Re: 1929 deja vu

From: Michael S. Lorrey (
Date: Fri Apr 28 2000 - 06:25:42 MDT

John Clark wrote:
> Michael S. Lorrey <> Wrote:
> > union workers as in a) high salary for low skill work, b) lots of convoluted, expensive,
> >and time wasting work rules,
> If your opinion of unions is that low then why are you worried that technology will
> render them obsolete; or are you just a fan of incompetence and red tape?

Whe a union has a stranglehold on the current industry dominators, that
causes a significant barrier to the entry of new technology.

> > the turmoil of crashing markets
> Oil markets will crash, fusion markets will not.

And if fusion markets employ fewer people than the oil markets, you'll
have a period of high unemployment. When the oil markets crash, the
wealth of those invested in oil technologies will evaporate overnight,
reducing the amount of capital on the markets that is available to
invest in new fusion manufacturing.

> >will cause large amounts of capital to evaporate.
> So if an airline, for example, found its fuel bill was now zero that would cause
> financial difficulty for the company and it would no longer be able to finance expansion.
> Does that sound right to you?

Oil companies will not be able to afford to distribute oil that is worth
less than the cost of distribution and refinement, so the airlines will
not even be able to get their hands on enough fuel...for a short period
of time. It will sort itself out in a while. In the meantime, nobody is

> >Actually, stealth technology *is* being used commercially, even down to the point
> >where you can buy a bra for your car made of stealth material to help protect
> >yourself against radar speed traps.
> And if a stealth bra is not worth a few hundred billion dollars what is? Your tax dollars
> at work. What's next, Tang and non stick frying pans?

Mock all of these consumer products if you want John. You are getting
really obviously stubborn about winning your argument.

> >I don't know the cost of a B-1 bomber (which is not a stealth bomber)
> True, I meant to say a B2 bomber
> >but the B-2 bomber (which is a stealth bomber) costs around $800 million
> The cost per airplane is about 2 billion, but the military can get very creative with
> their accounting when they want good PR, you could probably get a $800 million
> figure if you ignored the huge R&D bill (mostly D), but as there are no plans to build
> any more of these white elephants that doesn't seem like good accounting practice to me.

I don't know where you are getting this figure, as the $800 million
figure was one calculated by the opponents of the B-2 to make it look as
expensive as possible (even though that figure includes lots of stuff
other than just the airplane). I imagine you are cooking this up in
order to win the argument, as you seem to be acting very stubbornly
obtuse in this thread.

> >A B-2 bomber weighs over 400,000 lb. which equals 6.4 million ounces. An ounce of
> >gold goes for around $250-300, which makes the weight of the B-2 in gold equal to
> >about $1.6-1.95 billion,
> Sound just about right.
> > What it did have to do with technology and productivity is that the change in market demand
> >for grain in the negative to that extent was not foreseen by the farmers, or by the bankers
> >who allowed them to mortgage their farms to buy all the latest and greatest farm equipment
> If I've parsed that formidable sentence correctly then foreign governments stopped importing
> food and local government jacked up interest rates so high that farmers could no longer pay
> their bills and that's technology's fault. Huh?

John, you are being WAY obtuse. I don't see how you can fail to get my
point. Perhaps you are editing out too much of my writing in your mind
before you read what I am saying? ;) I will make it nice and simple so
even a child should understand this:

When industries are heavily invested in current technologies to increase
production, and market demand suddenly drops by a large margin, you will
wind up with many bankrupt companies (whose market value has evaporated)
and many displaced employees. The high enemployment and the loss of
capital value both can cause severe economic turmoil if that industry is
a large enough sector of the economy.

If the demand for the products of that industry is being taken by a new
industry that uses much more efficient technology to produce new, higher
tech products at lower prices, using fewer workers, then the dislocated
employees of the first industry will not be fully absorbed into the new
generators of wealth. I have agreed that over the long run things sort
themselves out and we are all for the better in the end, but in the
short term the economy cannot take up the slack caused by these
unforeseen paradigm changes, just as any system that has its point of
equilibrium shifted suddenly will break up into turmoil and chaos until
it settles into its new equilibrium point.

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