivity estimates with precise measurements, (5) introduces time and motion study for optimum job performance, cost accounting, tool and work station design, and (6) makes possible payment-by-result method of wage determination.
Named after the US industrial engineer Frederick Winslow Taylor (1856-1915) who in his 1911 book ‘Principles Of Scientific Management‘ laid down the fundamental principles of large-scale manufacturing through assembly-line factories. He emphasized gaining maximum efficiency from both machine and worker, and maximization of profit for the benefit of both workers and management. Although rightly criticized for alienating workers by (indirectly but substantially) treating them as mindless, emotionless, and easily replicable factors of production, Taylorism was a critical factor in the unprecedented scale of US factory output that led to Allied victory in Second World War, and the subsequent US dominance of the industrial world. See also Fordism.