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We taught a helicopter ground school today at East Coast Aero Club. One of the students was a recent graduate in mechanical engineering from Northeastern University. He was unable to understand or work with the concepts of potential and kinetic energy, achieving the lowest score on the final exam out of the 15 or so people present (folks who’d majored in political science achieved near-perfect scores, for example). His score was slightly better than chance, which put him above a Boston University engineering graduate last spring. A remarkable number of U.S. science and engineering graduates seem to have missed the entire “big picture” of science and engineering.

“The Shadow Scholar”, an article by a guy who writes term papers, makes me wonder if the schools in question can be exonerated for granting bachelor’s degrees to those who are almost entirely ignorant and unskilled. The 105th comment on the article is interesting: “Mandatory math, statistics, physics, and chemistry courses are my bread-and-butter. Online grading and test taking allow me to earn a good living. I have done this for students ranging from secondary school to medical school. For me, business has exploded with online courses and the poor economy. Overburdened faculty try to find the most efficient way to administer exmas and they have opened up a surprisingly lucrative business area.”

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Folks:

I’d appreciate comments on this interview with a recent helicopter student graduate.

Thanks.

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Here’s an article from New Delhi about an American’s three-day trip to India. Some highlights:

• the U.S. Navy is sending “a fleet of 34 warships, including an aircraft carrier”
• “800 rooms have been booked for the President and his entourage in Taj Hotel and Hyatt”
• “13 heavy-lift aircraft with high-tech equipment, three helicopters and 500 US security personnel have arrived in India ahead of Obama’s visit”

[Thanks, Kishore, for sending me this link.]

A better illustrated and more nuanced account of the visit is available from The Daily Mail.

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Catching up on news after a few days in Southern California, I noticed this article about Barack Obama visiting a mosque in Jakarta then”criticizing Israel”, a tiny country 5400 miles away from his audience. Had he not said anything about the Jewish state, it seems that reporters would have had to look hard for something newsworthy to say about our president.

It reminded me of Jimmy Carter. After people concluded that he didn’t have any wisdom to offer on the subject of how to support economic growth, Carter mostly faded into obscurity until he began complaining about Israel (see Wikipedia).

Unless we Americans manage to rebuild our economy, the remaining years of the Obama Administration could be rather rough on Israel (which is itself in remarkably good economic shape, with a growth forecast of 4 percent for 2010 and an unemployment rate of about 6 percent; the U.S. economy is growing about 2 percent (source) annually, with unemployment between 9 and 17 percent depending on the counting of discouraged workers).

I guess Jews can be grateful that George W. Bush, presumably also discredited as a source of advice to governments looking to foster sustainable economic growth, has apparently refrained in his recent memoir (excerpts) from blaming Israel for the world’s ills.

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Some work as a software expert witness (on a case regarding a massively parallel database management system patent) took me out to Southern California this week. Here are a few random thoughts occasioned by the trip…

Getting to San Diego is no longer a simple proposition. The shrinking domestic private economy has resulted in a lot of schedule cuts at airlines. Government and health care workers don’t need to travel much; Wall Streeters don’t need to fly out of Boston. Out of all the airlines, there is only one non-stop per day and that left in the morning ($600/seat on JetBlue!), so I connected via Salt Lake City on a couple of Delta flights on Monday afternoon.

I endured two nights at the W Hotel in San Diego, which is notable for its cramped dark overfurnished rooms. I hadn’t taken a close look at the telecommunications charges at the place before, but they struck me this time: $15/day for Internet and about $20 for a five-minute phone call back to Massachusetts (I had brought a Sprint 4G AMOLED Samsung Galaxy S Android phone (very nice device, and I think all phones should have an AMOLED display, but 3X the battery capacity would have been nice), so did not have to contemplate paying these fees). I’m wondering if our inefficient telecommunications infrastructure, particularly in hotels, is impairing economic growth. In 2001 in Singapore I stayed in a hotel with free Internet and calls to the U.S. were just a few cents per minute.

After doing some work in Orange County I wanted to fly back from the John Wayne airport (SNA), but schedule reductions meant that it simply wasn’t possible to get back to Boston without an all-night layover somewhere. Even getting home from LAX would be tough as there was only one nonstop redeye (JetBlue, $600, only middle seats remaining). I rented a Ford car for the one-hour drive to LAX. As with other rentals, this $25,000 product of U.S. industry had no navigation system. Fortunately the Samsung phone was ready with a navigation system that calculated a route to my cousin’s house in Los Angeles. At first it said that the drive would take about one hour, but after checking for traffic corrected that to three hours (I left Orange County around 6:15 pm). I pushed the traffic icon and heard the sad words “no faster route found”.

It actually did take nearly three hours to get to my destination, by which time I was so worn out that I decided to stay overnight in LA ($200 expense at the Sheraton Gateway LAX). After enduring what I assume is typical LA weekday evening traffic I wondered who would want to invest in LA. The traffic makes life there almost as miserable as in a lot of Third World cities (and maybe even as miserable as life in Boston in February), but the potential returns on investment are much lower.

The legacy carriers seem to have given up on the LAX/BOS route, which meant that my choices were Virgin America and JetBlue. Virgin America was much cheaper and had an earlier flight, so I tried it out for the first time. The staff are very friendly and in some small ways it might be better than JetBlue (e.g., I was able to improve my mind by watching The Kids are Alright and The Other Guys (hysterical) on demand). We landed in Boston at the very worst possible time for driving out to the suburbs from the city center (leaving about 5 pm), but there were no delays on the Boston highways. The Border Collie was happy to see me.

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The U.S. has some systems in place that virtually guarantee fiscal trouble in the event of an economic downturn. A lot of government expenses, e.g., Social Security and public employee pensions, are adjusted for inflation, which is no longer necessarily related to the ability of American workers to pay higher taxes.

A few decades ago, when a smaller percentage of the U.S. economy was exposed to the world market, the current system of CPI adjustment might have made sense. It was tough for prices to rise without U.S. wages to rise since almost everything that we were buying came from within the U.S.

Today, however, prices for a lot of important items are determined by worldwide demand. For example, oil can become much more expensive and boost the cost of living even if Americans aren’t consuming more oil. The products we buy may get more or less expensive depending on the prices of labor and materials in China.

The ability to pay for programs such as Social Security and pensions for retired government workers depends on the level of private sector wages as well as the number of private sector workers. Why not therefore add some built-in stability to the system by adjusting pensions and Social Security to median private sector hourly wages rather than inflation? If typical working Americans are able to pull ahead of inflation, non-working citizens can share in the fruits of their success. If typical working Americans slip behind inflation due to worldwide economic forces beyond our control, non-working citizens will suffer a comparable reduction in lifestyle.

Right now an external inflation shock, such as a rise in oil prices, has a destabilizing effect on the U.S. economy because a lot of government expenses are automatically increased while the tax base to pay for those expenses may actually be shrinking.

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The folks at ThirdWay.org have come up with a sales receipt visualization of federal government spending:

• for a taxpayer earning the median income
• for taxpayers earning $200,000 (working) and $100,000 (retired)

I wonder if we checked out of the mall with a receipt like this how we would feel about the value received!

[Of course, this misses state income tax, state sales tax, local property tax, and other state and local taxes, so it doesn’t tell us where about half of our total tax dollars are going. I think the visualization also misses federal taxes on air transportation, fuel, imports, etc.]

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A New Yorker magazine review of a book about the negative effects of humanitarian aid (“Alms Dealers”, October 11, 2010) contains an interesting fact about Florence Nightingale, the founder of modern nursing:

Humanitarianism also had a godmother, as Linda Polman reminds us. She was Florence Nightingale, and she rejected the idea of the Red Cross from the outset. “I think its views most absurd just such as would originate in a little state like Geneva, which can never see war,” she said. Nightingale had served as a nurse in British military hospitals during the Crimean War, where nightmarish conditions—septic, sordid, and brutal—more often than not amounted to a death sentence for wounded soldiers of the Crown. So she was outraged by Dunant’s pitch. How could anyone who sought to reduce human suffering want to make war less costly? By easing the burden on war ministries, Nightingale argued, volunteer efforts could simply make waging war more attractive, and more probable.

The rest of the book review is also interesting, suggesting that Western humanitarian aid has made African conflicts far more bloody and gruesome.

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Folks:

I’ve drafted a product idea, Video Editing Tablet, and would appreciate comments/corrections.

Thanks.

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The stock market is up this week, with the S&P 500 closing at 1221, the highest it has been since the Collapse of 2008. Simultaneously, the Federal Reserve has announced plans to buy U.S. Treasury bonds (i.e., print money). Before we look at the nominal dollar figure and get excited about how well we’re doing, let’s look at the S&P 500 in euro:

• January 1, 1999, the date the euro started trading: S&P 500 at 1229, euro worth $1.18, so the stocks were worth 1042 euro
• November 4, 2010: S&P 1221, euro worth $1.42, same stocks worth about 859 euro

Valued in dollars, U.S. stocks have been flat over the 12-year period. Adjusted for inflation, they’ve fallen by 31 percent.

Valued in euro, they are down 17.5 percent. I haven’t found an authoritative euro inflation calculator, but it looks as though they’ve had a similar inflation rate to the U.S. So adjusted for inflation, an investor has lost about 42 percent in euro spending power.

The Federal Reserve has the ability to make us all billionaires. We’ll feel great about our new wealth until we step out of a plane in Paris and discover that USD$1 billion is also the price of a Diet Coke at Roissy.

[I am feeling slightly bullish on the stock market after the election. With opposing parties in control of various parts of the lawmaking process, there is a potential for gridlock. Our existing system of crony capitalism may not be ideal, but it is well understood by American businesses. They will very likely be more confident investing in the U.S. with some assurance that the legal and regulatory environment will be stable. If companies could be guaranteed that no laws would change for the next two years, that will be a far friendlier environment than having to adjust to dramatic new legislation that may intentionally or inadvertently favor competitors. If nothing else, the end of the election will give a boost to aviation businesses nationwide because Barack Obama won’t be flying out to Democratic fundraisers every day and shutting down 3000 square miles of airspace centered on wherever he happens to be. If Obama is at his desk in Washington working with the Republicans, it means that we flight instructors will get a chance to work as well!]

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