Philip Greenspun’s Weblog

If you’re headed to the beach this month and looking for the most appropriate sunscreen, this New Yorker magazine article (Zev Borow, August 10) should help.

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Here’s one for my friends who know and love the Canadair Regional Jet… 47 passengers spent the night inside a 50-seat airplane (story).

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Gregory Clark, who dumped cold water on the dreams of development economists and good-hearted people worldwide with A Farewell to Alms (see my blog posting from a year ago), is back with another pail of icy salt water. This time he throws it in the face of folks who think that an economic recovery will bring jobs and prosperity to America’s lowest skilled workers. See this op-editorial in the Washington Post.

[Clark’s book is much more interesting and completely argued. In the op-ed he leaves out one of his central points, which is that modern industrial processes are less tolerant of careless or incompetent workers than older processes. In a plant where a single mistake can result in the spoiling of $1 million of material or the death of another worker, quite a few Americans would not be welcome in that factory even at a wage of 1 penny per hour. Especially given government mandates of minimum wages and health care benefits, quite a few American workers fall into the same class as horses did in the early 20th century. Even a free horse wasn’t productive enough to earn his cost of maintenance. Machines did not replace humans in the 20th century, as had been predicted by forward thinkers, but machines did replace horses. Coincidentally, the New York Times yesterday carried a story about Iraqi immigrants to the U.S. The fundamental problem seems to be that there is not a market-clearing wage at which American companies want to hire these folks and at which the Iraqis are able to sustain themselves.]

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Researchers have found that generic American parents, faced with a child who can’t do math or science, will say “Don’t worry, Johnny, because you have so many other talents.” Asian parents, supposedly, will say “Since you aren’t apparently naturally gifted at math or science you’ll have to study extra hard in these areas,” and not stop nagging until the kid is doing well.

This evening I encountered a woman talking about her kids. “They’re just not numbers people. I tell them it doesn’t matter if they can’t do math or work with numbers because we’re English and Social Studies people.”

[The mother who was speaking has an administrative job with a company contracting to the government of Massachusetts and her innumeracy has not, as far as she knows, hindered her ability to earn a living.]

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A lot of folks have been asking me about the Hudson River mid-air collision on Saturday, including some WCVB TV reporters (clip). The best information that I’ve been able to find is a New York Times graphic showing the path of the accident airplane.

Some context may be obtained by visiting http://skyvector.com/ and choosing the New York Terminal Area Chart (currently the default on the site). Most of the airspace around New York City is Class B, the most protected airspace in the U.S. In Class B airspace every aircraft must be talking to air traffic control, identified on radar, and positively separated from other aircraft. This is how we fly our sightseeing tours over downtown Boston, which falls within Logan Airport’s Class B. Due to the historically large numbers of sightseeing airplanes and helicopters zipping up and down the Hudson River, the FAA decades ago carved out a “VFR corridor” to allow aircraft flying over the river at or below 1100′ above sea level to fly without talking to a controller. In fact, an airplane could fly through the corridor without being equipped with a radio.

The FAA does not explain how pilots should use the corridor. Common sense and convention suggests the following:

• keep to the right
• fly low (700′ or below) if you’re a helicopter and not subject to the “at least 500′ above any vessel, person, or structure” rule
• fly high-ish (900′ to 1100′) if you’re an airplane
• tune your radio to the published common traffic advisory frequency (CTAF) and periodically broadcast position reports

Teterboro Airport is more or less abeam mid-town Manhattan. An airplane departing Teterboro could enter the corridor almost anywhere. Whenever I have done it, however, it has made sense to me to first head north over the land and still within Teterboro’s controlled airspace. I enter the corridor at the George Washington Bridge. The tour helicopters generally don’t come that far north. I switch to CTAF and say “Hudson River Traffic, Cirrus Seven Whiskey Tango at the George Washington Bridge southbound 900”. The next call is abeam Central Park. Even at 110 knots I have a couple of minutes in which to let the downtown mob know that I’m coming and to listen for airplanes and helicopters farther downtown.

With this accident, it appears that the helicopter may have climbed higher than typical, perhaps close to the 1100′ ceiling of the corridor. More problematic was the airplane pilot’s decision to enter the busy corridor on a busy weekend day at its busiest spot, more or less abeam the W. 30th St. heliport. He would have been required to be talking to Teterboro or Newark Tower until the very moment that he was over the river (though there is some suggestion in today’s New York Times that he was handed off from TEB to EWR and did not check in with Newark). He thus denied himself the chance to spend a minute or two broadcasting his progress down the river and listening for the helicopter who would surely have reported lifting from W. 30th. Had the airplane pilot spent an additional four minutes of flight time (two minutes north to the G.W. Bridge and then two minutes south down the river) the accident probably could have been avoided. This is not to criticize the pilot. The Teterboro controllers are not famous for being friendly or flexible. It is possible that the airplane pilot asked to fly north first and was denied due to traffic (TEB is one of the nation’s busiest airports).

Should anything be done? It might be helpful if the FAA published an official guide to using the Hudson River corridor codifying the rules listed above and adding one new rule: airplanes should enter the corridor at the G.W. Bridge or farther north and/or from the Verrazano Bridge or farther south. Controllers at nearby airports should be trained to encourage pilots to follow those entry procedures. Except for seaplanes or helicopters lifting from the river itself, nobody should join the party right in the middle (a seaplane or helicopter taking off from inside the corridor would likely have been monitoring the CTAF for at least a couple of minutes).

About a month ago, I had to go to Washington, D.C. to be deposed as a software expert witness (albeit not as an aviation expert witness). As the weather was fairly nice, I elected to fly a Cirrus SR20 down there and stopped at Teterboro for lunch with a cousin. I brought my nephew along for the trip and decided to show him New York City from the Hudson corridor. It was the middle of the week rather than a weekend day. We flew north to the G.W. Bridge prior to entering the corridor. We stayed at 900′ and never got close to any other aircraft as far as I know.

More: an interview with me on local TV

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It would be nice if modesty prevented me from pointing folks to this Fox TV news story in which I’m on camera flying a sightseeing tour around Boston.

Sadly this story ran on the same day as an airplane-helicopter collision in New York City. The circumstances here in Boston are very different. The Logan Airport control tower owns all of the airspace over downtown Boston, right down to the surface. There is no equivalent of the Hudson River VFR corridor in which pilots are responsible for seeing and avoiding other aircraft. We fly the tours with the assistance of Hanscom Tower and then Boston Tower, both of which watch for conflicting traffic on their radar screens.

[So far I’m surprised by the circumstances of the New York crash. I’ve flown both helicopters and airplanes in that corridor many times and can’t remember hearing a sightseeing helicopter report being higher than 700′ above sea level while on its standard tour of the river and “the Lady”. Airplanes typically fly 900-1100′ above sea level and keep to the right while traveling down the river. The accident is being reported by the New York Times to have occurred at approximately 1100′, a normal altitude for the airplane but seemingly higher than normal for a helicopter tour.]

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Today’s New York Times has an interesting graphic on private sector employment growth in the U.S.

The overall picture shows that we have about the same number of private sector jobs that we had in 1999 (0.01% annual growth rate over 10 years). If there are more Americans working they are working for the government. (Population growth rate of 1 percent per year combined with current government spending of about 37 percent of GDP means that the government will have to expand about 3 percent every year in order to provide jobs for new Americans, unless somehow a way can be found to encourage private enterprise (see my economic recovery plan for a personal theory).)

The decline in manufacturing is an old story, though the 3.7 percent annual rate is an alarmingly fast grind-down. The declines in air transportation, hotels, and retail are surprising. It certainly does not feel as though we have fewer airline flights, hotels, or stores.

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Back in 2003, I asked whether it made sense “to make corporate managers as rich as Rockefellers” (original post). I pointed out that paying a CEO or other top executive enough to own multiple houses or become a philanthropist was probably counterproductive for the shareholders. A rich person tends to be busy with his or her possessions and distracted from work.

Just this week I noticed a 2007 study by Liu and Yermack, a couple of business school professors. They figured out where nearly all of the CEOs of the S&P 500 lived, when those houses were purchased, how much they cost, and whether the CEO sold stock to help pay for the house. The paper is detailed but the conclusion is that the guys who bought fancy houses presided over companies whose stock significantly underperformed the S&P 500 index.

More: download the paper free from this site.

[Quaint reminder: in the 2003 posting, I referred to the U.S. economy as “moribund”. Little did I know!]

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I’m wondering if Cash for Clunkers will be remembered as a turning point for the American people. We already spent roughly $100 billion of taxpayer money on the obsolete technology of 3500 lb. cars made by uncompetitive companies, happily ignorant of the fact that the world will be driving cars more like the Tata Nano (March 27 post; March 23 post). Could we really have spent enough money to fund 5000 Googles on GM and Chrysler? Yes, but the sum is so vast that human minds can’t contemplate the scale of the spending.

Cash for Clunkers has the following elements of spectacle:

• Americans destroying perfectly functional cars
• Americans whose skills are uncompetitive in the global marketplace driving around in fancy new cars

Somewhere in China and India they must be having a good laugh.

The deeper issues are more troubling. Cash for Clunkers only makes sense if we believe that our #1 problem is that we don’t drive sufficiently fancy cars.

Will the program save energy? Let’s leave aside the obvious waste of destroying a working car here, building a new one in Korea, and shipping it across the Pacific. Consider that a person who has a car worth $4500 has a limited budget for gasoline. If you give him a car that uses half as much gas per mile driven, he may simply drive twice as many miles. One of America’s acknowledged #1 problems is urban traffic congestion. We’ve come up with a program to make it a lot worse. A guy who would have carpooled to save on gas, ridden the bus, bicycled, or found a way to avoid the trip is now clogging the highways in his new Toyota.

Will the program help less fortunate Americans? Consider a guy who has been foreclosed out of his unaffordable mortgage. He has a cheap apartment and a paid-for car that isn’t pretty but gets him to work. If he loses his job he can move in with his mom and not worry about debt. After Cash for Clunkers, the same guy has a new car that cost 10X as much as a Tata Nano and a consequently crushing car loan obligation through 2014.

What else could we have done with the money? 37 percent of Americans don’t have broadband Internet at home (source). If we spent the Cash for Clunkers money on Let’s Try to Catch up with Korea (95 percent of households with broadband, typically much faster than ours (one source)) a lot of Americans might not have needed to make so many trips in their cars because (1) they could work from home, (2) they could shop from home, (3) they could get information from home, (4) they could find out, from home, that some place they were planning to go was in fact closed.

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We tend to think of America as an economically free country (#6 rank in one study), but with the proposed health care reform going through Congress it is remarkable how many laws an employer can break by employing his or her fellow Americans.

Suppose that you set up a company and hire 10 childhood friends. You don’t want to skim anything from their paychecks, and your wife has a fat government job, so you decide not to take anything out for yourself. Out of the goodness of your heart you’re going to pay for the office space and do the administrative legwork. When a customer pays, you’ll divide up the check into 10 portions and distribute it immediately to your employees. The employees are getting the absolute maximum long-term pay that they could under this arrangement, taking home 100 percent of the revenue from customers.

What laws are you breaking? At least the following:

1. you’re not paying for unemployment insurance
2. you’re not withholding federal income tax
3. you’re not withholding state income tax
4. you’re not paying worker’s compensation insurance
5. you’re not paying the employer’s share of Social Security and Medicare taxes
6. you’re paying people with a 1099 instead of a W2
7. though you went to elementary school with these folks, know their mothers, and know for a fact that they were born in the U.S., you didn’t verify to the government’s satisfaction that they were U.S. citizens
8. (the new one) you’re not arranging health insurance for your 10 friends

One would naively think that an employer who hands over 100 percent of revenue to employees was a kind and generous person, but it turns out that he or she is breaking more laws than a drug dealer.

[You might argue that it is possible for workers to obtain more than 100 percent of customer revenue, minus any materials costs. Government workers get paid without regard to revenue, productivity, achievement, etc. Some workers on Wall Street and at Detroit automakers obtained more than 100 percent of gross profits because they were able to supplement their compensation with tens of billions of taxpayer dollars. However, the average private sector workforce is limited by revenue from customers.]

[I had to delete a lot of comments from people who assumed that if the employer was not withholding income taxes that no income taxes were being paid. In this case, of course, the employees would pay their own income taxes on Schedule C of the Form 1040 (self-employment income). The 1099 filed by the employer would force the employees to report at least that much income on their Schedule C.]

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