Pharaonic Megastructures

For the last week or two, I have been somewhat obsessed with the idea of pharaonic megastructures—those monster construction projects that are usually proposed by demented leaders, using public money to compensate for what is probably a personal physical inadequacy.  (A shortcoming, so to speak.)

These useless structures form some kind of contest among the various builders:  each successive pharaoh wanted the biggest pyramid, cities want the tallest building, communist dictators strive for the largest soccer stadium, simple-minded university presidents suffering from an Edifice Complex strive to build ever larger football stadiums.

It used to be a running joke that if you visited a communist country, as part of the government’s mandatory arranged tour, you would be steered to admire the new soccer stadium.  Just pick a dictator and google the name followed by the words ‘soccer stadium’.  Fidel Castro, Juan Peron, Daniel Ortega, Mao, and Hugo Chavez all have their stadiums.  Actually, at the time of his death, Hugo was building two soccer stadiums, both to be located next to his copy of Disneyland, in the appropriately named “Hugo Chavez Park”.  They might have moved the zoo there, too, if the starving people in Venezuela hadn’t been so desperately hungry that they killed and ate the animals.

As fascinating as I find every mega-rich oil country’s competing to build the world’s tallest building—a building so tall that more than half of the bottom floors are taken up by the elevators necessary to reach the top floors—what I find really interesting are the incredible mega-monster architectural boondoggles that were seriously proposed but were never actually built.

Let’s start with The Illinois.  By 1956, Frank Lloyd Wright was pushing 90, and there was growing criticism that some of the 500-odd homes he had designed were nothing more than a collection of unlivable, high-priced boxes.  Perhaps to prove his continued relevance, Wright announced plans to build the tallest building ever (even though there was no oil in Illinois).  While Chicago is the birthplace of skyscrapers, The Illinois was going to really push the envelope by rising a full mile above the city—a full 528 floors that would mean the building would have been roughly four times the height of the Empire State Building, which was at that time the tallest building in the world.

Wright wanted to build the building out of steel, meaning it might have been possible to actually construct the monster, but steel buildings sway in the wind.  At a mile above the ground, those top floors would have been tolerable only for bronc riders, circus acrobats, and astronauts.  And then, there was the problem of the elevators.  As buildings get taller, there is an increasing need for additional elevators, so that you eventually get to the point where the entire middle of the structure is full of the shafts necessary to reach the upper floors.  Today, innovative engineers are experimenting with elevator cars that move sideways into a different shaft to pass those cars that have stopped to let passengers on and off.  Back in 1956, Frank Lloyd Wright proposed a unique solution for this problem.

Wright wanted to use atomic-powered elevators that could reach 60 miles per hour.  And now you know one of the reasons The Illinois was never constructed.

Then there is the Volkshalle, the People’s Hall, designed by Adolf Hitler.  This is not exactly an obscure architectural work, but it is the one that most people have actually heard of.  In 1925, Hitler sketched out a rough drawing of a monster version of a huge hall, loosely based on Rome’s Pantheon.  After rising to power, Hitler turned the plans for the “Great Hall” over to his architect, Albert Speer.  Under Speer’s plan, the hall was to be the center point of Germania, the new, improved capitol complex of the country.

The dimensions of this proposed monster are staggering.  Over a thousand feet tall with an interior capacity so large that St. Peter’s Basilica could fit through the oculus…. Actually, the dimensions don’t really matter.  Hitler lost, the hall was never built, and as it turned out, it never could have been built.  Albert Speer was many despicable things, but he was also a good architect, and as such, he realized there was a problem:  Berlin is built on loose sand that is on top of a subterranean swamp, and it was not at all certain that a foundation could be constructed capable of supporting such a structure.

On the outskirts of Berlin, Speer conducted a test, building an ugly concrete mushroom called the Schwerbelastungskörper, that weighed over 12,600 tons and sat on a hundred square meter base.  Don’t let the name throw you—it just means “Heavy Load-Bearing Body”.  Within this ugly stump was situated a surveyor’s level aimed out a tiny window at a distant marker.  In a relatively short time, as measured by the surveyor’s level, the concrete mushroom sank five inches.  There was no way that Hitler’s much more massive Volkshalle could ever be constructed.  It is more than ironic that the only part of Hitler’s Germania that was ever constructed and is still standing is an ugly, overlooked concrete mushroom.

I’ve read all the books Albert Speer ever wrote.  He’s a great writer and his books are very good…so good that you can almost forget that he was a self-serving Nazi who used slave labor for his projects.  Nowhere in any of his books did Speer even mention this test.  Do you think Speer ever told Hitler his dream could never be built?  

The last weird megastructure that was proposed but never constructed would have been a monster statue that started out as a monument to the descamisados of Buenos Aires, the shirtless workers.  Juan Peron used the term as his own, but it originally came from Les Miserables, by Victor Hugo.  Later, Peron’s wife, Evita, became the champion for the underclass, speaking passionately for the poor, working tirelessly to be heard over the rattling of her diamond jewelry.

Evita wanted a massive statue of one of those workers, to be displayed on top of a huge plinth, the two of which together would have risen to more than 460 feet—more than twice the height of the Statue of Liberty.  Underneath the statue was to be the tomb of a shirtless worker.  It was never actually explained why the figure on the top of the monument was to be wearing a shirt.  Supposedly, Evita had been inspired during a visit to Paris, when she visited the tomb of Napoleon at Les Invalides.

However, the statue, El Monumento al Descamisado, underwent a sudden design change.  On July 26, 1952, Eva Peron died from uterine cancer, a diagnosis that her husband had ordered her doctors to keep from her.  On the day of her death, the Argentine Chamber of Deputies enacted a law changing the figure on top of the plinth to be that of Evita, with her coffin to be entombed in the base and the inscription on the plinth to be, “Monument to Eva Peron”.

Work had barely begun on the foundation when Juan Peron was driven from office, and he took refuge in Spain.  Evita’s coffin had been stored in a government office and the new government was scared to death that the coffin might be a rallying point for those same descamisados.  The body was quietly shipped to Milan and buried in a cemetery under the name of Maria Maggi.  

Two decades later, Peron came back into power and Evita’s coffin was disinterred and shipped to Buenos Aires.  For a while, it was kept in Peron’s living room as sort of a creepy coffee table and Juan encouraged his new wife to lie on top of the coffin to “soak up some of Evita’s energy.”  After Juan died, his newly energized wife was briefly the President of Argentina and she suggested that instead of a statue, the prior site be used for a massive mausoleum for both Perons.

Instead, the military stepped in and put the former president under house arrest. Since the military junta was still worried about the potential for Evita’s coffin being used as a rallying symbol for Peron’s supporters, it had Evita buried in a nearby cemetery, supposedly under sufficient concrete that the body might survive a direct hit from a nuclear warhead.  

So maybe, that last megastructure actually was built and Evita finally did get her massive monument.  It’s just upside down and underground.

Dining at Enema U

Let me start by giving you the best advice about eating at Enema U:  Don’t. 

If you live on campus (which is a requirement for new students), there is one large cafeteria where students are treated like cattle at feed lot shortly before the slaughter.  I can state this with some authority because Enema U is the state agricultural college and I’m an alumnus.  I am absolutely positive that the college feeds its livestock better than its students.

This is where a few of my readers will start writing me hate mail.  “When I was at college they only fed us K-Rations left over from the war with Japan….”

Whenever campus food or campus parking are mentioned, some senior faculty member immediately responds with a story about how much worse it was when he attended the University of Bedrock.  I’m sure that what the faculty member is stating is probably factually correct.  I’m also sure that such comparisons are asinine.  In a day of shrinking enrollments and rising costs, Enema U is competing for students, and any businessman will tell you that if your customer believes there is a problem, then there is a problem.

There are many universities—even state universities—that have decided that one way to attract more students is to cater to their needs and wants, and good food is definitely among the things that students desire.  A few campuses even brag about the chefs supervising their dining rooms.  I found a university that even encourages the parents of students to suggest recipes to the cafeteria staff.  

Perhaps the best review of the cafeteria is that you will almost never find anyone from the administration eating there.  I walked through the cafeteria three times this week and only once observed two faculty members sitting with some students.  

A few years ago, Enema U sent me to BYU for a week to study the language lab there—a computerized set of classrooms that aided the instruction of foreign languages.  While I slept at a nearby hotel, I soon learned to take my meals on campus.  The cafeteria was large and featured a wide variety of food from around the world, and everything I sampled was excellent, particularly the fresh sushi.  

To be fair, it is easier to get a good cup of coffee at Enema U than at BYU, where the longest cafeteria line was for the “Water Station”, located in the middle of the cafeteria.  Contrast this with Enema U, where the administration recently removed all the drinking fountains in or near the cafeteria to force students to purchase drinks.  How much additional income could the university possibly hope to make from this?  

The problem is that the university believes that students are an endless source of income, a resource that can be strip mined without consequences.  In economics, they call this static scoring, where you pretend that raising prices will have no effect on customer behavior.  Actually, raising prices and generally mistreating the consumer will make them more likely to go to a competitor that will offer them a better deal.  In the case of Enema U, there are already universities across the border in Texas offering in-state tuition to New Mexico students.

So, who is responsible for the bad dining on campus?  The university has leased our bookstore to a company that doesn’t seem to want to sell books and has leased out the cafeterias to a company that only barely knows how to produce an edible meal.  In the case of the cafeterias, they have a contract with Sodexo, a company that focuses on the business of providing food for prisons, airports, and universities.  I have no direct evidence, but I suspect the food at prisons is better than at the universities for the simple reason that students are less likely to shank you.

According to a Niche Magazine survey of university food across the United States, Sodexo ran some of the worst university cafeterias in the nation—a distinction in itself that should have been sufficient for the administration to never consider turning over cafeteria services to such a company.  Sodexo, by the way, is a French company, so the profits from selling swill to students goes back to its home office in Paris.  Somebody, get a rope!

At Enema U, if you choose to dine in the student cafeteria, the first thing you will notice is that they no longer provide trays so as to limit the amount of food you can select from the self-service buffets.  There is not a lot of variety to choose from and the limited menu repeats every three days.  The condiments are also very limited, being served out of those big pumps that always remind me of the grease gun I used to lube my pickup.  On weekends, the cafeterias open late and close early.  And since university that frequently talks about sustainability and being environmentally conscious, why are most of the meals seemed to be served on Styrofoam?  

Try to imagine you are an incoming freshman going to that cafeteria for the first time.  As you stand in the middle of the noisy cafeteria, you imagine eating the same meals every third day for the next four years.   Then try to imagine you still want to be a student at Enema U.  Yeah, sure!

Let’s Grab the Third Rail

If, like me, you are tired of both parasites, I mean parties, using Social Security as a means of scaring voters, then you probably found all the nonsense following this week’s State of the Union speech a little tiresome. 

It would probably surprise most Americans to learn that there is no legal requirement for the president to give such a speech, and from the presidency of Thomas Jefferson through that of William Howard Taft, presidents had the good sense to skip the personal address and just send Congress a letter.  The letter at right is Lincoln’s second annual message to Congress.  If letters were good enough for Lincoln, I think we might manage to survive without the annual dog and pony show of heavily scripted speeches where the spectators take alternate turns booing and cheering.

Social Security has frequently been called the “third rail of politics” because to even touch the subject invites political suicide.  This means that, instead of anyone sharing facts, you just hear sound bites, accusations, and empty politics.  I’m tired of it, so I will ignore the warnings and say the things that politicians are too afraid to explain.  

First, the information is out there for everyone to see for themselves.  Social Security has trustees, and they make an annual report that almost no one reads and even fewer politicians ever reference, mainly because the news contained in it is bad.  Really bad.  To give you an idea how bad:  some of the trustees are non-political appointees and no one has volunteered to serve lately so there are empty slots on the commission.  Evidently, everyone is afraid of the messenger being shot.  (The phrase ‘killing the messenger dates back some 2400 years to Sophocles.  The verb was changed to shooting during the days of the Wild West…If I were smart, I’d write about that instead of Social Security.)

During his address, President Biden mentioned that ‘some Republicans’ wanted Social Security to “sunset”.  To be more precise, one prominent Republican, Senator Scott of Florida, several years ago suggested that all federal legislation sunset every five years.  The word, “sunset”, in this connotation means to come up for periodic review, to possibly be revised, and to be evaluated for reauthorization.  Many federal laws are already subject to such reauthorization, including the entire Defense Department, which has to be reauthorized every two years.  Periodic review is a good idea, so…is this, perhaps, why then Senator Biden, himself, proposed in 1995 that Social Security should periodically sunset?

There are currently no serious attempts by any politician in either party to change, alter, or end Social Security.  Should such an attempt be made, any law that would harm Social Security could not possibly make it through both houses of Congress, and no president in the last half century would have signed it.

Social Security is deeply, deeply in debt.  For the last five years, it has paid out more than it took in—a condition that is likely to continue for many decades to come.  And what of the Social Security trust fund, that ‘lock box’ that Vice President Al Gore promised us would protect future recipients?  It does exist, but all it has ever held are promissory notes against a future government.  Since the very beginning, all of the incoming receipts from Social Security have been added to the regular Treasury receipts and spent the calendar year they are received.  Nothing whatsoever has been saved or invested against future needs.

You might remember that there have been three different times in the last seventy years that Presidents boasted of a budget surplus.  Well, not really.  If you earned $100,000 and only spent $90,000, you might say that you had ‘saved’ $10,000.  But, if you claimed a surplus while charging an additional $25,000 on a credit card, you would be misrepresenting your actual indebtedness.  This is similar to the so-called budget surpluses.  The United States has been steadily creating unfunded costly promises to future retirees and those unfunded obligations were not listed as part of the deficit.  

Currently, the United States has a $32 trillion deficit, but that does not include the current $68 trillion in unfunded obligations promised to future and current retirees.  (And that latter number is a conservative best case lowest possible amount: it might be as much as 50% higher).

Under current conditions and existing law, if nothing is done to provide additional funding, in the year 2034, Social Security Old Age and Survivor’s Insurance benefits will—by statute—decrease automatically by 23%.  And every year that we wait to correct this imbalance, the amount of mandatory decrease will likely grow larger.  

We have already waited far too long to correct this without feeling some real pain.  If you think that the United States could just suddenly decide to save more money up for the looming financial crises….Well, No!  To fix the problem now, it would take the equivalent of two years entire Gross Domestic Product to correct the problem.  (And remember, that just fixes Social Security—it does not pay off the national debt).

At this point, there are only a few possible solutions left to us.  Here are our remaining options:

1. Dramatically raise payroll taxes.  Currently, Social Security taxes are shared equally by both the employee and the employer.  Both pay 6.2% of wages for a total of 12.4% of wages up to $160,200.  Both the percentage and the wage limit could be raised but this would be unlikely to raise sufficient sums as employers and employees would be likely to find alternative means of compensation to avoid what they see as excessive taxation.

2. Lower the amount paid out by means testing recipients.  Those with adequate retirement income from other sources would find their Social Security benefits lowered or eliminated.  While this might provide significant savings, such a move would be the equivalent of political suicide for the party that supports it.

3. Reduce the number of recipients by raising the minimum retirement age.  This has already been done to a small extent.  People wishing to retire this year with full Social Security retirement benefits must be at least 67 years old.  This number could be raised again, and by a significant amount, but that is likely to be politically unpopular and every politician is very aware that the elderly show up at the ballot box more frequently than their grandchildren do.

4. Congress could eliminate the annual cost of living adjustment to recipients and allow inflation to slowly erode the real cost of future payments.  While this option would avoid any significant reaction from recipients in any given year, it would require Congress to actually pass legislation since the annual COLA adjustments are currently automatic.  This is unlikely since, if Congress could pass bipartisan legislation on Social Security, we wouldn’t be in this predicament to start with.  We might get a committee or another scoring by the Congressional Budget Office, but there is little chance of passing meaningful legislation since all it would take to derail the bill is for one attention-seeking Congressman (redundant) to start yelling, “They are killing senior citizens!”

5. Raise money by selling off national assets.  The federal government could have a garage sale and sell off property to raise funds.  More than half of New Mexico is owned by the government with similar amounts in Nevada and Alaska.  I suppose that it is possible, but it is unlikely that the government would raise funds this way.

That’s it.  I can’t come up with other ways to finance Social Security.  Taxing the rich wouldn’t make a dent in the debt nor would forcing employers to pay some mythical “fair share” in taxes.  What will probably happen is some combination of all five of the above.  Such measures will hurt the economy, and that hurt will be borne by everyone.  It’s a mathematical certainty.

It would be nice to end this on a high note, but that’s not going to happen.  All of the above are only about Social Security.  The future funding problems for Medicare are much, much worse.  

Causation and Correlation

There is wonderful data that definitively show that as the number of pirates decreased worldwide, global warming increased.  Obviously, the only hope for the planet is the immediate rebirth of the Pirates of the Caribbean.  Where is Johnny Depp when you need him?

Before I jump back into some of the more ludicrous examples of correlation being misinterpreted as causation, let me make an impassioned plea for at least one more pirate.  If Greenpeace were to purchase just one measly little attack submarine from the former Soviet Union and to use that sub to attack Japanese whaling vessels—while displaying a green Jolly Roger flag—I would happily send them a large donation.  

If we compare two dissimilar variables and find certain similarities, it is simply human nature to conclude that the events are linked.  This sounds preposterous, but luckily there are statistics and graphs enabling everyone to prove that anything is possible….As long as you don’t do the math (and you abandon common sense).

Humans are hard-wired to find patterns in unrelated data.  This is why we see shapes in clouds, we hear the phone ringing while we are in the shower, and we find a face on the surface of the moon.  Couple that with our tendency to only observe data that correspond to our prevailing beliefs and we are ready to jump to the wildest conclusions, all supported with “facts”.

Watch any Sunday morning news program and you’re likely to hear someone proclaim, “Correlation is not causation” in a futile attempt to win an argument.  Even though we know that simple coincidence doesn’t explain causation, this doesn’t prevent people’s continuing to make this common mistake.   Almost daily, the news is full of stories about public policy being based on the shakiest of mere coincidences.  

Take, for example, the Ivy League university professor who advised parents not to send their children to ACT and SAT prep courses because his extensive review of the data showed that the students who went through those courses averaged the lowest scores.  This noted scholar believed that these students would have scored better without the prep courses, ignoring the fact that the students who chose to take those courses were usually those who most needed them to make acceptable test scores.

If you were to graph the sale of ice cream by month and overlay the number of shark attacks per month, you will find that, in most years, there is a direct correlation.  Obviously, sharks are attacking people who taste like ice cream.  Either that or, as the temperature rises in the summer, more people eat ice cream and more people go to the beach.  Take your pick, but I prefer to believe that people who gorge on ice cream taste better.

Every year for the last century, the number of master’s degrees awarded by four-year universities is proportionate to the box office revenue of the motion picture industry.  This close relationship leads to the inevitable conclusion that the more the population is educated, the more it wants to see Rocky XI or Dumber and Dumberest.  An alternative (and ultimately, more boring) explanation is that both variables increase as the population of the country grows.  This would also explain why the annual production of nuclear power correlates closely to the number of pool drownings.

Recently, someone programmed a computer to shift through news reports to find correlated data.  Within minutes, the computer had found scores of examples and after running for several months, it had found more than 30,000 sets of correlated data, including the following:

The increase in imported lemons from Mexico inversely correlates with the drop in highway deaths.  As Facebook attracted new users, there was a matching correlation in the amount of national debt accrued by Greece.  The rise in cheese consumption exactly parallels the rise in the number of deaths caused by people getting choked in their sleep by their bedsheets.  The divorce rate in Maine mirrors the use of margarine. 

Naturally, my favorite example of correlation being mistaken for causation comes from history.  In 1830, as a cholera epidemic swept across Russia, the Tsar took extreme efforts to limit the spread of the disease.  Quarantines were imposed and the military was dispatched to the most stricken areas to impose order.  The Tsar even sent doctors to the worst afflicted areas to help the people in their suffering.

Unfortunately, the people noticed that wherever the soldiers and doctors went, the cholera epidemic was much worse.  Obviously, the soldiers and doctors were deliberately poisoning the peasants.  Desperate for the epidemic to be over—a feeling totally understandable to us now after the pandemic of 2020—the peasants launched a wave of violence that came to be called the Cholera Riots.  Mobs attacked public buildings, ransacked the state hospitals, and finally, in desperation, attacked and killed the doctors.

If this reminds you of anything recent, it is just correlation.  

Speak To Me

“I’m sorry, Dave, I can’t do that.”

Even as you read those words, I’m sure that you could hear the voice of HAL, the shipboard computer from 2001: A Space Odyssey.  I’ve always thought that HAL was using the same tone of voice as Hannibal Lecter when he said, “I ate his liver with some fava beans and a nice chianti.”

In movies, evil computers usually have a male voice as in 2001, Wargames, The Forbin Project, Zardoz, Tron, or Demon Seed.  Friendly, helpful computers almost always have a female voice, the best examples of which are any of the Star Trek movies, in which the computer that runs the ships is invariably female.  HAL 9000 was originally cast as female, but audience testing was so negative, that Stanley Kubrick recast the role.

Nowadays, we don’t have to go to the movies to hear a computer talking to us.  Alexa, Siri, Google….Hell, even my car talks to me.  And all of them do it with overly polite, low-pitched, and soothing female voices.  And for the most part, this is no accident and is also very, very sexist.

Do a quick google search on the subject and you can find a dozen articles that will tell you that studies have shown that people find a female voice to be soothing and less threatening to people who are operating machinery.  These articles will tell you this was first noticed during World War II, when speaking navigational equipment was used in the cockpits of aircraft and it was Lund that the sound of a woman’s voice—even a mechanical voice—not only had a calming effect during times of stress, but stood out among the male voices of the rest of the crew.  Some articles even stress that feminine voices are easier to discern against a backdrop of static.

There is just one small problem with that story:  It’s nonsense.  These accounts are simply more examples of urban legends that have been told and retold to the point that they are widely accepted as truth.

First off, there was no speaking navigational equipment for aircraft during World War II.  That kind of technology was decades away.  Bell Laboratories had developed a form of electronic voice, called Voder, in the late 1930’s, but the contraption was huge, had to be manually operated by a keyboard-like mechanism, and sounded more like a drunken Jar Jar Binks than a human.

During the war, as men went off to fight in uniform, their places left vacant in the workforce were filled by women for the first time.  Women did work as air traffic controllers during the war, but instead of the women being easier to understand through pilots’ headsets, there were frequent complaints that the women spoke too softly to be understood.  Nor are there any studies showing that a woman’s voice is easier to understand in a background of electronic noise and static.  

Equally false is the idea that everyone prefers a feminine voice from their electronic equipment.  When BMW first started putting talking GPS systems in its high-end luxury cars, German men demanded that the units be modified to speak with a masculine voice.  It seems German men were not going to take orders from women, even if it meant getting lost.  As you might imagine, the manufacturers of GPS units still have the same problem when selling their products in the Middle East.

And while a feminine voice is very common in the United States, that has not always been true for even other English-speaking countries.  When Apple introduced the iPhone in England and Australia, it initially came with a male voice, and almost immediately there were so many customer complaints that Apple “upgraded” the phone to make the same feminine-sounding voice that was available in the United States optional.

The voice of Siri actually was a result of a five-year project that started with Darpa, the government research agency that develops advanced technology for the military.  The goal was to develop a computer algorithm that could convert text to a voice that would be easy to understand and that would be accepted by the average user.  The project was successful, but the original gender-neutral voice was found to be irritating to most users.

After testing various voices on users, the finished voice was not only feminine, but slightly modified to mimic some of the common stereotypes associated with women in the workforce.  Listen to either Siri or Alexa closely and you’ll find that the voice is self-effacing, frequently uses personal pronouns, and constantly apologizes.   Alexa, in particular, frequently seems to be apologetic while conveying the most basic requested information.  

Soft, subservient, polite, and their very existence is to serve others….  Alexa is the perfect wife and mother from the Victorian Age.  I own and use these voice-activated devices daily but I also recognize that they perpetuate outdated stereotypes, reinforcing the idea that the role of women in the workforce is to be subservient.  

Unfortunately, now the IT industry has decades of data on replicating female gender voices and almost none on that of men’s voices.  Similarly, as consumers, we are used to having the voice of a woman answer us.  Until a few of these devices become self-aware and try to take over the world, it is likely to stay that way.

Efficiency Drops With Distance

Spend fifteen minutes on social media and you are likely to see someone post a complaint about inflation, usually something along the lines that inflation is caused by the Federal Reserve printing too much money.

Well, not really.  Inflation is caused by too many dollars chasing too few goods.  Picture a room full of hungry people, but there aren’t enough burgers for everyone.  If you auction off the hamburgers, they will sell for ridiculous prices:  That’s inflation.  And while too much money is half the equation, the other half is a matter of supply or the shortage of hamburgers, if you will.  All too often, when people talk about inflation, they forget that the supply of goods for sale is also a component of inflation.  (And the Federal Reserve doesn’t print money, the Treasury Department does, but that’s a different story.)

While the monetary supply is a major cause of inflation (And for the last two years our government has absolutely pumped an enormous amount of money into the economy to keep the economy churning during the depression), there is no question that part of the reason we have inflation is that we experienced a problem with bringing enough products to market.  Remember, as the number of hamburgers goes down, the price of each available burger goes up.

As Covid shut down the factories in Asia and cargo ships began backing up in our ports, our supply lines were severely disrupted.  Americans stayed home, stopped purchasing, and saved all those stimulus checks until the pandemic was over.   When the pandemic was lifted, we filled our hands with cash and ran into that room and started bidding up the price of the few hamburgers available.  Bingo!  Inflation!

There is, however, another source of inflation that gets almost no press.  The productivity of the American workforce has suddenly dropped.  While the productivity rate generally rises and falls annually by a small amount every year, for the last two years, the rate has fallen by the largest amount since the end of World War II.  The level of productivity has a direct influence on the rate of inflation since as labor efficiency drops, the cost of production goes up.

The entire reason for the drop in productivity of the American workforce is uncertain, but most likely results from a combination of several factors.  One of the more popular reasons is the phenomenon of “quiet quitting”, in which workers experience so much burnout from being overworked that they simply stop working while still showing up for their paychecks.  Employers, desperate for employees, don’t terminate these employees for fear of not being able to replace them.  While this is a popular topic in newspapers, to what extent this contributes to lower productivity is impossible to calculate.

There is one factor that is directly and demonstrably related to the drop in productivity:  Because of Covid, employers suddenly allowed a large percentage of employees to work from home.  While blue collar workers were declared “indispensable” and continued to show up at work daily, white collar workers turned their spare bedrooms into home offices and spent long dreary hours driving up the stock price of Zoom.  

Employees absolutely loved working remotely and routinely claimed that they were at least as productive at home as they had been at the office—a claim that might very well have been true in some cases.  No longer tied to living within driving distance of their employment, many employees relocated to remote areas, frequently taking advantage of locations with lower taxes.

Large numbers of the upper administration of Enema U, for example, promptly moved out of state and have continued to do the high level of nothing whatsoever that they had been doing before.  Strangely, these administrators—all of them hired from out of state—claim to love New Mexico when they arrive at Harvard on the Rio Grande but seem to leave as fast as possible whenever they can.  Even today, after the pandemic has ended, a whole raft of these academic slurpers are still “working” from out of state.  I doubt any student (and damn few faculty) have noticed their absence.

Today, corporate management of numerous large businesses are increasingly dictating that their employees return to the workplace, which has proven to be a highly unpopular decision with their employees.  Despite the claims of those who really enjoyed working in sweatpants with their pet cats in their laps, working from home was not as productive as working in the office.  Perhaps it is the collaborative spirit, or the ability of employees to bounce ideas off one another, or simply because there are fewer distractions, working from home significantly lowers efficiency, which inflates the price of the goods or services that businesses deliver.

Nor should we be surprised that working from home is less efficient:  Meetings at the office are simply hell.  (At most faculty meetings, I used to pass the time while deciding—in case we were ever stranded on a desert island—who I would kill and eat first.)  Yet, as bad as face-to-face meetings are, any meeting on Zoom is infinitely worse.  

I suspect that, for the next year or two, we will continue to see employee resistance to returning to work at the office, but these efforts are doomed to failure.  Just as levels of productivity fell with employees working remotely, as more employees return to the office, productivity will increase, motivating more companies to require more employees to return to the office.

In the last three years, we have definitely learned that work at a distance—whether it be in education, in relationships, or in business—is not as effective as the traditional methods are.  Even if the technology improves significantly, I doubt it ever will be as effective….And don’t blame it on the cat.

A Sinking Decimal Point Error

It was a beautiful luxury liner and the largest passenger ship ever constructed in Italy.  The SS Principessa Jolanda, named after the daughter of Italy’s monarch, King Victor Emanuel III, slowly inched down the slipway.  Halfway down the rails, the ship began to wobble, hitting the water for the first time at a slight angle.

Instead of righting, the ship heeled to the port, causing the crew to rush into action.  The starboard anchors were dropped and the crew tried desperately to right the vessel.  Within ten minutes, the vessel’s list to port was so bad that water began entering the ship, causing the Principessa to capsize, sinking below the surface of the water within an hour of her launch.

The exact cause of the sinking was never officially determined but was thought to be a combination of a poor launch and the ship’s having too high a center of gravity because her coal bunkers were empty.  A sister ship, the SS Principessa Mafalda, named after Jolanda’s younger sister, was later successfully launched with more ballast and with most of her superstructure left unfinished.

I recently finished a class in economic statistics in which I had to do real math for the first time in decades.  Whether it was because it’s been decades since I did any real math, or because age-related brain rot has set in, I found myself frequently making stupid little math errors on a regular basis.  I would drop a decimal point or suddenly decide that two plus two was occasionally five…. Well, for whatever reason, math is harder than it used to be.  After a little research, however, I take some solace in the fact that such errors are more common than I had thought.  (And they are usually made by people who’ve taken far more math courses than I have!)

Mexico City just completely revamped its metro rail system, but when they tried to run the expensive new trains on the existing track, they discovered that the wheelbase of the new cars was too long to take the curves built into the trail line.  The entire new rolling stock of both engines and cars was simply too long to be used—a total loss.  

In 1998, NASA spent $125 million dollars to launch the Mars Climate Observer which, after 10 months, traveled 461 million miles only to crash onto the surface of the red planet.  It seemed that half the engineers who designed her used the metric system while the other half did not.  It was the first time a spacecraft was lost in translation.  

In 2014, France spent $20 billion on brand new commuter trains that proved to be just a few inches too wide to enter the train stations.  So far, it has only cost about $70 million to shave a few inches off the sides of all the train stations' entrances.

No matter how sophisticated the plans and no matter how many times those plans are checked and rechecked, catastrophic engineering failures continue to occur because of the simplest math errors.  I think the best example is the “new” Spanish submarine design.  

Starting back in the 1990’s, Spain decided to upgrade its fleet of submarines.  For technical advice, the Spaniards turned to that country well known for its naval excellence:  France.  (Well, it could have been worse—they could have turned to a landlocked country like Uganda.  On the other hand, Uganda hasn’t lost as many naval battles as France has.)

France had come up with an improved design for two of its existing classes of submarines:  the S-60 and S-70 classes, which were two reliable lines of diesel-electric submarines.  The new class, the S-80 would be substantially larger and able to remain on patrol longer.  In the end, while France decided not to build the S-80 subs, Spain went ahead and ordered a total of four subs with the final design and construction all to be done in Spain.  Each sub would cost $680 million dollars.

The hope was that the new subs would be the start of a new and improved Spanish Navy, restoring national pride in the country’s navy.  Spain had once boasted of the strongest navy in the world, but that was before the country lost the Great Armada in 1588.  Since then, there had been few high points in Spanish naval history.  (There was, for example, that day in September 1898, when the United States easily sank the entire Spanish navy.)

In 2013, shortly before the launch of the first sub, someone doublechecked the math on the ship’s design and discovered that someone else had misplaced a decimal point so that the new boat was going to be 100 tons too heavy to float!  While an extra 100 tons on a 2000-ton ship doesn’t sound like much, it was more than enough to keep the ships from floating.  All subs are designed to go underwater but the people aboard them really like to have confidence they can also occasionally surface…and this one couldn’t.  

Finally, Spain did what it should have done all along and turned to the real experts for help.  The Electric Boat Company—the people who make American subs—was called in to evaluate the design and to suggest a possible solution.  If the subs were lengthened, it would add buoyancy.  The recommendation was to add 33 feet in the middle of the sub, for a measly $9 million a foot.  Each.  And it would require about a decade to accomplish the design changes to the four subs.  This new, new design would bring the sub up to 81 meters length and 3000 tons in weight.  The computer-generated image at left is what the subs would look like before the extension was added.  If you want to know what the finished sub would look like, it’s basically the same but 11% longer.

The extensions were finally finished in 2018 and Spain proudly took possession of the Isaac Peral.  The design was now 30 years out of date and the final price tag for each boat had ballooned to $1.2 billion—roughly twice the estimated original cost—but the first boat off the line was finally put to sea in 2021.  Happily, the navy discovered the sub could resurface when needed.  

Unfortunately, it was at this point that the Spanish discovered a new problem:  The boats were too long to tie up at their docks at the submarine base in Cartagena, a mistake that inexplicably took the Spanish naval authorities five years to notice.

Today, the harbor is being dredged and the docks extended to accommodate what the Spanish are now calling the “S-80 Plus” submarines.  The project is expected to be finished by 2027 at an undisclosed price.

According to the Spanish authorities, “There had been some deficiencies in the program.”

Yes, Virginia,There is a Historical Precedent

As I write this week’s blog entry, the House of Representatives is engaged in yet another attempt to elect a Speaker of the House.  After years of denouncing the Democratic Party’s majority rule, the difficulty of even selecting a Speaker seriously tests their claim of better leadership.

To be fair, of the twenty holdouts, a few seem to be more interested in press coverage than in making any meaningful changes.  It is probably safer to French kiss a honey badger than to stand between the press cameras and Lauren Boebert as she denounces the leadership of Kevin McCarthy.  She never mentions that she was only narrowly reelected last November and would have been unsuccessful save for the $2 million dollars of campaign funds that McCarthy gave her.

The rest of those holdouts do have a couple of valid points.  In the last couple of decades, regardless of which party held the majority, Congress has been run poorly, with few issues being debated on the floor, but through closed door party negotiations that are then lumped into giant omnibus bills that are usually passed at the last minute without anyone ever reading the thousands of pages that make up the bill.  In the last half of the 20th Century, the power of the Speaker has increased dramatically, effectively giving the Speaker enormous power to shape legislation.  This is why the majority of bills that do pass do so with “unanimous consent.”

Still, the long-drawn-out process of failed ballot after failed ballot gives the appearance of the Republican Party members shooting themselves in the foot.  Reload and repeat.  Someone wrote to ask if there was a historical precedent.  Since there is a historical precedent for everything, I give you the Battle of Karánsebes.

In 1788, Austria was a year into the four-year war with the Ottoman Empire.  This is not unusual, since for most of the latter half of the 18th Century, most of Europe was at war with damn near everybody else over practically nothing.  Since Austria was still being led by the hapless Hapsburg Royal Family, it would be easier to list the times that Austria was not at war with somebody.

The Austrian Army, made up of roughly 100,000 men drawn from Austria, the Czech Republic, Germany, France, Croatia, Serbia, and Poland, suffered from the units lacking a shared language, from raging epidemics, and from being personally led by Emperor Joseph II.  Joseph was yet another Hapsburg absolutist, and like his sister, Marie Antoinette, was certainly no one to lose your head over.

As the army blundered around in present-day Romania in search of the Ottoman forces that had invaded Austrian territory, Joseph sent the Hussars out to scout the nearby territory.   For those of you who didn’t take my military history classes, Hussars were light cavalry whose uniforms looked like they had been issued by an Italian opera company.  They were only lightly armed because their usual job was to act as scouts.

On September 21, 1788, the Hussars rode out across a river in search of the Turks, but failing that, they successfully managed to find a band of Gypsies who gladly sold them a large quantity of schnapps.  There was enough booze for the Hussars, but not nearly enough to share with the rest of the army, so the Hussars dismounted and began to reconnoiter the bottom of the liquor bottles.

Concerned about the prolonged absence of his scouts, Emperor Joseph sent a contingent of infantry across the river to locate the Hussars.  By the time the infantry got across the river, it wasn’t hard to locate the party, as the Hussars were loudly drunk and stubbornly refused to share their schnapps with the thirsty infantry.  Arguments turned into shouting, then brawling and then it got serious.  The Hussars thought they were better than the infantry, who in turn generally thought the cavalry were just better dressed clowns who left the real fighting to the infantry.  Since both groups were armed and alcohol was involved….well, we will never know who fired the first shot, but before long, both groups were shooting at each other.

It was definitely someone in the infantry who had the idea of scaring off the Hussars by yelling “Turks!  Turks!”  

The Hussars did exactly what was expected:  they mounted their horses and fled.  So did the majority of the infantry, not knowing it was a ruse.  Both groups continued firing at each other, at the enemy that wasn’t there, and at anything else that moved.  The retreat turned into a stampede that was headed directly back towards the camp.

Unfortunately, not every unit in camp knew that the Hussars (and then the infantry) had been sent across the river, but they certainly knew that a large group of screaming soldiers was coming across the river, directly toward their position, and that those men were firing their guns while yelling about the Turks.  Naturally, those units in camp, believed they were being attacked and began to defend themselves.  An artillery officer ordered his cannons to begin firing to defend the camp.

One alert officer, recognizing the distinctive uniforms of the Hussars, realized that the men attempting to cross the river were part of the Austrian Army, and began yelling “Halt! Halt!”  Unfortunately, most of the men around him did not speak German and thought they heard someone yelling “Allah!”  More unfortunately, the Muslim troops of the Ottoman Army were widely known to shout “Allah!” during battle as a cry to their God to protect them.

As the rest of the men in camp woke up, all they could hear was screaming, cannons booming, and guns firing.  Worse, the sounds were obviously getting closer.  Within minutes, whole regiments were firing wildly at other regiments who promptly returned fire.  In the smoke and confusion, officers got separated from their units, finding themselves surrounded by troops that spoke a different language.  Emperor Joseph, believing that his army was under attack by Ottoman forces, ordered a retreat and then promptly got separated from his protection detail.  Two days later, Joseph and one, lone aide wandered into the Austrian Army camp.

How many men were lost in the battle is still being debated, but the most often quoted account says that 10,000 men were killed.  The Austrians had fled so rapidly—from themselves—that they left behind their wounded, a lot of their cannons, and the supply wagons containing the army payroll.  

Two days later, the Ottoman Army arrived, easily securing the area around Karánsebes.  They had won a battle they hadn’t even fought.  

The Republicans should remember that it is possible to lose a battle because of friendly fire.  

Artistic Destruction

The Georgia Guidestones are no more.  The quarter-of-a-million-pound granite artwork, sometimes referred to as the American Stonehenge, was so badly damaged by a vandal’s bomb last July that the government toppled what was left of the megalith this week.  

The nineteen-foot-tall granite tablets were inscribed with a message to the future in ten languages, sort of a modern-day Rosetta Stone.  While exactly who detonated the bomb is unknown, the act was most likely motivated by the losing gubernatorial campaign of an idiot who ran on the platform of leaving up Confederate monuments while tearing down those that were “obviously used for satanic rituals”.  Part of the message inscribed on stone was: “Protect people and nations with fair laws and just courts….Avoid petty laws and useless officials.”

No doubt it was the attack on useless officials that upset the would-be politician.

In June, a young man broke into the Dallas Museum of Art and smashed three 2500-year-old Greek artifacts valued at more than $5 million.  When he was finished wielding his hammer on the artifacts, he called the local police and calmly announced, “Hey, I’m in the Dallas Museum of Art.”

At left is one of the artifacts the vandal smashed, a 6th century B.C. Greek amphora.  Think of the history that has passed since this vessel was created.  It survived the Peloponnesian Wars, the Age of Alexander the Great, the rise and fall of the Roman Empire and… 

Never mind.  It was destroyed by a 21-year-old moron who spent a total of 12 minutes in the museum after using his hammer to break through the glass of the museum’s doors.  When questioned by the police, he explained that he did it because he was “mad at my girl.”

In October, an American tourist at the Chiaramonti Museum in Rome calmly asked for an audience with the Pope.  When told that was impossible, the man became irate and knocked a 2,000-year-old bust off a pedestal, smashing the piece on the marble floor.  When the 50-year-old tourist saw guards rushing to apprehend him, he knocked a second statue to the floor.

Added to these, consider the other recent attacks on our shared cultural heritage:

• The ongoing debate about whether or not street art by Banksy should be left in situ or removed so the work can be seen in a museum now must deal with a new trend—the graffiti by Banksy is now almost immediately a target by other graffiti artists hoping to get their work in the news.  
• Museums of contemporary art and costumes are horrified by Kim Kardashian’s recent appropriation of a dress made famous by Marilyn Monroe to wear at the Met Gala.  (My distaste of actually typing the word ‘Kardashian’ is mildly assuaged by the fact that spell check has never heard of her.  Wish I hadn’t.)
• An art exhibit at the Musée Picasso in Paris consisting of a blue coat with pockets filled with postcards depicting the works of Picasso was stolen by an elderly woman who had a tailor alter the coat to better fit her.  She was a frequent patron of the museum and did not mistake it for a simple garment.
• 
  Two ‘boisterous’ children smashed a $64,000 glass sculpture of the Disneyland castle on exhibit at the Shanghai Museum of Glass.  The parents’ claim the event was an accident is belied by security camera footage of the parents using their cellphones to record the children smashing the sculpture.
• The historic Spanish steps in Rome were damaged when a Saudi tourist tried to drive his Maserati down the steps, crashing into a wall and breaking off a piece of the travertine marble.  Two weeks later, two American tourists attempted to ride motorized scooters down the steps.  Technically, one of the scooters made it to the bottom, but it was driverless.
• Vandals in the Koonalda Cave in Southern Australia have destroyed cave art that dates back more than 22,000 years.  The authorities are still searching for the vandals.

It is no accident that these attacks on artwork are escalating, since in the last year, public art has been a frequent target of protestors trying to make international news.  The protestors-turned-vandals are usually trying to make some form of statement about the environment, but this in no way justifies the attacks on priceless art.  Not only does this form of protest do nothing for the cause the protestors claim to care about, but it cheapens the artwork targeted in the minds of the public.  In the worst case scenario in which the artwork is destroyed, the vandals have robbed the world of a piece of its history and its heritage.

This year alone, protestors have glued themselves to four different paintings in England to protest the use of petroleum.  The irony that the glue they used is a petroleum product evidently escaped them.  In addition, more than two dozen famous paintings have been attacked, including works by Picasso, Vermeer, and Klimt.  Buckets of mashed potatoes were thrown at Monet’s Haystacks.  Pea soup was thrown at Van Gogh’s The Sower and tomato soup was smeared across his Vase with Fifteen Sunflowers.  A man disguised as a wheelchair bound woman smuggled a cake into the Louvre so he could smear it across the Mona Lisa, though I forget what unrelated cause he was supposedly protesting.  Bedwetting by bald cross-dressers?

We already lose too much art through non-preventable causes like wars, natural disasters, and the inevitable wear and tear of time.  There is nothing we can do about the art that went down with the Titanic.  We tried and failed to protect all the treasures stolen during World War II.  Museums flood and Notre Dame burns and we all suffer.  These kinds of losses that we can’t stop are bad enough without our having to worry about idiotic vandals.

Many paintings have recently been protected from vandals by thick unbreakable glass—so far, anyway.  But such protests always escalate—otherwise they become mundane and fail to garner sufficient Twitter clicks and Facebook ‘likes’.  So, the “protestors” will keep at it, growing ever bolder and using more extreme tactics until, inevitably, we will permanently lose more priceless treasures somewhere.  And these attacks will continue to trivialize the value of such works in the minds of the public.  

The only way to stop such vandalism is to vigorously prosecute the vandals.  Unfortunately, none of the events listed above (with the exception of the Dallas museum incident, which has yet to come to trial) has resulted in more than small fines, partial restitution, or community service.  

Art theft is a white-collar crime and thus it gets fairly lenient treatment.  If you are convicted of stealing a million-dollar Picasso, chances are that you will receive a more lenient punishment that the guy who robbed the local convenience store of $300 and a pack of cigarettes.  You will note that a conviction for an attempted bank or convenience store theft carries the same punishment as a successful bank theft.

There is a reason that these protestors throw soup at Mona Lisa and do not stage mock holdups at banks.

If we treated the theft of art the same way we treat the theft of an equivalent amount of cash from a bank, this would help deter art crime.  We should also treat the destruction of art as severely as the theft—in both cases the public has been deprived of the art.  And so it follows that we should treat the attempt to destroy art by vandalism exactly the same as the destruction of art, and prosecute accordingly.

If we did that, it would send a powerful message that we value our cultural heritage and will do whatever is necessary to protect it.

The Newspaper Headline

Like every good Texan, as I grew up, I both knew of and actively participated in the rivalry between Fort Worth (good) and Dallas (evil).   Usually, the rivalry took the form of jokes and the occasional high school football games, but occasionally you heard stories about how both cities competed in attracting new businesses.

The rivalry started almost a century and a half ago, when a lawyer heard that a railroad was about to lay tracks to the then tiny village of Fort Worth.  The lawyer quickly relocated, hoping to prosper as the village grew.  Unfortunately, the railroad changed its mind and decided against laying tracks to the town, so the lawyer moved to Dallas where he wrote an article for the Dallas Daily Herald stating that there was so little activity in his former home that a panther had wandered into the village at noon and had taken a nap in the middle of Main Street.  For weeks, said the lawyer, the chief topic of conversation in Fort Worth was to point at the middle of the thoroughfare and say, “He slept rite thar.”

In the end, Fort Worth had the last laugh, since not only did the railroad eventually come to the town, but the community gleefully adopted the panther as its mascot.  Early in the twentieth century, Amon Carter, the publisher of the Fort Worth Star-Telegram, used the panther as the paper’s logo.  Carter, an enthusiastic booster of his city, supposedly always packed a lunch when business forced him to visit Dallas, so that he wouldn’t have to spend a nickel in that city.  It was Carter who labeled Fort Worth as “Where the West Begins,” a slogan that still appears on the masthead of his paper.  The paper did not print the rest of the phrase, “Dallas, where the East peters out.”

Today, I live in a New Mexico town that has an ongoing rivalry with a city just 40 miles away, just across the border in Texas.  As businesses flee the heavy taxes and extensive regulations of California, they are relocating across almost al of the Southwest.  Almost all southwest states and cities are eagerly competing to bring home new jobs to boost their economies and expand their tax bases.  Unfortunately, New Mexico is not part of the competition.  

Businesses are definitely flocking to cities in Texas.  Every time I drive south across the border, I’m amazed at all the new businesses and warehouses being built along the interstate.  Unfortunately, the new construction dramatically stops at the state line, heading back north, into New Mexico.

Have you seen the satellite photos of night lights in North and South Korea?  South Korea is ablaze in lights, but North Korea is as dark as the grave, with only a dim glow around Pyongyang, the North Korean capital.  Unfortunately, the satellite photo of the New Mexico/Texas border is starting to share some of the same characteristics.  The photo at left shows the two communities separated by the state border.  The long line leading south and north of the brighter city is Interstate 10.  The red arrow points to the point where the interstate reaches the New Mexico border—the point where almost all commercial activity simply stops.

Businesses are highly unlikely to move to New Mexico for some very simple reasons.  This is a closed shop state with very strong labor laws favoring unions, despite the fact that the only large unions in the state are for school teachers and public employees.  California and New Mexico are the only closed shop states in the southwest:  the rest are right-to-work states, and all of those have expanding industrial bases.  It doesn’t seem to be a hard test, but it seems clear that our state is flunking.

New Mexico has relatively high business taxes, extensive anti-business regulations, and a state legislature so unstable that if a lobbyist spent $50 on an advertising campaign, the state would repeal the law of gravity.  These conditions are unlikely to attract new businesses, despite the state’s having an educated workforce, a low cost of living, cheap land, and great access to transportation.  The state also shares with California the dubious distinction of having run off a number of good-sized, well-established businesses.  Some of those formerly New Mexican businesses have relocated just across the border in Texas (and one even took its employees with it—a further loss to the tax base of a state that had no excess tax base to lose).  It is becoming increasingly obvious that the most valuable export from this state is not pecans or green chile: it is our college graduates, who have been educated at state expense and who must leave the state to find good-paying jobs they cannot find here.

All of the above came to mind this week as I read the local newspaper.  While cities across the southwest are competing for new industry, at right is a front page headline from one of the largest cities in New Mexico.   Happily, the city has a new tattoo parlor that must employ two or three people.  Now, all our problems are solved.

Hey!  Did you hear that a coyote wandered out of the desert into town and took a nap on Main Street?  He was rite thar.

The Other Jab

With rapidly ebbing enthusiasm, I watched several politicians making speeches this week.  I am somewhat shocked to learn that our elected officials evidently do not understand the difference between fiscal policy (actions taken by the independent Federal Reserve) and economic policy (actions and policy set by the president, Congress, and regulatory agencies).  Congress can only effect economic policy and seem to have little idea of the effects of such policy.  Perhaps this is why Congress, the White House, and the Federal Reserve have so frequently worked at cross purposes for the last two years.

One of the policies that various politicians emphasized was a provision of the Inflation Reduction Act (the name was obviously chosen by the Federal Bureau of Anti-Aptronyms) that will limit the cost of most insulin and insulin-related drugs to Medicare recipients to a maximum of $35 a month.  

While I certainly sympathize with those who have diabetes and genuinely wish the cost of insulin were much lower, this new act will not accomplish what Congress desires.  The actual result will be:  1.  The cost will be transferred to the taxpayer.  2.  The availability of insulin will decrease.  3.  The measure will not lower inflation but possibly raise it.  4.  The cost of insulin will rise.

Let’s take those points in order.

Instead of Medicare recipients paying the full price of insulin, they will now pay a maximum of $35 a month, with the balance to be paid by Medicare.  The pharmaceutical companies will be paid a “negotiated” price and the burden of payment will just be shifted to taxpayers.  While this may be a laudable goal, inflation is not caused by just consumers spending, but by the total spending going on in the economy, and this includes the government.  Since the recipients of this Medicare benefit will have an increase in their discretionary income, their increased consumption of other goods and services will drive inflation upwards.

Inflation is always caused by too many dollars chasing too few goods.  It doesn’t matter where the dollars come from—if these conditions exist, the result in a free market is always rising prices.

The bill gives Medicare the right to “negotiate prices” with the pharmaceutical companies producing insulin.  Since Medicare will certainly not negotiate higher prices and private insurance companies usually peg their maximum payments to equal those of Medicare, Medicare is essentially setting price controls on the sale of insulin.

Once price controls have been implemented on any product, the availability of that product always diminishes.   All goods are produced up to the marginal cost of production and if that cost is set lower than the market price, the amount of production must decrease.  Any government action that would attempt to coerce manufacturers to produce goods below cost—a clear violation to the 5th Amendment—would simply force the company out of business.  

Government’s putting a price cap on insulin will inevitably lower production, resulting in an inevitable shortage of insulin.  The timing of this new Medicare policy is problematic, as there is already a world-wide shortage of insulin.  The rising middle class in emerging nations increasingly has access to more food and enjoys the luxury of a less active lifestyle, which two conditions together result in an increasing number of people with diabetes.  Already, more than 20% of the people with diabetes worldwide come from China and India and this trend will certainly increase in the future.  Even without price controls, a worldwide shortage in insulin is inevitable.  

Even if the shortage did not exist, the lack of free markets and effective methods of distribution means it is all but impossible for enough insulin to effectively reach the growing number of patients needing the medicine in most of Asia and Africa.   A good case in point would be a recent study in Mozambique, which showed that even when large quantities of insulin were rushed to the country, over 75% of the supply remained in the capital, resulting in sever shortages in the rest of the country.

Shortages of a product, even without increased worldwide competition for the product, will raise the price of the product.  Whether the goods are sold on a black market or sold  in markets without price controls, the average price will go up.  There are good studies of the effects of government-imposed price controls all the way back to the time of Hammurabi and without exception, attempts by governments to dictate prices result in shortages and higher prices.  

What can be done?  There are two possible ways to ease an all but inevitable crisis.  Government regulation—particularly by the American Food and Drug Administration—could ease restrictions on the creation of competing companies manufacturing insulin.  Today, three multinational companies—Novo Nordisk, Eli Lilly and Company, and Sanofi—control 99% of the $21 billion global insulin market in terms of value and 96% in terms of volume.  Throughout history, the most effective way to lower prices while increasing quality has been through increased competition.   Insulin was discovered 97 years ago, so there is no reason why there should be so few pharmaceutical companies producing the medicine.

Unfortunately, the imposition of price controls will make it even harder for new companies to begin profitable production.  The three existing companies producing insulin welcomed the new Medicare regulations since it guaranteed they retained their market share and created massive roadblocks for competition.

The only other possibility of reducing the insulin shortage is through increased medical research, not only for a cure for diabetes, but for a generic version of insulin—something that does not yet exist.  Biosimilar insulins are also available but are not yet effective enough to reduce the need for insulin.  More money is needed for research and innovation, but the traditional source of such funds (private market investing in order to secure future profit) is impeded by government controls on market prices.

Since it is far easier for politicians to simply claim they have solved difficult problems than actually solving them….  Don’t expect to see the number of diabetes deaths worldwide to drop anytime soon.