The Feds Just Bet Even Bigger on American-Made Heat Pumps
wired.com
wired.com
Mark my words, this planned economy stuff is going to come back and bite us...
"Protectionism" is a pejorative term used by people who forget the complexity of building at scale, and the cost of losing this capability. Helplessness as a nation state is not a flattering look on the global stage.
[1] https://en.wikipedia.org/wiki/Carrier_Air_Conditioner_move_t...
> A company representative announced the information to an assembly of workers. He said, “The best way to stay competitive and protect the business for long-term is to move production from our facility in Indianapolis to Monterrey, Mexico.”
[2] https://news.ycombinator.com/item?id=39408712 ("HN: Employee Turnover Fueled Boeing's Quality Control Nightmare")
Seriously, the faulty airplanes were all built in the US by a company with some of the closest government ties in our economy. It is indeed an example of what fruits use of the defense production act might bear.
Are all these companies "victims" of "planned economy"? Do you have any evidence that they are experiencing the same multitude and severity of issues as Boeing?
> It is indeed an example of what fruits use of the defense production act might bear.
What fruits are those, exactly? Are these fruits worse or better than an already bloated military-industrial complex? Please, elaborate.
https://news.ycombinator.com/item?id=38981921 ("HN: It's Time to Nationalize and Then Break Up Boeing")
I'd say it's because Boeing is a creature well-adapted to its environment - an environment created by protectionism and defense production contracts.
https://www.reuters.com/legal/us-supreme-court-rejects-inves...
https://news.bloomberglaw.com/litigation/government-sheds-la...
Edit: Book value is reasonable compensation to nationalize. "Closer to $0", not $0.
There is a lot of residual value in the physical plant of the enterprise--the real estate it owns, the machines it owns, the resources it has in inventory. Actually, there's a name for this value: book value.
The inability to establish bipartisanship in Congress to make congressional sessions more productive and not bogged down along party lines as they are today, more often than not (and increasingly so), leaves the administration with little levers to pull.
Given that, we've seen presidents since Reagan use some wonky legal logic to move money around that is very much intended (in the spirit of) something, but used for something else entirely.
Very often the places you have the most flexibility for this is defense, because you have the easiest time making a legal case for it if its ever challenged.
If we didn't have a dysfunctional congress, which is definitely an extension of dysfunctional politics in the US, they could use the correct levers to create subsidies for this via congressional allocation, but as it sits today, you'd never get a bill through congress.
Perhaps the more dangerous outcome for as long as the budgets remain small is the government playing favorites. "You better donate to the right party and hire the right retiring regulators, or the government won't start a defense production program for your industry." Now that companies have an incentive to bend the administration's picture of what products will help the climate you can guess what will happen. Once the relationships are built up the effects will extend beyond individual programs.
Also, the defense industry is one of the least efficient and most lobbyist-driven/build-fifty-parts-in-fifty-states/friends-with-the-colonel institutions in our system. We begrudgingly accept it because, what's the alternative? - but if you wish that on the rest of the economy you must want the terrorists to win. ;-)
As long as VC is lighting money on fire on obviously stupid ventures like Juciero and subsidizing Uber/Lyft rides to far below cost for a decade, NFTs, and transparent frauds like FTX, it's hard to get worked up about government deciding to make sure our basic national security needs are covered.
VC has not proven themselves to be paragons of free private market efficiency for the past decade.
The difference is that I'm not forced to fund those idiots.
Now I'm not debating the merits here, simply stating that the speculation VCs engaged in was in large part due to the "cheapness" of money, which is directly the result of monetary policy since 2008 or so.
This drives things like safe returns vs riskier returns, which can in turn fuel bubbles since safe returns[0] can't pace inflation, the money goes elsewhere, into riskier things over time, creating bubbles and over-investment as people chase better returns. This makes it more expensive over time to do things, like holding safe investments vs riskier ones, because your future value is eroded.
This also translates into other societal issues, and while it may not always be the main cause it will exacerbate existing problems, particularly in markets where financing is prevalent, like housing.
[0]: Such as Certificates Of Deposit, which are all the rage again now that interest rates are higher than have been in ~15 years
I agree there is a risk of favoritism. Still, I think the consumer benefit is worth the risk. Ideally in my view, the government can set some base standards like they do with EV batteries and tax credits. And over time they can raise the bar on requirements, on efficiency and reliability and install cost requirements.
Third, the money is coming from the Defense Spending Act, but it's not like companies have to be paid up gold star members of the defense industry consortium to play here. Defense Production Act. I think the GAO has a pretty good review of what happened with emergency Defense Production Act spending under COVID, and it doesn't give me fear at all that this is some crazy Military Industrial Congressional Complex boondogle. It makes me feel like mostly this stuff works fine & is well done, and agencies are tuning things responsibly. https://www.gao.gov/assets/gao-22-105380.pdf
This is $63m spending. Being afraid of this level of spending feels absurd to me. I cannot imagine being against some basic government investment in trying to do better in a key sector like this. I have faith we'll find and do great things with some of this money, and set a path that will keep yielding improvements in American's lives. I wish we weren't all so afraid of this shit.
I hope we don't see that play out again with heat pumps. That said, I'm glad there is funding for the design of heat pumps in north american markets. Existing heat pump designs don't really work for continental climate severe cold.
I don't know what bulbs you're using but I don't find this to be the case.
As an alternative example, the effect of subsidies on the solar panel industry has led to rapid improvements in cost and efficiency.
It's another situation where the well off remain well off but for the poor the situation gets worse.
Big Clive of YouTube fame has shown many times over that modest changes to the driver board of commercial LED lights will allow them to last indefinitely. You have to wonder if the manufacturers don't know this.
Maybe I'm buying cheap bulbs but the latest ones I've bought have been very reasonably priced and most definitely are lasting longer than incandescent / halogen. I recently replaced some that had been operating for at least 8 years and likely longer.
They sort of seamlessly morphed from that to arguing about how its economic rise can be arrested by slapping tariffs, etc. on them.
Can you think of another example of a country that did better by following the standard neoliberal washington consensus advice from the 70s/80s/90s?
Chile and Russia are two examples that I can think of that followed western proscriptions at one point (70s/80s and 90s) but it didn't exactly work out well for either of them.
It really is wild looking at predictions about what would happen in the 1990s and comparing it to what did actually happen.
It's even wilder seeing people repeat similar predictions and forgetting when theyve been made before.
They're not "perfect" (e.g. they don't work at <0F temperatures without truly absurdly large heat-exchange components that aren't worth the capital expense). I also know a lot of people would like the option to use natural gas, but I'd like to think that with this type of additional investment and focus, some future heat pumps could use natural gas as their "backup resistive heating" instead of electric.
Also surprised by the lack of solar water heating in the US. My childhood home had a system but when it broke we could not find anyone that could fix the system and had to remove it.
Figured you'd want to know, since I found it interesting!
That being said, the dryer fires are certainly preventable and if any technology aids in reducing that, it's well worth it!
I think, in most of the USA, a natural gas water heater would have made a similar dent in your overall utility bill. But I still am very glad we're working harder towards good heat pumps.
Compared to resistive heat, sure, but a heat pump powered by fossil fuels isn't much better than a gas furnace. My point is that we need to stop burning fossil fuels for electricity so that heat pumps make sense.
https://en.wikipedia.org/wiki/Coefficient_of_performance
Technically, heat pumps can absolutely achieve greater than 100% efficiency (considering their input electricity as a starting point).
It's also true though that there are also lot of caveats about their effectiveness based on temperature differential, maximum output compared to a furnace, efficiency with which the upstream electricity is generated, etc.
I was considering fossil fuels as a starting point, as that's where most of our electricity comes from.