Sunday, July 29, 2018

Week-end Wrap - July 28, 2018

Week-end Wrap - July 28, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

"...we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy." - Theodore Roosevelt,  An Autobiography, 1913
[Posted by someone on Facebook]

The Missing Profits of Nations
Posted on July 23, 2018 by Thomas T�rsl�v, PhD student, University of Copenhagen and Ministry of Taxation, Denmark, Ludvig Wier, PhD candidate, University of Copenhagen, and Gabriel Zucman, Gabriel Zucman.
[Originally published at VoxEU, via Naked Capitalism]
Between 1985 and 2018, the global average statutory corporate tax rate fell by more than half. This column uses new macroeconomic data to argue that profit shifting is a key driver of this decline. Close to 40% of multinational profits were artificially shifted to tax havens in 2015, and this massive tax avoidance � and the failure to curb it � are in effect leading more and more countries to give up on taxing multinational companies. 
Perhaps the most striking development in tax policy throughout the world over the last few decades has been the decline in corporate income tax rates. Between 1985 and 2018, the global average statutory corporate tax rate fell by more than half, from 49% to 24%.
Why are corporate tax rates falling? The standard explanation is that globalisation makes countries compete harder for productive capital.... 
But is it well founded empirically? Today�s largest multinational companies don�t seem to move much tangible capital to low-tax places � they don�t even have much tangible capital to start with. Instead, they avoid taxes by shifting accounting profits. In 2016 for instance, Google Alphabet made $19.2 billion in revenue in Bermuda, a small island in the Atlantic where it barely employs any worker nor owns any tangible assets, and where the corporate tax rate is zero percent. 
....Overall, we find that close to 40% of multinational profits � defined as profits made by multinational companies outside of the country where their parent is located � are shifted to tax havens in 2015. Our work provides transparent, easy-to-compute metrics for policymakers to track how much profits tax havens attract, how much they gain in tax revenue, and how much other countries lose.... Our findings have implications for economic statistics. They show that headline economic indicators � including GDP, corporate profits, trade balances, and corporate labour and capital shares � are significantly distorted.



How are you going to pay for it? Why Understanding Monetary Theory and Policy Is Critical For the Left
by Tony Wikrent
Excerpts from the June 2018 symposium held by the Next System Project, an initiative of The Democracy Collaborative. The panel was moderated by Gar Alperovitz and included Stephanie Kelton, the key economist on Bernie Sanders� presidential campaign, now professor of public policy and economics at Stony Brook University; Michael Hudson, professor of economics at University of Missouri, Kansas City; Pavlina Tcherneva, an associate professor and chair of the department of economics at Bard College and a research associate at the Levy Economics Institute; and Ra�l Carrillo, staff attorney at the New Economy Project and a director of the Modern Money Network.

There is a YouTube video plus a full transcript at the NSP's website at Money Matters! Why Monetary Theory and Policy Is a Critical Terrain For the Left. The video is also on Michael Hudson's website.


....How do you pay for a progressive agenda if these are the constraints because this is the current narrative? This means that you have to fight two battles. You have to fight for the agenda that you�re fighting for, and you have to sell policies on their own merits, and you simultaneously have to wage war on another front, which is you have to fight to raise the revenue. You have to get people to vote for the tax increase, for the closing of the loopholes of whatever it is that�s giving you the additional revenue. You�re waging two battles when you do this... It actually means that you are in a very real sense dependent upon the rich because you can�t feed a hungry kid, you can�t fix crumbling infrastructure, you can�t provide health care for all, unless and until you can claw some cash away from the people who have it. You need their money. It makes you dependent upon the wealthy. 
....I think progressives should ask themselves, �What is the purpose of tax?� If your instinct, if your impulse is to say to pay for the stuff we want, my suggestion is you�re doing it wrong. 
In the 1940s, the New York Federal Reserve Bank was headed by a guy named Beardsley Ruml. He wrote this really important piece in 1946 called �Taxation for Revenue is Obsolete�� What�s he saying? I don�t know that I need to read the whole thing, but he says basically the need for the government to raise taxes in order to remain solvent and run its affairs is completely yesterday. We don�t do that anymore. Why? Because we have a central bank and because we went off the gold standard. The fact that we changed the monetary system in this fundamental way opens up space for us to do stuff we couldn�t do before when we had to find the money. 
You�re trapped in a gold standard framework when you�re operating in this frame of mind that money is this finite thing that exists somewhere, it�s physical and you�ve got to find it, and you�ve got to go get it in order to spend it. Ruml says, no, no, no, that�s not how it works in the modern era � by the way, modern in the 1940s, and we still haven�t caught up with this reality. 


The GOP Tax Scam Ain't Workin'
July 24, 2018 [Down With Tyranny]
Yesterday Bloomberg pointed out in an editorial that it hasn't done anything for workers, just for the very rich. Instead of rising, wages have actually dropped. Noah Smith, who teaches finance at Stony Brook University: "Real average hourly compensation actually fell in the first quarter after the tax reform was passed... The tax-cut windfall being used to finance the capital expenditure that the economy needs still remains below the high set back in 2015.

How Is This Shit Legal?: A reporter vents about vampire capitalism destroying a free press
[The Concourse, via Naked Capitalism 7-24-18]. See also New York Daily News to slash 50% of its newsroom CNN
This past spring, Michael Ferro resigned as chairman of publicly traded media-looting hell-company Tronc, Inc., just ahead of the publication of sexual harassment allegations against him. As a parting gift, Tronc paid him $15 million, voluntarily bundling up the total value of a three-year consulting contract into one lump payment expensed against the company�s earnings and putting itself $14.8 million in the red for the first quarter. Today, Tronc gutted the New York Daily News, laying off at least half of its editorial staff to cut costs. In a society not crippled and driven completely insane by capitalism, motherfuckers would go to prison for this.

When people talk pejoratively about �class warfare,� they almost never are referring to things like the above sequence of events. But what happened to the Daily News at the hands of Tronc is class fucking warfare, a massive redistribution of wealth from the paper�s working people to a disgusting handsy shitbag multimillionaire, in a decision made far above those working people�s heads by a small handful of executive- and investor-class vampires. The journalists who lost their livelihoods today in effect had their salaries and benefits re-routed to Michael Ferro�s bank accounts. Against their wills, they were made to pay him for being a fucking pig.


Versions of this are happening all across the media industry: Ownership parasites writing checks to themselves and each other that must be cashed out of the livelihoods of real people with no say in the matter. Deadspin�s parent company, Univision, recently bought out dozens of people across our network of sister sites�originally they�d intended layoffs, before negotiating with our union�not because we�re doing unprofitable work, but simply as a means of passing along the outrageous debt the company�s owners took on when they purchased Gizmodo Media Group in the first place....
It�s legal to do this. It�s legal, if you�re rich enough, or carefully enough obscured behind the legal fiction of a hedge fund or corporation, to borrow vast sums of money, purchase a company with it, and then simply pass that debt along to the people who do the company�s work and make its products, by stripping their jobs so you can redirect their salaries toward debt payment. It�s legal to decide, freely, that you will pay a disgraced former executive tens of millions of dollars all at once rather than over a period of years�or rather than going to court to argue you shouldn�t have to pay a guy $15 million for not being able to keep his fucking hands to himself!�and then recover some or all of the cost by just straight-up taking people�s livelihoods away from them. It�s legal for the parasites who buy an ownership stake in your company to decide they will appropriate your livelihood for themselves; it�s legal for them to say that your wages and health care must pay their debts for them. It�s legal for them to trade your employment for their enrichment; it�s legal to purchase a company for the sole purpose of liquidating it, laying off all its workers, and keeping the money for yourself.
In absolutely any moral sense these things are pure theft, but they�re all legal, because in America, despite all this society�s supposed hatred of �class warfare,� it�s legal for the rich to prey upon the rest of us. In America, a common person might go to jail for writing a bad check, but a billionaire vampire can destroy people�s careers and strip their healthcare from them and just straight-up hand that money over to one of his rich pals and nobody can even so much as write either of them a fucking ticket for it.
Rants such as this appeared in the 1980s and 1990s, but they were by steel workers, machinists, assembly line workers, and other working class people whose companies were being bought out and looted by corporate raiders such as Michael Milkin, Nelson Peltz, T. Boone Pickens, and Kohlberg Kravis and Roberts. Philadelphia Inquirer reporters Donald L. Barlett and James B. Steele
wrote an extensive series of articles detailing how corporate raiders and Wall Street were conniving to rip apart industrial and other companies that had be run profitably for decades, but which Wall Street now found too staid and plodding, with too much "value locked up." The Inquirer received so many requests for reprints of the Barlett and Steele series, that it was published as a book in 1991, America: What Went Wrong? The Table of Contents, extended excerpts, and many graphics, are available online here.

Perhaps, if more editors and reporters had followed down the dark paths being explored by Barlett and Steele, instead of being enthralled to Wall Street MOUs (masters of the universe)....


The Middle Precariat: The Downwardly Mobile Middle Class
By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website [via Naked Capitalism 7-26-18].
A review of journalist Alissa Quart 's new book �Squeezed: Why Our Families Can�t Afford America.�
Over and over, the people Quart interviews tend to blame themselves for their situation�if only they�d chosen a different career, lived in another city, maybe things wouldn�t have turned out this way. Sometimes they point the finger at robots and automation, though they arguably have much more to fearfrom the wealthy humans who own the robots. 
But some are waking up to the fact it is the wealthy and their purchased politicians who have systematically and deliberately stripped them of power. Deprivations like paltry employee rights, inadequate childcare, ridiculously expensive health care, and non-existent retirement security didn�t just happen. Abstract words like deregulation and globalization become concrete: somebody actually did this to you by promoting policies that leave you high and dry.
The 9.9 Percent Is the New American Aristocracy
by Matthew Stewart, June 2018 Issue [The Atlantic]

Wall Street�s Derivatives Nightmare: New York Times Does a Shallow Dive
By Pam Martens and Russ Martens: July 24, 2018 [Wall Street on Parade]
The New York Times published a 1300-word shallow dive into the byzantine, globally-interconnected world of financial derivatives in its print edition yesterday.... What frightened the Times into this foray into the dark web of financial derivatives held by the biggest Wall Street banks was a frightening, 111-page deep dive into the subject by Michael Greenberger, a law professor at the University of Maryland�s Carey School of Law. Greenberger knows a thing or two about derivatives, having previously served from 1997 to 1999 as the Director of the Division of Trading and Markets at the Commodity Futures Trading Commission (CFTC) under its head Brooksley Born.... 
Greenberger previously gave a no-holds barred interview about his time at the CFTC to the PBS program Frontline that aired in 2009. (See his interview transcript here and the program video here.) He explains all the warnings that Congress and the regulators had that over-the-counter derivatives were a danger to financial stability and needed to be regulated. He talks about Orange County, California going bankrupt in the early 90s after being �taken to the cleaners� by a Merrill Lynch derivatives salesman. He explains how Bankers Trust ripped off Procter & Gamble and Gibson Greeting Cards with complex derivatives. And he talks about the unprecedented collapse of the hedge fund, Long Term Capital Management (LTCM), after leveraging a $4.4 billion portfolio of derivatives by a factor of 125. The LTCM collapse created so much panic on Wall Street that the big Wall Street banks had to effectively buy up LTCM�s derivatives mess. 
But none of this was enough to stop Congress from allowing the over-the-counter derivatives market to remain de-regulated until it blew up Wall Street in 2008. In the Dodd-Frank financial reform legislation of 2010, the CFTC was supposed to assume oversight of this market. But Wall Street has carved out so many loopholes since that time that the derivatives punch bowl is still flowing freely on Wall Street.
In his new report, Greenberger lucidly lays out the case that loose regulation and unchecked derivatives� concentration have the potential to create another �economic Armageddon.� He concludes his report as follows: 
By their own design, large U.S. bank holding company swaps [derivatives] dealers and their representatives have crafted their own massive loopholes from Dodd-Frank swaps regulations, which they can exercise at their own will. By arranging, negotiating and executing swaps in the U.S. with U.S. personnel and then �assigning� them to their �foreign� newly �deguaranteed� subsidiaries, these swaps dealers have the best of both worlds: swaps execution in the U.S. under the parent bank holding companies� direct control, but the ability to move the swaps abroad out from under Dodd-Frank. As history has demonstrated all too well, unregulated swaps dealing almost always ultimately leads to extreme economic suffering and then too often to systemic breaks in the world economy, thereby putting U.S. taxpayers, who suffer all the economic distress that recessions bring, in the position of once again being the lender of last resort to these huge U.S. institutions�.�

CEO of German industrial giant Siemens warns one third of world's jobs will be eliminated in coming decade
by Joe Kaeser [The Guardian, July 17, 2018 (John Claydon)]

Billionaire Ray Dalio: A.I. is widening the wealth gap, �national emergency should be declared�
by Catherine Clifford, July 6, 2018 [CNBC, (John Claydon)]
Billionaire hedge fund founder Ray Dalio says artificial intelligence and automation are improving productivity but also causing such a dramatic wealth gap that �a national emergency should be declared." The co-chief investment officer and co-chairman of Bridgewater Associates shared his thoughts in a Facebook post on Thursday.
Obama pushes for universal basic income
The Week, July 17, 2018 (John Claydon)
In his first major speech since leaving office, former President Barack Obama endorsed the idea of providing a universal basic income. 
Speaking at the Nelson Mandela Annual Lecture in South Africa on Tuesday, Obama raised the notion of guaranteed income as a way to reduce what he called "yawning disparities" in wealth, education, and security across different socioeconomic groups.

Amazon�s facial recognition matched 28 members of Congress to criminal mugshots 
by Russell Brandom [The Verge, via Naked Capitalism, July 27, 2018]
John C was skeptical of the number, as was Kevin W: �Software still a failure as it only identified 28 members of Congress as being criminals which is a little over 5% � way too low a figure.�

The World Economy Runs on GPS. It Needs a Backup Plan 
by Paul Tullis [Bloomberg, via Naked Capitalism, July 27, 2018]
GPS isn�t just for maps. It�s also a kind of vast, spaceborne clock. Computers all over Earth use it to determine what time it is, down to billionths of a second. When there�s the slightest disagreement among those computers, things fall apart. 
Microsemi�s timing receivers were frantically issuing error messages because of just such a discrepancy. �In normal operation, these things don�t generate alarms for years,� Buckner says. �So when one goes off a lot of times, people don�t know what to do.� Over the next 11 hours, cellphone towers lost their connections, U.S. police and fire stations reported communications errors, BBC radio signals were interrupted, and the telescope that tracks asteroids in Earth�s orbit went offline.
The root cause was a bug in the GPS network. When the U.S. Air Force, which operates the 31 satellites, decommissioned an older one and zeroed out its database values, it accidentally introduced tiny errors into the database, skewing the numbers. By the time Buckner�s inbox started blowing up, several satellites were transmitting bad timing data, running slow by 13.7 millionths of a second.

U.S. �most dangerous� place to give birth in developed world
by Alison Young [USA Today, via Naked Capitalism, July 27, 2018]

How European Workers Coordinated This Month�s Massive Amazon Strike�And What Comes Next 
by Rebecca Burns [In These Times, via Naked Capitalism, July 28, 2018]
....Amazon�s expansion into Eastern Europe threatened to undercut the effectiveness of strikes being waged by German workers. So in 2015, rank-and-file activists Germany and Poland held the first of what became a series of cross-border meetings of Amazon workers....
Disneyland Resort workers approve contract that raises the minimum hourly wage to $15 by next year 
by Hugo Martin [Los Angeles Times, via Naked Capitalism, July 28, 2018]
Unions representing nearly 10,000 workers at the Disneyland Resort ended a months-long labor dispute by voting overwhelmingly Thursday in favor of a three-year contract that raises hourly wages by as much as 20% immediately and an additional 13% in January. The employees � including candy makers, custodians, retail workers, attraction operators and others � voted nearly 75% in favor of an offer that raises the minimum hourly rate of $11 to $13.25 immediately and to $15 starting in January, three years before California�s minimum wage is scheduled to reach that level.

Can liberals please work out how to win back the working class? 
by Thomas Frank, [The Guardian, via Naked Capitalism, July 28, 2018]
What came to fascinate me was the paradox of the thing. Republicans had successfully inverted their historical brand-image as the party of the highborn, remaking themselves as plain-talking pals of the forgotten people who had so spurned them during the Great Depression. Republicanism�s payload, however, was the same as it had been in 1932. And just look at what conservatism proceeded to do to those average people once they welcomed it into their lives. 
But understanding the perversity of rightwing populism only brought me to another mystery: the continuing failure of liberals to defeat this thing, even as its freakishness and destructiveness became apparent to everyone. My brain twirls to think that rightwing populism is still running strong in 2018 � that it�s even worse now than it was in 1988 � that the invective and the journalism and the TV shows and all the mournful books about the decline of the middle class have amounted, basically, to nothing. 
We had the perfect opportunity to reverse course in 2008, after a deregulatory catastrophe sent the billionaires shrieking for handouts and ruined middle America as collateral damage. That was the perfect moment for liberals to reclaim their Rooseveltian heritage by governing forcefully on behalf of ordinary people, by warring against over-powerful corporations, by demonstrating the power of the state to build a just and humane society. But they didn�t do it.

2020 Democrats Band Together to Call for Puerto Rico Debt Cancellation
[The Intercept , via Naked Capitalism 7-26-18]


Erasing Flint�s Water Crisis: Or How to Lie With Statistics
[Counterpunch , via Naked Capitalism 7-26-18]


Backlash Against �War on Cash� Reaches Washington and China
[Wolf Street, via Naked Capitalism 7-23-18]
In Washington D.C., city councilors have introduced a new bill that would make it illegal for restaurants and retailers not to accept cash or charge a different price to customers depending on the type of payment they use. The bill is in response to efforts by retailers in the city and around the country � like the salad chain Sweetgreen � to go 100% cashless.... as discriminatory against the roughly one-quarter of people in the U.S. who would have trouble using a card or some other electronic means of payment, not to mention those who would just prefer to use cash.... the People�s Bank of China (PBOC), which last Friday announced that all businesses that are not e-commerce must resume accepting cash by mid August or risk being investigated.

Did YOUR Congressmember Join The New Medicare For All Caucus?
July 21, 2018 [Down With Tyranny]
There are no Congressmembers from North Carolina. This is just pathetic. David Price represents the Congressional District that includes Chapel Hill and Durham, which is one of the safest Democratic Districts in the country. He can take a much more progressive position on issues, if he wanted to.


�5 Questions: Sullenberger on applying lessons of airline safety to health-care practices�
[Stanford Medicine Center, via Naked Capitalism 7-23-18].
�As we know from the Institute of Medicine reports and others, medical errors and health-care-associated conditions lead to 200,000 preventable deaths per year in this country alone. That�s the equivalent of 20 large jet airliners crashing every week with no survivors. If that were to happen in aviation, there would be a nationwide ground stop, a presidential commission, congressional hearings. The National Transportation Safety Board would investigate, search out root causes. No one would fly until we�d solved the fundamental issues.�

�The Farm Group that�s Part of Rural America�s Crisis�
[Civil Eats, via Naked Capitalism 7-23-18].
�...what we eat is a political problem. A recent landmark article in the journal Lancet identified structural changes to the farm bill in the 1970s as the culprit of the obesity crisis. At that time, the Secretary of Agriculture Earl Butz replaced the New Deal agricultural policies that sought to manage supply and protect farmers from the big agribusiness companies with a system with one that forced farmers to get big or get out, and to plant commodity crops�corn, soy, wheat�from fencerow to fencerow. Butz� mantra was simple: volume, volume, and more volume. Monopolies thrive under this system, at the expense of our health and environment. Grocery stores now teem with a cornucopia of different products, but a few firms with dominant market positions manufacture the vast majority of the supermarket items, as highlighted in a 2013 report from Food and Water Watch. This focus on volume�in farming as well as in food production�has led to a seemingly endless availability of cheap carbs and highly processed sugar- and salt-laden convenience foods, at the expense of more nutritious options.
The same companies that make these foods also tend to own the weight-loss products designed to solve the problems caused by those foods


The mega-machines helping China link the world,
by Tom Calver, July 201, 2018 [BBC, via Naked Capitalism 7-23-18]


A very brief look at some of the massive construction equipment China has developed to build the railways, roads, and ports of the New Silk Road, For example, the SLJ900 "The Iron Monster", built by 6th Engineering Co. Ltd. of China, is 92 meters (300 feet) in length and has 64 wheels. It is designed to put in place entire pre-fabricated bridge sections by rolling forward over the bridge section it has just laid to place another section.




This is how China is working towards its goal of building 30,000 kilometers of high-speed rail by 2020. While USA conservatives and libertarians insist the government leave all such projects to the workings of the free market.

North Carolina: Groundbreaking held for Charlotte Gateway Station
[Railway Age]
The planned work will include building 2,000 feet of rail track, signals, five new bridges and a rail platform. Phase 1, partially funded through a $30 million Transportation Investment Generating Economic Recovery (TIGER) grant, and state and local monies. Full Article

Japan heatwave declared natural disaster as death toll mounts 
[BBC, via Naked Capitalism 7-24-18]

Greece wildfires: At least 74 dead as blaze 'struck like flamethrower'
[BBC, via Naked Capitalism 7-25-18]
BBC photo of people attempting to escape the wildfires near the Greek seaside village of Mati.


Hidden Gem for Big Oil in Carbon Tax Plan: Ending Climate Liability Suits
By Karen Savage, July 17, 2018 [Climate Liability News]
Oil and gas companies could be off the hook for climate change-related damages if a new carbon tax proposal makes its way through Congress. 
The proposal is being spearheaded by Americans for Carbon Dividends, an industry-backed organization whose mission is to build support for the Baker-Shultz Carbon Dividends Plan, which proposes taxing carbon emitters and returning the proceeds to the American public. It also includes a waiver of the right to sue fossil fuel companies for climate change impacts and suggests rolling back most Environmental Protection Agency regulations on greenhouse gases.
Trump Nominee Is Mastermind of Anti-Union Legal Campaign
By Noam Scheiber, July 18, 2018 [New York Times]
A conservative lawyer chosen to head a federal agency has spent months bringing cases that could bankrupt public-employee unions in several states. Jonathan F. Mitchell was a Supreme Court clerk to Justice Antonin Scalia; worked at the Justice Department under President George W. Bush; taught at several law schools, including Stanford; and spent more than four years as the solicitor general of Texas. 
After the 2016 election, he served as a volunteer attorney on the Trump transition team, where he helped review future executive orders. In September, the president nominated him to head the Administrative Conference of the United States, a small federal agency that advises the government on improving its inner workings.  Mr. Mitchell appears to be a driving force behind the anti-union litigation, suggesting a well-coordinated effort.

The Anti-Union Game Plan
July 02, 2018 / Labor Notes
Don�t get the idea that Mark Janus, a child support specialist in Illinois, took his case all the way to the Supreme Court by himself. His lawyers are paid for by the National Right to Work Legal Defense Foundation and the Liberty Justice Center, the legal arm of a right-wing think tank. 
These groups get their money from a whole slew of foundations dedicated to bankrolling anti-worker lawsuits and political candidates. One you might have heard of is the Walton Family Foundation (that�s the Walmart family). 
There�s no doubt that the employer class has its act together. Since the Business Roundtable formed in 1972, the think tanks and lobbying groups advancing the employer agenda have proliferated. 
Here�s one name to learn: the State Policy Network (SPN). It�s a web of 66 corporate-financed �free-market think tanks� spread over all 50 states, financed by corporations and billionaires. And it has a nationally coordinated plan to �defund and defang� the labor movement. 
This anti-union plan includes four primary tactics, each designed to whittle away union support:
1. RIGHT TO WORK
2. OPT-OUT CAMPAIGNS
3. RECERTIFICATION CAMPAIGNS
4. ENDING EXCLUSIVE REPRESENTATION

How Corporations Plan To Use Janus To Turn Workers Against Their Own Unions
by Chris Brooks, July 2, 2018 [In These Times, via Labor Notes]

Near unanimous vote to strike by Fiat Chrysler workers in Kokomo, Indiana
By Marcus Day, 24 July 2018 [World Socialist Web Site, via Naked Capitalism 7-25-18]
Autoworkers at Fiat Chrysler�s (FCA) transmission plants in the Kokomo, Indiana, area overwhelmingly approved strike action in votes Thursday and Friday last week. Workers are seeking to fight back against the deterioration of working conditions, in particular the atrocious treatment of temporary part-time (TPT) workers, which has been enabled by decades of betrayals by the United Auto Workers (UAW) union.
Note the details on FCA's plans to move some production to China, and on the increasingly bitter differences between workers seeking to halt FCA's unsafe practices, and UAW leadership that has been caught accepting $1 million in bribes from FCA executives to surrender to the company.


The Left Should Commandeer Red State Democratic Parties
[Benjamin Studebaker, via Naked Capitalism 7-25-18].
....the urban left�s desperation to win the votes of people of colour is understandable�Bernie Sanders struggled with the demographic in 2016. African-Americans were largely excluded from the immediate material benefits of the New Deal. They are less likely to have nostalgia for the post-war era, a time when they faced worse discrimination than they presently face. There is less confidence within African-American communities that the universal economic programs which dominate progressive and democratic socialist agendas will deliver the goods, and more fear that if they nominate candidates who are radical that Republican candidates will win and expose them to explicitly discriminatory policies. This fear and mistrust is perfectly understandable and stems from a long history of neglect and abuse. There are also many African-American politicians in cities who have become rich contributing to the Democratic machine and who will happily use their influence within African-American communities to damage left-wing factions which challenge their position.

A Tale of Two Very Different Meetings
by Bernie Sanders [Reader Supported News, via Naked Capitalism 7-25-18].
On Friday, along with Alexandria Ocasio-Cortez, I went to Kansas and held rallies with two great progressive candidates who are running for Congress. In Wichita, according to local media reports, more than 4,000 people joined us at a rally with James Thompson.
Then in Kansas City, at our rally for Brent Welder, the convention center was so crowded the staff had to remove a wall in the middle while the event was going on to let more people in. 
There was quite a different event in Columbus, Ohio. Two hundred and fifty wealthy invited Democratic donors and Wall Street insiders came together at a gathering hosted by a real estate billionaire. Why were they there? ....What are they concerned about? That our ideas, such as Medicare for all, tuition-free public colleges and universities, a $15/hr minimum wage and progressive taxation are now mainstream positions. 
Make no mistake about it. The gathering in Columbus was not simply a social event. The corporate Democrats are plotting how to defeat progressives the only way they know how � with big money. But you�ve shown that, together, we can overcome their brand of pay-to-play politics.

Inside the mission to blow up the 2020 Democratic field
by Christopher Cadelago, July 23, 2018 [Politico, via Naked Capitalism 7-23-18]. 

�America Rising PAC, which at the time of its founding five years ago focused exclusively on researching, tracking and deploying rapid-response against Hillary Clinton, is well into a beneath-the-radar effort to define � and ultimately derail � the Democrats preparing to take on President Donald Trump in 2020�. With a potentially colossal field of Democratic presidential contenders and no one close to being a front-runner, the mission figures to be an expensive endeavor. So donors across the country are quietly getting the hard sell as the group moves toward its goal of raising $8 million for the 2020 cycle � roughly three times as much as it took in during the successful three-year quest to help defeat Clinton.�

From Wikipedia:
America Rising was founded in March 2013 by Mitt Romney's 2012 presidential campaign manager, Matt Rhoades.[2] Political strategist Tim Miller left the Republican National Committee (RNC) to join the clearinghouse. As of January 2014, between the PAC and the LLC run by fellow opposition research veteran Joe Pounder, the organization employed 47 people, full or part-time. CNN reported that America Rising would be split into two entities: a super PAC that aimed to spread negative stories about congressional Democratic incumbents and candidates through digital channels and earned media, and an LLC that would house a video library to be shared with GOP candidates, the RNC and other right-leaning groups.... 
During the Trump administration, America Rising, through its lawyer, sought e-mails of career employees of the Environmental Protection Agency who criticized President Donald Trump or EPA Administrator Scott Pruitt. The e-mail requests provoked fears of political retribution and was described by critics as a witch hunt.... 
America Rising Squared, a non-profit division of America Rising oversaw the targeting of environmental advocates such as Bill McKibben and Tom Steyer by deploying "trackers" to videotape them. Brian Rogers, executive director of America Rising Squared, said that the firm had focused on McKibben and Steyer because they "aggressively target conservative thought leaders.
[Newsweek, via Naked Capitalism 7-26-18]

Astronomy Photographer of the Year 2018 shortlist � in pictures 
[Guardian, via Naked Capitalism 7-25-18]

Chinese Researchers Achieve Stunning Quantum-Entanglement Record 
[Scientific American, via Naked Capitalism 7-25-18]
�Key finding appears to be ability to encode multiple qubits per particle � in this case, per photon.�



Since the 2007-2008, there has been a number of articles discussing why the modern macroeconomic thinking preferred by ruling elites is so divorced from reality, and prone to repeated errors of policy prescription. The two below are presented for those adventurous souls willing to wade into the mind-numbing fantasy land of the formal economics profession. Be warned: this is not the economic thinking that has led to the creation of successful national economies.

Lars J�rgen P�lsson Syll is a Swedish economist who is a Professor of Social Studies and Associate professor of Economic History at Malm� University College. Author of On the Use and Misuse of Theories and Models in Mainstream Economics (2016)

Where modern macroeconomics went wrong
Lars P. Syll, 23 July, 2018 [via naked Capitalism 7-24-18]
Almost a century and a half after L�on Walras founded general equilibrium theory, economists still have not been able to show that markets lead economies to equilibria. We do know that � under very restrictive assumptions � equilibria do exist, are unique and are Pareto-efficient. But � what good does that do? As long as we cannot show that there are convincing reasons to suppose there are forces which lead economies to equilibria � the value of general equilibrium theory is nil. As long as we cannot really demonstrate that there are forces operating � under reasonable, relevant and at least mildly realistic conditions � at moving markets to equilibria, there cannot really be any sustainable reason for anyone to pay any interest or attention to this theory.
The state of �New Keynesian� economics
Lars P. Syll, 24 July, 2018 [via naked Capitalism 7-25-18]
Mainstream economic theory still today consists mainly of investigating economic models. It has since long given up on the real world and contents itself with proving things about thought up worlds. Empirical evidence still only plays a minor role in mainstream economic theory, where models largely function as substitutes for empirical evidence. 
What is wrong with mainstream economics is not that it employs models per se, but that it employs poor models. They are poor because they do not bridge to the real world target system in which we live. Hopefully humbled by the manifest failure of its theoretical pretences, the one-sided, almost religious, insistence on mathematical deductivist modelling as the only scientific activity worthy of pursuing in economics will give way to methodological pluralism based on ontological considerations rather than �consequent advantages in terms of tractability.�

Wednesday, July 25, 2018

Monetary Theory and the Left



Tony (probably correctly) believes that I should write more about monetary theory.

Good point. Without monetary reform, there is simply no way the the world can pay the huge bills that will be incurred running an effective program to combat climate change. So in no particular order, here are my excuses for not writing about the subject every damn day�like it probably deserves.

1) I have written extensively on money and the economics of development. I still consider the chapter on Money to be the most well-thought-out chapter in Elegant Technology. But over the years, I have sort of run out of things to say.

2) The "left" is notoriously uninterested in monetary debates�lord knows I have tried. I have heard money debated in barber shops, gas stations, feed mills, church basements�sometimes (rarely) even in political forums. I grew up in the corn belt. My grandfather was an active member of the Farmer-Labor Party. But I haven't heard anyone from the "left" discuss the money subject since I started at U Minn in 1967. And the few people I have tried to engage either get lost in the math or the fact that fractional banking is not as established / legitimate as the big myths of banking and finance. The fact that the evidence is beyond rational debate does not sway minds�especially those who believe that "the personal is the political" and so shun the notion that something as impersonal as money may be the most important political subject of them all.

3) That leaves the "right." There are people like Ron Paul who are very good critics of the Federal Reserve. But his "solution" is the Gold Standard. Now the Fed has fallen into the hands of some serious fools, but on their very worst days, they are still a superior alternative to the Gold Standard.

4) Ellen Brown. Enter her name in the search box of this blog and you will find dozens of posts related to some well-written argument she is making. She loves the Bank of North Dakota�easily the best idea Progressives ever had. Strange how no one has duplicated that institution in other states, but she has done a nice job of lighting the fire that may lead to a California version.

5) There are a lot of crackpots out there. Because the nature of money is a subject that is virtually absent in the mainstream financial press, most people who develop any theories at all are usually self-taught. Now because there are a wealth of good books written about money and folks like Franklin, Edison, and Ford took an active interest in the subject, it IS possible to get your arms around this sprawling subject by reading alone, but it is difficult. It's the folks who aren't willing to do the necessary homework that end up as cranks.

Anyway, I promise to try to address legitimate monetary questions directed my way.

HAWB 1954-1976: The three major developments in aerodynamics


How America Was Built
HAWB 1954-1976: NACA, NASA, Richard Whitcomb, the Area Rule, Supercritical Wings, and Winglets

Do you like to look at aircraft? Have you ever wondered about the forward, second-deck hump of the Boeing 747? What about winglets, those vertical tips at the end of wings?

These are all the result of the U.S. government's active intervention into the economy. When Republicans, conservatives, and libertarians insist that nothing good comes from government, remember winglets and the 747's hump and realize that they are either lying shamelessly, or are embarrassingly ignorant, about the role of government.

By the end of the Second World War in mid-1945, aircraft design was on the verge of breaking the sound barrier. But aerodynamicists and aeronautical engineers were finding that achieving Mach speeds was much more difficult than anticipated. What we now know is that as an aircraft approaches Mach One in velocity, the aircraft's body generates shock waves in the air, which causes a huge spike in aerodynamic drag. The then accepted equations mathematically describing the aerodynamic behavior of aircraft just did not account for shockwaves formed at the speed of sound.

In 1943, the National Advisory Committee for Aeronautics (NACA, the forerunner of NASA) Langley Research Center in Hampton, Virginia hired a young aerodynamicist  who had just graduated from the Worcester Polytechnic Institute in Massachusetts. His name was Richard T. Whitcomb, and he was originally assigned to the Flight Instrument Division. This was not an area that held any interest for Whitcomb. He wanted to work in aerodynamics, and made himself enough of a nuisance that he was soon assigned to Langley's Eight-Foot High-Speed Tunnel, under the supervision of John Stack. 


Stack had just obtained approval to increase the power in the tunnel from 8,000 horsepower to 16,000 horsepower, so this was the first project Whitcomb worked on as a government employee. The upgraded wind tunnel was completed in the spring of 1945, and immediately researchers were able to obtain, for the first time, reliable airflow data for speeds up to Mach .95. 

But Stack and his team wanted even higher velocity. Over the next five years, Langley's wind tunnel engineers struggled to find a way to boost airflow to true transonic. In the meantime, wing and fuselage designs could only be tested at Mach speeds by attaching them to rockets. But these tests provided very limited data. Most importantly, it was not possible to obtain the Schlieren photographs that captured the shock wave patterns of high-speed airflows. These photos could only be taken in wind tunnels. (In the 1970s, NASA researchers would discover how to use diffracted sunlight in the atmosphere to obtain Schlieren photographs of objects in free flight.) 



Schlieren photograph of flow around airplane models showing the effect of sweptback wing design on shock waves (NASA history photograph). 

Also, rocket tests were "100 times as expensive as a wind tunnel test," according to one engineer. 

In 1950, Stack and his team of engineers, which included Whitcomb, developed a "slotted-throat" design for the 8-foot wind tunnel that allowed them to achieve transsonic airflows. For the first time, aerodynamic researchers had a tool to investigate precisely what airflows did at transonic speed, and  what might be causing the puzzling massive increase in drag encountered at the speed of sound. This development of the slotted-throat transonic wind tunnel at the Langley Research Center was deemed so important to the advancement of aeronautics that Stack and his team at Langley were awarded the Collier Trophy in 1951. (Since 1910, the Collier Trophy has been awarded annually by the Aero Club of America, National Chapter (now the National Aeronautic Association), " 'for the greatest achievement in aeronautics or astronautics in America, with respect to improving the performance, efficiency, and safety of air or space vehicles, the value of which has been thoroughly demonstrated by actual use during the preceding year.' The list of Collier winners represents a timeline of aviation, as many of the awardees mark major events in the history of flight.")

Now the scientists and engineers at Langley could see the turbulence that develops around an aircraft structure as it approaches Mach, but they still had to explain and understand it before they could begin developing solutions. Aerodynamic theory at the time rested on Bernoulli's principle that an increase in the speed of a fluid occurs in conjunction with a decrease in pressure or a decrease in the fluid's potential energy. This handily explained why a wing generated enough lift to sustain flight at subsonic velocity. But the theory obviously did not apply at transonic velocity. 

In late 1951 or early 1952, German aerodynamicist Dr. Adolf Busemannpresented a technical symposium on transonic airflows. Dr. Busemann had developed the concept of swept wings in Germany in the mid-1930s, and after World War Two had come to work at the Langley research center. It was Busemann's presentation that led Whitcomb to the breakthough in understanding and mastering transonic flows and shockwaves. Busemann explained that at the speed of sound, Bernoulli's theorem did not apply, and suggested thinking of the airflow as a series of stream tubes, the size of which remained constant. According to Lane E. Wallace's 1998 article, The Whitcomb Area Rule: NACA Aerodynamics Research and Innovation, in the official NASA history From Engineering Science To Big Science: The NACA and NASA Collier Trophy, edited by Pamela E. Mack,
In working with this kind of flow, therefore, the Langley engineers had to look at themselves as "pipefitters." Busemann's pipefitting metaphor caught the attention of Whitcomb, who was in the symposium audience. Soon after that Whitcomb was, quite literally, sitting with his feet up on his desk one day, contemplating the unusual shock waves he had encountered in the transonic wind tunnel. He thought of Busemann's analogy of pipes flowing over a wing-body shape and suddenly, as he described it later, a light went on. 
The shock waves were larger than anticipated, he realized, because the stream tubes did not get narrower or change shape, meaning that any local increase in area or drag would affect the entire configuration in all directions, and for a greater distance. More importantly, that meant that in trying to reduce the drag, he could not look at the wing and fuselage as separate entities. He had to look at the entire cross-sectional area of the design and try to keep it as smooth a curve as possible as it increased and decreased around the fuselage, wing and tail. In an instant of clarity and inspiration, he had discovered the area rule.
What Whitcomb had discovered -- the area rule -- was that formation of shock waves are minimized when the total area distribution of an aircraft is smooth. For an aircraft moving forward, when the wings enter the air stream there is a sudden increase in the aircraft area distribution, causing a sudden spike in shock waves generated. Whitcomb found that making the fuselage narrower in a "coke bottle shape" smoothed out the aircraft area distribution, eliminating most of the shock waves that were causing so much drag at transonic and supersonic speeds, particularly between Mach 0.75 and 1.2.

For commercial aircraft, it is much cheaper to design and build a fuselage with a constant cross section, so the "coke bottle shape" is never a good option. In the case of the 747, Boeing designers solved the problem by creating the 747's distinctive front hump, which contains a second level passenger deck. Speed was a major design factor since the 747 was designed for ultra-long distance flights. With a maximum speed of .855 to .860 Mach, the 747 remains the fastest jetliner in the world, despite its massive size, thanks to Boeing's unique application of Whitcomb's area rule. 




Seeking approval to test his theory in the wind tunnels, Whitcomb tried to explain his insight. Stack and others were skeptical, but Busemann understood immediately what Whitcomb was trying to explain. Busemann told the others at the presentation that Whitcomb's idea was "brilliant" and Busemann's influence was great enough that Stack gave his approval for the tests.

In August 1952, not long after the wind tunnel experiments had proven Whitcomb's theory correct, a team of engineers from Convair were at Langley to test models of their new F-102 fighter aircraft in the High-Speed Tunnel. The Air Force contract with Convair specified that the F-102 be capable of supersonic flight. But the wind tunnel tests at Langley showed that Convair's design would not meet the supersonic specification. Wallace relates what next transpired:
Shown the disappointing test results, the engineers asked the Langley engineers if they had any suggestions. Whitcomb's first research memorandum on the area rule would not be published for another month, but he had completed his tests on the various wing-body combinations using indented fuselage shapes. He explained his findings and the area rule concept to the Convair team. 
Intrigued, the Convair engineers worked with Whitcomb over the next few months to experiment with modifying the F-102 design and building a model that incorporated the area rule concept. At the same time, however, the company continued work on the original F-102 prototype. 
Even at that point, Convair might have continued to press for production of the design as it was, given that the tooling and production line in its San Diego plant was already set, except for one crucial factor. The Air Force officials working on the F-102 design were aware of Whitcomb's area rule and the fact that a modified F-102 model, based on that concept, had achieved supersonic speeds in wind tunnel tests. Consequently, the Air Force realized that the F-102 was not the best that Convair could do. Whitcomb's experiments had proven that a supersonic airplane was possible, and the Air Force decided to settle for no less. The F-102 program manager at Wright Field in Ohio informed Convair that if the company did not modify the F-102 to achieve supersonic flight, the contract for the fighter/interceptor would be cancelled.

1953 NASA photos show models of the delta-winged Convair F-102 before, (left) and after (right) modification to take advantage of Whitcomb's "area rule. These models are mounted on rockets for flight at the Wallops Island launch site. For scale, note the man in the lower right in the right picture.  (NASA Photo).

The reluctance of Convair's management to discard the production tooling they had already installed in San Diego illuminates the wisdom of First Secretary of the Treasury Alexander Hamilton, who rejected the "free market" ideas of Adam Smith. In his chapter on Whitcomb, Wallace writes:
NACA or NASA engineers tend to measure the success of a new idea or technology strictly in terms of technical objectives met. Industry, on the other hand, measures innovative success in terms of profit dollars generated within a specified payback period. Consequently, a new approach or technology, even if it is technically "better," may be rejected by industry if its use involves extra costs for the manufacturer. These costs can be in retooling for a new design, replacing machinery, or even in retraining employees or changing the traditional ideas and approaches of its engineers. All of these factors can produce resistance to a new idea or technology within a company, and overcoming that resistance can be a difficult process.
Here is Hamilton, writing in 1791:
Experience teaches, that men are often so much governed by what they are accustomed to see and practise, that the simplest and most obvious improvements, in the most ordinary occupations, are adopted with hesitation, reluctance, and by slow gradations�. To produce the desirable changes as early as may be expedient may therefore require the incitement and patronage of government� it is of importance that the confidence of cautious, sagacious capitalists, both citizens and foreigners, should be excited. And to inspire this description of persons with confidence, it is essential that they should be made to see in any project which is new�and for that reason alone, if for no other, precarious�the prospect of such a degree of countenance and support from government, as may be capable of overcoming the obstacles inseparable from first experiments. (Report on Manufactures)
In the continuation of Wallace's account below, next note the government's decision to deliberately share the results of its research with private companies. This has been repeated throughout USA history, from metal-working machine tools designed and built in the federal armories after the War of 1812, to the Army officers ordered to assist, plan, superintend, and even manage railroad construction in the 1840s and 1850s, to the Navy's experiments during the Civil War on steam engine thermodynamics, to the famous Moore School lectures of summer 1946, when the Army's Ballistics Research Laboratory and the Navy's Office of Naval Research deliberately disseminated the knowledge needed to design and build electronic computers. This knowledge had been gained, at the government's expense, in the ENIAC, EDVAC, and other military projects which created the first working computers during World War Two. By deliberately spreading this knowledge, the government was acting in accord with Hamilton's plan, creating not only an entire new industry but a technological phase change of the entire economy. 
While Convair was struggling with its F-102 design, the Grumman Aircraft Engineering Corporation was also working to develop its first supersonic carrier-based fighter, the F9F/F-11F Tiger. Although the area rule research was classified, the NACA released a confidential Research Memorandum on the subject to appropriately cleared aircraft manufacturers in September 1952. Just two weeks after receiving that memorandum, Grumman sent a group of its engineers to Langley to learn more about it. The information they brought back to Bethpage, New York, was immediately incorporated into the design, and in February 1953, Whitcomb was flown in to review the final design plans before construction on the prototype was begun. On April 27, 1953, the Navy signed a letter of intent with Grumman for the fighter, based on the Whitcomb-approved design. On August 16, 1954, the Grumman F9F-9 Tiger "breezed" through the sound barrier in level flight without the use of the afterburner on its Wright J-65 turbojet engine.
In the 1960s, Whitcomb and his colleagues in NASA began examining the problem of wing design at transonic and supersonic speeds. At these speeds, the air moving over the wing achieves Mach 1 velocity before the wing itself does. (This is what wings are supposed to do: force the air over a wing to move over a greater distance because of the wing chord, thus decreasing the air pressure over the top of the wing and creating lift.) But if a shock wave forms on top of the wing, drag on top of the wing can overpower much of the lift produced. In these circumstances, pilots almost always found that the aircraft became uncontrollable. Something else besides Whitcomb's area rule had to be found to solve this next problem.

The solution was first suggested in Germany in 1940, during World War Two, by K.A. Kawalki at the German Research Institute for Aviation Berlin-Adlershof. Kawalki and other German aerodynamacists were even able to test some wing designs in 1944, but by then Germany was already suffering severe damage from Allied bombing and was clearly going to lose the war. So it fell to Whitcomb to design, test, and perfect a supercritical airfoil in NASA's wind tunnels in the 1960s.

There was the obvious military application, but the real impetus came from passenger airlines, who had concluded that supersonic service was the obvious next step in the development of commercial aviation. The airlines were furiously lobbying aircraft manufacturers to come up with a supersonic airliner. When the British and French announced, in 1962, their intent to design and build what would become the Concorde, Pan Am quickly placed orders. In response, President John F Kennedy announced the creation of a National Supersonic Transport Program during his Graduation Day speech at the U.S. Air Force Academy on June 5th, 1963, and within a few weeks, the Federal Aviation Administration issued a request for SST proposals from the aviation industry.

Whitcomb found that the ideal wing design for supersonic flight required flattening the top soon after the leading edge, while incorporating a curve on the bottom of the wing at its trailing edge. This design moved the point on top of the wing where the air reaches supersonic speeds much farther back, minimizing the shock wave and creating less wave drag on the wing.
NASA drawing comparing a standard airfoil with a supercritical airfoil. 

The Arab Oil Embargo of 1973 greatly weakened the desire of airlines to operate supersonic aircraft, and the Congress soon stopped funding for research and development of a supersonic transport. However, the supercritical airfoils developed by NASA under Whitcomb's direction, were found to provide superior lift and fuel efficiency, and have been widely incorporated in transonic airliner designs as well as military aircraft. It has been estimated that supercritical airfoils have given airlines a 15 percent jump in fuel efficiency each year for the past three decades.

Here is a great irony: the area rule and supercritical wings were developed at government expense, and have been crucial to the success of the business jets which the rich have come to prefer over commercial flights. The Cessna Citation X, for example, which was the world's fastest business jet since its introduction into service in July 1996, used supercritical wings to achieve its cruise speed of .90 Mach. In fact, Cessna consulted with Whitcomb on the aerodynamic design of the  Citation X

The irony, of course, is that many of the rich people who are jetting around the world using aerodynamic design principles developed and introduced by the government, are conservative and libertarian ideologues who insist that government can't do anything right!

In the 1980s, Whitcomb studied ways of making wing design even better. According to one report:
NASA' s Richard T. Whitcomb invented these nearly vertical wingtip extensions in the early 1970s as a means by which wing lift-to drag performance could be increased. Indeed, Whitcomb's research in 1976 indicated that winglets could reduce induced drag by 20 percent, resulting in about nine percent better lift-to-drag performance at 0.78 Mach for a specific wing loading. Whitcomb concluded that winglets produced twice the benefit of a wingtip extension with the equivalent area. As a result, winglets imposed much less weight and drag penalty than increasing wingspan. Far from the simple wing end plates patented by Lanchester in 1897, Whitcomb's early 1970s-vintage winglets were carefully designed airfoils that harnessed the energy of the wingtip vortex. Many of the original design principles still are used in the latest generation of winglets.


On July 6, 2018, at the Tuckahoe Steam and Gas Show eight miles north of Easton, Maryland, I had the pleasure of meeting William (Bill) H. Clarke, who is a NASA retiree. When I asked him what he had done at NASA, Mr. Clarke told me he had been a wind tunnel drive technician at the Langley Flight Research Center.

Obviously, I had to ask him: did you know Richard Whitcomb? Fortunately, Mr. Clarke had already seated himself in his walker. He was delighted to sit with me for the next ninety minutes and reminisce about his work, which justifiably gave him great pride.

Mr. Clarke worked personally with Dr. Whitcomb for his entire NASA career. His job was to monitor and maintain the massive electric motors and associated electrical equipment which drove the air in the wind tunnels. When the original facility was built at Langley in 1936, it was equipped with a synchronous electric motor that delivered 30,000 horsepower. By the 1970s, there were several other wind tunnels at Langley. The wind tunnel Mr. Clarke worked on used two 35,000 horsepower motors for two 10-foot diameter pipes, and a third 30,000 horsepower motor that took air out of the side of the tunnel. He said he lived three miles away from the facility, and when this tunnel was running, you could hear its whistling sound in his house.

 
William H. Clarke, at the Tuckahoe Steam and Gas Show, July 6, 2018.

In 1982, NASA rebuilt part of the Langley facilities as the National Transonic Facility, originally with motors of 100,000 horsepower. These were upgraded in a few years to 135,000 horsepower.

These motors used an awesome amount of electricity. The unitary wind tunnel, which Mr. Clarke never worked at, consumed 2.5 million kilowatt hours each month, he said. The 16-foot wind tunnel needed 84 megawatts to run its two fans and one compressor.

The wind tunnels Mr. Clarke worked on at the National Transonic Facilty (NTF) used nitrogen to decrease airstream temperatures as low as minus 275 degrees. He explained that there were three ways to get a wind tunnel to �chase high Reynolds numbers�: increase the air pressure; increase the speed, or decrease the temperature. (The Reynolds number is a measure of the ratio of inertial forces to viscous forces in an airflow. It basically describes whether the flow conditions are laminar (smooth) or turbulent. High Reynolds numbers are the goal for the design of high-speed and high-performance aircraft.)

Mr. Clarke said that when it was discovered the NTF used all 200 kiloliters of nitrogen in just 20 minutes, it was equipped with new 800 kiloliter tanks.

One of Mr. Clarke�s first remarks was that Dr. Whitcomb was a genius. According to Mr. Clarke, Whitcomb drove a Volvo P1800 sports car. �It was a bit dinged up,� Mr. Clarke recalled. �Dr. Whitcomb would often get deep into thought while driving, and sometimes ran into things.�

Though he was revered at Langley by the 1970s, Dr. Whitcomb was difficult to work with. �He burned out a tunnel technician every three months,� Mr. Clarke recalled. When he became deeply engaged in a problem, Whitcomb paid no attention to normal working hours. Mr. Clarke remembered one day when Dr. Whitcomb was at the tunnel when the morning shift started, and was still there when the afternoon and evening shifts came on duty. At some point during the night shift, Dr. Whitcomb, clearly near exhaustion, finally stood up, and walked out, without saying a word to anyone.

This description of the Unitary Wind Tunnel at Langley, from a 1957 NACA manual, gives some idea of the complexity of this facility. And this was in 1957!
The drive system consists of a 20,000-horsepower liquid-rheostat-controlled woundrotor
starting motor driving through a gear box to the main drive line-up. This line-up
consists of a 63,333-horsepower synchronous motor driving six large capacity centrifugal compressors. The combined maximum overload capacity of the two motors is 100,000 horsepower for thirty minutes. The compressors can be arranged in five different configurations by valves in the interconnecting ducting in order to provide the wide range of volume flows and compression ratios required for the two test sections. Since the capacity of the drive system will supply only one of the test sections at a time, they cannot be operated simultaneously. The system that supplies air to the tunnel consists of compressors, vacuum pumps, and air dryer and air storage vessels as shown in Figure 1. It supplies air to the tunnel at a dewpoint of lower than -650 and at the required stagnation pressure, and provides for evacuation and recharging of the tunnel or portions thereof for purging and starting.


When Whitcomb died at age 88 in October 2009, NASA posted an obituary on the the internet.
"Dick Whitcomb's intellectual fingerprints are on virtually every commercial aircraft flying today," said Tom Crouch, noted aviation historian at the Smithsonian Institution. "It's fair to say he was the most important aerodynamic contributor in the second half of the century of flight." 
Whitcomb came up with three important aeronautical innovations while working at NASA Langley, one in each decade of his career. If the area rule was Whitcomb's major accomplishment of the 1950s, his supercritical wing revolutionized the design of jet liners after the 1960s. The key was the development of an airfoil that was flatter on the top and rounder on the bottom with a downward curve on the trailing edge. That shape delayed the onset of drag, increasing the fuel efficiency of aircraft flying close to the speed of sound. 
In the 1970s it was an article on birds that led Whitcomb to develop his third significant innovation -- winglets -- refining an idea that had been around for decades. Other engineers had suspected that end plates added to the wing tips could reduce drag. But the Langley engineer proved a simple vertical plate wasn't enough. "It is a little wing. That's why I called them winglets," said Whitcomb. "It's designed with all the care that a wing was designed." Winglets reduce yet another type of drag and further improve aerodynamic efficiency. Many airliners and private jets sport wingtips that are angled up for better fuel performance.

Richard Whitcomb looks over a model that incorporates his supercritical wing concept.
Image Credit: (NASA Photo)

This is an interesting video produced at Langley Research Center which shows the terrifying results of flutter on aircraft structures. Next time some conservative or libertarian begins venting against government, try to picture him or her taking a ride home in a non-NASA approved fluttering aircraft.


Some of the past posts in the series HAWB - How America Was Built

HAWB - Introduction - How America Was Built
Monday Jan 26, 2015

HAWB 1783 - Benjamin Franklin on the Augmentation of Wages - How America Was Built
Monday Feb 02, 2015

HAWB 1801 - Alexander Hamilton and Albert Gallatin - How America Was Built
Friday May 29, 2015

HAWB 1791 - Alexander Hamilton rejected Adam Smith
Tuesday Oct 20, 2015

The Power to Govern
Tuesday Dec 08, 2015

HAWB 1863 - Admiral Benjamin Franklin Isherwood and Steam Power - How America Was Built
Monday Dec 28, 2015

HAWB 1791-2001Hamilton and the Apple I-phone - How America Was Built
Sunday Feb 28, 2016

HAWB 1800s - It was NOT free trade - How America Was Built
March 11, 2016

HAWB 1800s - The Doctrine of High Wages - How America Was Built
April 1, 2016

HAWB 1870s - American producer class hero Peter Cooper - How America Was Built
May 22, 2016

A Short Crash Course in American Political Economy
November 25, 2016

HAWB � Creating America�s Amber Waves of Grain � How America Was Built
January 1, 2017

HAWB 1940s-1950s Timeline of computer development shows crucial role of government
December 3, 2017

How America Was Built: Alexander Hamilton versus Shareholder Value - HAWB December 1790
May 17, 2018

Climate Grief

Below is a pretty good description of what the author calls "climate grief"�the crushing realization that everything at all lovely...