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Now that McDonald’s has started playing Christmas music, it is time to start thinking about Santa. The second-to-last paragraph of “Diagnostics and Therapeutics in Political Economy” by Robert Higgs offers a seasonally appropriate comparison:

Many Americans now believe many things about their government that are false, and they expect much from the government that the rulers cannot provide. The public at large embraces myths about what the government can do, what it actually does, and how it goes about doing it. Only people enamored of such myths can support, for example, a gigantically expensive health-care “reform” at a time when the present value of the government’s promised future Social Security and Medicare benefits alone amounts to several times the current GDP. (I am disregarding here the interested parties who expect to reap short-run pillage from an intrinsically doomed system.) Until more people come to a more realistic, fact-based understanding of the government and the economy, little hope exists of tearing them away from their quasi-religious attachment to a government they view with misplaced reverence and unrealistic hopes. Lacking a true religious faith yet craving one, many Americans have turned to the state as a substitute god, endowed with the divine omnipotence required to shower the public with something for nothing in every department – free health care, free retirement security, free protection from hazardous consumer products and workplace accidents, free protection from the Islamic maniacs the U.S. government stirs up with its misadventures in the Muslim world, and so forth. If you take the government to be Santa Claus, you naturally want every day to be Christmas; and the bigger the Santa, the bigger his sack of goodies. This prevailing ideology constitutes probably the most critical obstacle to reductions in the government’s size, scope, and power. Getting rid of this ideology will be diabolically difficult, if possible at all.

The author has a Ph.D. in Economics from Johns Hopkins (compared to my meager collection of econ courses taken), but I believe him to be wrong about Social Security and Medicare benefits. As pointed out in my blog postings on While America Aged, Congress has the authority to change the Social Security age of eligibility to 75 or 80 or to adjust Medicare so that anesthesia returns to the good old days of whiskey and a bullet to bite. It is states and local governments that are truly stuck with their pension and health care promises.

For Americans who don’t pay income tax, perhaps the government truly is Santa Claus. According to the Brookings Institution and the Urban Institute, roughly 47 percent of Americans either pay no tax or a negative tax (i.e., the government sends them money every year through such programs as the Earned Income Tax Credit). So you’d think that any new government spending program would attract at least 47 percent of potential voters. On the other hand, millions of people who do not suffer the scourge of income tax still get hit with assorted other taxes at both the state and federal level.

What am I telling people that I want from Santa this year? World peace, of course (because I want to win the Nobel Prize after Sandra Bullock gets hers). And that I want Barack Obama to become immortal and then to be elected President-for-Life.

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Imagine a group of engineers so gifted that U.S. taxpayers were willing to spend more than $50 billion to keep them together. These folks designed a vehicle that weighs 6000 lbs. empty and is advertised as having safety advantages over cars designed by companies that operate without continuous government assistance. Tiger Woods, a man whose physique is presumably far more durable than average, drives this vehicle across a lawn and into a tree at a pretty low speed. Did he bound out of his Cadillac Escalade without a scratch? According to the New York Times, “Woods was slipping in and out of consciousness. [the police] said Woods suffered lacerations to his upper and lower lips and blood in his mouth, and that he was treated on scene for 10 minutes before being transported to a nearby hospital.”

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Things I am thankful for today:

• to have been born into the United States, a country that has been blessed with tremendous natural resources, mineral, animal, vegetable, and scenic, as well as remarkable tolerance for people of different races and beliefs
• the American Indians, who welcomed European settlers into this country
• family members who remain alive and healthy
• close friendships with people whom I met as far back as the 1970s
• the friendship of dogs, especially Samoyeds, over the years
• to have spent the early years of my career during a time of tremendous economic prosperity (1980s and 1990s)
• the hard work of engineers, scientists, and mathematicians since the Enlightenment who have made our comfortable modern lifestyle possible
• to have seen my peculiar passion, the Internet, grow from a research curiosity when I started using it in 1976 to a worldwide utility
• to have lived in the age of photography, which has enabled almost everyone to capture and record the world around us
• to have lived in a time when humans can realize a dream that may date back many thousands of years: to fly (and to have been born into a country where almost anyone can get into an affordable aircraft and poke around curiously at low altitudes over most places)

And now off to friend’s farm in Vermont. He says “my aunts cook the Thanksgiving meal to a reference standard.” Weather at KVSF is overcast 600; the instrument approach minimums are 1000′. This will be a trip in a car, another product of recent years for which I am grateful.

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According to this New York Times article, President Obama will be the figurehead for a new program to encourage American kids to study engineering, math, and science. One wonders how effective this will be, given that Mr. Obama himself has been one of the most successful Americans of all time without ever having studied any engineering, math, or science. Obama’s undergraduate major was political science. Instead of enduring six years of slavery in science graduate school, Obama enjoyed three years of professional training at a law school. Wouldn’t a kid, every time he saw Obama’s face or heard his name, be encouraged to drop tech courses and pick up politics and law?

I would be grateful if readers can fill the comments section of this posting with the names of people holding power in Washington, D.C. right now who have a substantial technical background.

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… and then decide to do nothing about flight crew work and rest time regulations. It is tough to know whether to be glad that businesses won’t have to spend money figuring out how to comply with these new rules or sad that tax dollars have been paying government workers to sit in meeting rooms for 17 years to no purpose.

More: aero-news.net.

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The FAA has published a flight restriction for Nantucket from Wednesday (tomorrow) at 10:30 am until Monday at 5 pm (details). Who’s taking a 6-day vacation on the beach island? Probably Vice-President Joe Biden, given that the flight restriction has a 3 n.m. radius (it would be 30 n.m. for the President) and that Biden’s 2008 Thanksgiving sojourn in a $4 million Nantucket house was covered by the press (example). [according to Henry Blodget, the $4 million house might not be worth as much anymore]

The taxpayers’ role in this Thanksgiving feast would have begun a couple of weeks ago with the Secret Service sweeping the island, dozens of monster SUVs being driven up from Virginia and ferried over, and perhaps a few helicopters being flown in. For Biden and his immediate family’s departure tomorrow morning, the Air Force will be putting some jet fuel into a Boeing 757’s 11,500 gallon tank.

My plans for tomorrow? Flying the Cirrus to Martha’s Vineyard for the day to see some friends, which should burn about 10 gallons of fuel for the round-trip. The challenges of the flight include possible airspace restrictions related to Biden’s arrival, ceilings down to 500′, mist, and the main runway at MVY being closed except for 15 minutes prior permission.

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When the newspapers are all gone, I will miss the political cartoons. Here are a few recent ones…

• Major Hasan
• Deciding about Afghanistan
• Goldman Sachs executives getting swine flu vaccine ahead of pregnant women

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Today I showed a group of high school kids, teachers, and parents around Hanscom Field. They are planning to build a human-powered helicopter, hoping to hover for 60 seconds, and wanted to see a conventional helicopter. We ran into a U.S. Air Force colonel. I introduced him and told the kids to feel free to ask him why we weren’t able to win any of our current wars. Then I asked if it violated any Air Force policy to be both an officer and a member of Al-Qaeda. He said “I’d have to check. Apparently it is okay in the Army.” We continued out on the ramp where I cautioned them against walking over what I call the “red line of death” that outlines the sterile area for scheduled airline flights (policy and badges remain in place despite the airline having shut down two years ago). I showed them the flight school planes that remained on the ramp in the middle of a beautiful Sunday morning (most of the fleet having dispersed with renters to Maine, the Cape and Islands, etc.). The two Cirruses were parked on the ramp; customers prefer the less expensive Piper Warrior. I told them that Angelina Jolie flies the same kind of plane. The fathers were excited, but not the students.

When we got to the Robinson R44, I showed them how the flight controls worked. They had the typical layperson’s misconception that the cyclic tilts the rotor system (the cyclic changes the blade pitch as the blades rotate around the disk, generating unequal lift, which causes the rotor system to fly itself into a new position; the helicopter hangs from the rotor system and follows). They were very interested in the engine/belts/driveshafts/transmissions. Once we had the inspection panels buttoned up we walked past the corporate jets into Signature Flight Support where they treated themselves to the free cookies and we had a question and answer session in the conference room. Not believing in my friend Dirk’s maxim that “pilots are notoriously stupid”, they asked me all kinds of questions about the best materials to use for their helicopter.

One of their ideas was to lift a transmission from an old helicopter and use it for their design. I reminded them that the Robinson transmission was designed to go 2200 hours without more than a tiny risk of failure, which meant that it was going to be hugely overengineered and therefore heavy. I reminded them of Colin Chapman’s statement that “the perfect race car falls apart as it crosses the finish line.” They needed a transmission that could run reliably for a few minutes in a hover, not one that could transfer 200 hp for 2200 hours.

The kids talked about various ideas for rotor systems and whether they should have more than one human power source. I told them that I thought the best design might be two counter-rotating rotors as seen in the Chinook (designed in 1957). With one bicyclist working each rotor they would not have the weight and complexity of a transmission. A conventional helicopter design wastes a significant amount of power driving the anti-torque tail rotor. In a Chinook-style helicopter, both rotor systems are producing useful lift.

Before and after the show-and-tell I taught a couple of helicopter instrument flying lessons in near-perfect conditions.

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The Bureau of Labor Statistics’s more inclusive U-6 unemployment rate is at about 17.5 percent (source). This does not include “discouraged” workers, so the real proportion of the expected-to-be-working population that is unemployed is probably 20 percent or more. More relevant is the number of Americans with jobs: 138 million in October 2009, down from approximately 146 million in 2007. The U.S. population, meanwhile, has grown from to 301 million to 308 million. In other words, an ever-smaller percentage of Americans are working, despite substantial growth in the number of government jobs.

Let’s assume that businesses ignore Barack Obama’s directives for them to hire more U.S. workers (see “Obama to push private sector to hire at forum”). Can the U.S. economy grow? Can U.S. businesses prosper? Current stock market investors seem to think so and have bid up the S&P 500 accordingly. Are these investors irrational?

Let’s try to find some historical examples of economic growth despite limited labor market participation. In the 1950s, our culture arbitrarily excluded a lot of people from the U.S. labor market because of sex. Many employers did not want to hire women. Many women did not want to work, especially after marriage. Pressures to exclude women from the labor market were stronger in countries such as Japan. Yet despite having a large fraction of the working-age population excluded from the labor market, both the U.S. and Japan achieved strong economic growth and investors received a healthy return (almost 17 percent real return during the 1950s in the S&P 500; source).

If these economies could grow just fine with 50 percent of the population discouraged from working, why shouldn’t the U.S. economy circa 2010 be able to grow even if the unemployment rate were to grow substantially? In fact, because our labor force now benefits from the contributions of the best educated and most skilled women, in some ways the economy should be better-poised for growth than it was in the 1950s.

How can an investor prepare for a U.S. economy in which an ever-increasing number of working-age citizens are staying home and living off parents or spouses? Perhaps it is time to buy Nintendo, cable television, Sony, broadband Internet, and Dell.

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This week’s news was full of stories about residential house construction statistics (example). I’m wondering why we should pay attention to these numbers.

Suppose that an American has a job. He or she is likely to pay for a place to live or a portion of a place to live. Suppose that an American does not have a job or pension. It is unlikely that such a person is paying rent or a mortgage. He or she is probably living with a parent, spouse, or other relative.

If we accept these premises as true, we should be able to predict the number of houses being paid for in the U.S. by looking at employment statistics. If more people have jobs, more mortgage and lease payments will be made. In looking at house construction we would start by looking at employment growth (if any), the number of houses that are so decrepit as to be unmaintainable, and the number of people moving from towns where factories have closed to towns where factories have opened.

I can understand why an architect or builder would be interested in watching these numbers, but I don’t understand why the rest of us would want to. Won’t the number of houses eventually track the number of people with jobs? If so, why not simply watch the number of jobs?

[I understand that one argument economists might make for paying attention to housing is that the government throwing subsidies at the housing market (tax credits, mortgage interest deductions, federal mortgage guarantees, etc.) will cause people to be hired in the construction trades. Those new workers will spend money, magically creating economic expansion. It seems obvious that this strategy cannot work. If more and better houses created sustainable wealth, a poor country could become rich by having 100 percent of its citizens engaged in building fancy houses for each other.]

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