Side Streets, Downtown Streets, Highways, Parkways and Freeways

Posted by PITHOCRATES - July 31st, 2013

Technology 101

In 20th Century our Subdivision Planners shifted from Automobile-Friendly to People-Friendly Designs

The automobile changed how we live.  Where once we crowded into crowded cites and worked close to where we lived today we don’t.  Instead choosing to live in sleepy suburbs.  Away from the noise and congestion of city life.  Where we can relax after work.  And on the weekend.  Enjoying a beer in the shade in our backyard.  Our little Shangri-La.  Come Monday morning, though, it’s back to the grind.  So we back our car out of the garage.  And drive out of our little residential community.

If you live in an older suburb that would be a drive down a straight road.  Running either north and south.  Or east and west.  Bringing you efficiently to a larger road.  That you can efficiently take to a larger road yet.  With a higher speed limit.  With many of us eventually taking that road to an onramp of an interstate freeway.  For that morning commute.  Quick.  And efficiently.  Thanks to our city and suburb planners making our cities and suburbs so automobile-friendly.

Soon everyone was driving so much that these roads got congested.  Including the ones in our sleepy little subdivisions.  With people racing down our side streets to get to those bigger roads.  Filling our little Shangri-La with the sounds of traffic.  And making it unsafe for our kids to ride their bicycles in the street.  Which is why somewhere around the middle of the 20th century our subdivision planners shifted from automobile-friendly to people-friendly.  Instead of grids of straight lines crossing other straight lines at neat right angles our roads in our subdivisions began to curve.  If you ever tried to cut through a subdivision and got so turned around that you ended up where you entered this is why.  To discourage people from driving through our sleepy little streets.  So we can relax with that beer in the shade.  And our kids can ride their bicycles safely in the streets in front of our homes.

Design Speed is the First Consideration when Designing a New Road

Cars are big and heavy.  Trucks are even bigger and heavier.  Yet millions of them safely share the same roads every day.  And few in a small car look twice at a semi truck and trailer stopped next to them at a traffic light.  Or give a second thought to an even bigger and heavier freight train crossing the road ahead of them while they sit at a railroad crossing.  All because of lines painted on the road.  Speed limit signs keeping us driving at the same speed.  And stop signs and traffic lights.  Which people observe.  And give the right-of-way to others.  While they wait their turn to proceed.  Except for trains.  They always have the right-of-way.  Because trains can’t stop as easily as a car or a truck.  And they pay a lot of money for that right-of-way.

As we left our neighborhoods and got onto the bigger roads and drove to the interstate freeway the speed limit got higher and higher.  And the faster large things go the more kinetic energy they build up.  Making it harder to stop.  And to control.  That’s why trains don’t stop for cars.  Cars stop for trains.  Emergency vehicles, like fire trucks and ambulances, get the right-of-way, too.  When we see their lights flashing and/or hear their sirens we pull to the curb and stop.  Because they’re speeding to an emergency and need a clear road.  But also because they are often traveling faster than the design speed of the road.

Yes, design speed.  Not the speed limit.  Two completely different things.  It’s the first consideration when designing a new road.  How fast will traffic travel?  Because everything follows from that.  Curves, grades, visibility, etc., these are all things that vary with speed.  Engineers will design a downtown street with a lot of vehicular and pedestrian traffic for lower speeds than they’ll design a country highway that connects two towns.  Also, lane width in a downtown street can be as narrow as 9 feet.  And they can have sidewalks adjacent to the curbs.  Allowing narrower streets for pedestrians to cross.  Freeways, on the other hand, have lanes that are 12 feet wide.  And have wide shoulders.  Because faster vehicles need more separation.  As they tend to waver across their lanes.  So this is another reason why we pull aside for emergency vehicles.  As they may approach or exceed the design speed of a road.  So we give them wider lanes by pulling over.  As well as giving them a less obstructive view of the road ahead.

The Modern Interstate Freeway System is Basically an Improved Parkway

Old 2-lane country highways had narrow lanes and narrow shoulders.  Making it easy to drift across the center line if distracted.  Or tired.  Into oncoming traffic.  If a person hugs the shoulder because he or she is nervous about fast-moving oncoming traffic they could drift over to the right.  Out of their lane.  And drop off of the shoulder.  Which could result in a loss of control.  Even a rollover accident.  And if you were stuck behind a slow-moving truck on a grade there was only one way around it.  Moving over into the lane of oncoming traffic.  And speeding up to get ahead of the truck before a car crashes head-on into you.  In fact, there used to be a passing lane.  A 3-lane highway with one lane traveling one direction.  One lane traveling in the other direction.  And a lane in the middle for passing.  Which worked well when only one person passed at a time.  But did not work so well when cars from each lane moved into the passing lane at the same time.  Running head-on into each other.  That’s why you won’t see a passing lane these days.  They are just too dangerous.

In the 20th century we started making roads for higher speeds.  Parkways.  The traffic travelling in either direction was separated by a median.  So you couldn’t drift into oncoming traffic.  There were no intersections.  Crossroads went over or under these parkways.  So traffic on the parkways didn’t have to stop.  They also had limited access.  On ramps and off ramps brought cars on and off, merging them into/out of moving traffic.  And unlike the old 2-lane country roads there were 2 lanes of traffic in each direction.  So if you wanted to pass someone you didn’t have to drive into oncoming traffic to go around a slower-moving vehicle.  And there was a paved shoulder.  So if a car had a flat tire they could limp onto the shoulder to change their tire.  Without interrupting the traffic on the parkway.  Of course, being on the shoulder of a parkway was not the safest place to be.  Especially if some distracted driver drifted onto the shoulder.  And crashed into your broken down car.

The modern interstate freeway system is basically an improved parkway.  They have wider lanes and wider shoulders.  Along the median and the outside right lane.  Instead of the typical Windsor Arch of the parkway they have bridges of concrete and steel.  Allowing greater spans over the roadway.  Keeping those shoulders wide even under the overpasses.  Grades are less steep.  And curves are less sharp.  Allowing little steering inputs at high speeds to control your vehicle.  Making for safer travel at even higher speeds.  And a much greater field of vision.  Even at night where there are no streetlights.  The road won’t change grade or curve so great beyond the length of your headlights.  Safely allowing a high speed even when you can’t see what’s up ahead.  Little things that you’ve probably never noticed.  But if you exit the interstate onto a curvy 2-lane highway with steep grades you will notice that you can’t drive at the same speed.  Especially at night.  In fact, you may drive well below the posted speed limit.  Because you can’t see the summit of the next hill.  Or the curve that takes you away from a sharp drop-off to a ravine below.  Like you find around ski resorts in the mountains.  The kind of highways you can’t wait to get off of and onto the safer interstate freeway system.  Especially in a driving snow storm.

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The UAW and Public Sector Unions devastate Three Michigan Cities

Posted by PITHOCRATES - February 24th, 2013

Week in Review

It’s not been a good year for Detroit.  Well, it’s been more than a year.  It’s been a few bad years.  Actually, it’s been a great many bad years.  Since 1970.  When Ford Motor Company Chairman Henry Ford II joined with other business leaders to form Detroit Renaissance.  To revitalize the City of Detroit.  And some 42 years later, the City of Detroit is still struggling (see Detroit’s Misery Can Be Its Turning Point by Micheline Maynard posted 2/23/2013 on Forbes).

Detroit boosters were dealt a one-two blow this week by the kind of outsiders they have come to resent.

First, a state review panel declared that a financial emergency existed in the city, making it likely that Michigan Gov. Rick Snyder will appoint an emergency financial manager with sweeping powers.

Then, Forbes weighed in by declaring Detroit the nation’s most miserable city, based on a series of criteria that include crime, unemployment, foreclosures and home value…

Although General Motors is based in Detroit, and Chrysler recently opened an office there, the automobile industry is not going to provide the vast numbers of jobs the city needs to become solvent.

And there lies the problem for Detroit.  A city that grew big and rich off of the automobile industry saw a steady exodus and a declining tax base when the automobile industry declined.  Live by the automobile.  Die by the automobile.  And it’s just not Detroit.  A couple of other Michigan cities broke into the top 10 of Forbes’ America’s Most Miserable Cities 2013.

#7 Warren, Mich.

Troy and Farmington Hills are part of the government-defined Warren metro division. Like Detroit, the Warren metro has seen home prices collapse–off 53% the past five years.

#2 Flint, Mich.

Flint has been demolishing homes as the city shrinks with residents leaving in search of jobs. Only Detroit has a higher net out-migration rate. Flint ranks third worst for violent crime, behind Detroit and Memphis.

#1 Detroit, Mich.

Violent crime in the Detroit metro was down 5% in 2011, but it remains the highest in the country with 1,052 violent crimes per 100,000 people, according to the FBI. Home prices were off 35% the past 3 years, which is the biggest drop in the U.S.

If you seek a pleasant peninsula* you’d do better looking for one where the UAW isn’t dominant.  Perhaps Florida.  For the UAW is a city killer based on these Michigan cities.  (*The official state motto of Michigan is “If you seek a pleasant peninsula, look about you.”)

The Big Three dominated these cities.  Where fat pay and benefit packages were passed on to consumers in overpriced vehicles.  The Big Three’s monopoly on car sales allowed them to make fat profits.  And pay enormous amounts of taxes to the cities that had the factories that assembled their cars.  City coffers were so flush with cash city governments grew.  And city workers enjoyed fat pay and benefit packages.  This was the high water mark of the UAW.  Just after public sector unions had joined them on the gravy train.  But then something happened that devastated the UAW.  Consumers got choice.  They no longer had to buy overpriced ‘rust buckets’ the Big Three was putting out during the Seventies.  For the Japanese gave them choice.

And so began the great decline of the Big Three.  Quality and value did them in.  It’s what the people wanted.  While the UAW wanted consumers to pay more and get less.  So they could continue to enjoy their fat pay and benefit packages.  As the jobs went away so do did the taxes.  The cities bloated with all those government workers with their fat pay and benefit packages tried to maintain the size of their governments even while the tax base was declining.  Reducing other government services as they had little money left over after paying those fat pay and benefit packages.

With fewer and fewer jobs available people left these cities.  Empty houses dotted the horizon.  And housing prices fell.  With the tax base continuing to decline.  Poverty rates rose.  As did city services for the impoverished.  Leaving even less for other city services.  Causing a further exodus from the city.  Urban blight followed.  As did crime.  Causing a further decline in property values.

Low interest rates helped boost housing prices.  For awhile.  President Clinton’s Policy Statement on Discrimination in Lending kicked off subprime lending in earnest as lenders bowed to the Clinton Justice Department to put more low-income and minorities into homes they couldn’t afford.  Creating a huge housing bubble.  Built on easy credit.  Artificially low interest rates.  And the adjustable rate mortgage (ARM).  When rates went up all those low-income and minorities who bought houses they couldn’t afford defaulted on their higher mortgage payments.  Creating the subprime mortgage crisis.  Giving us the Great Recession.  Creating a flood of foreclosures.  A free fall in housing prices.  And more of the same that helped put those three Michigan cities into the top ten of Forbes’ America’s Most Miserable Cities 2013.

Michigan recently opted to become a Right-to-Work state.  Greatly angering the UAW and those public sector unions.  But it may be just what Michigan needs to reverse the great decline caused by the UAW and the public sector unions that devastated some of Michigan’s greatest cities.  One thing for sure it can’t get any worse.  Not when being a union state for so long secured three places in the top ten of Forbes’ America’s Most Miserable Cities 2013.

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Rolls Royce, Cadillac, Moving Assembly Line, Economies of Scale, VCR, Cell Phones and HD Plasma Television

Posted by PITHOCRATES - January 1st, 2013

History 101

The Moving Assembly Line allows GM to Divide their Costs over more Units than Rolls Royce

Rolls Royce automobiles are very expensive luxury cars.  Of impeccable quality.  It may be the finest automobile ever built.  And I say built not manufactured.  For they build a Rolls Royce by hand to ensure that high quality.  By some of the most experienced and skilled artisans to ever hone metal, wood and leather into an automobile.  Because of this they can’t make a lot of them a year.  They set a record sales total in 2011.  By selling 3,538 hand-crafted automobiles.  The entry price for a Rolls Royce?  Around $250,000.

By contrast GM sold 152,389 Cadillac luxury automobiles in 2011 in North America.  These are not hand-crafted.  The Americans build them on moving assembly lines.  Which is why they can build 43 times as many Cadillacs than they can hand-build Rolls Royces.  The entry price for a Cadillac?  About $33,100.  While a top of the line may cost you around $63,200.  Now Cadillacs are nice.  The name has become synonymous with high quality.  The best quality is the ‘Cadillac’ of something.  The quality may not be Rolls Royce quality but few will complain about that quality when sitting behind the wheel of a Cadillac.  They are glad to settle for a Cadillac over a Rolls Royce.  Especially when it costs 7.5 times as much to get into a Rolls Royce than into a Cadillac.

Why are hand-crafted Rolls Royce automobiles so much more costly than Cadillacs manufactured on a moving assembly line?  Economies of scale.  The higher production levels of the mass-produced cars allows GM to divide all of their costs over many more units.  Bringing the unit cost down.  And the selling price.  With fewer sales the unit cost for Rolls Royce is much higher.  As is the selling price.

As Demand grew Manufacturers were able to Bring Prices Down thanks to Economies of Scale

Rolls Royce pays a price for their commitment to quality.  They can’t sell cars as inexpensively as some of their luxury rivals.  But that’s okay for them.  As the market for hand-crafted luxury cars is large enough to keep them in business doing what they love.  Building the finest quality automobile in the world.  And those who want the best can afford to pay a quarter of a million dollars for an entry-level Rolls Royce.  So they do.  Which is why Rolls Royce doesn’t have to worry about economies of scales to compete against their competition.

Before Henry Ford built the moving assembly line cars were too expensive for the working man.  Henry Ford changed that.  Once they started manufacturing the new driving machine on the moving assembly line Ford was able to reach an economy of scale that greatly increased production rates.  Bringing down the unit cost.  And the selling price.  As new products entered the market place they were typically unaffordable to all but the rich.  But then as demand grew manufacturers were able to bring prices down thanks to economies of scale.  Like Henry Ford did with the automobile.

The first commercially viable video tape recorder was the Ampex model VR-1000 in 1956.  It cost $50,000 (about $421,000 today).  It was the size of a kitchen stove.  And about the only place you found them were in television broadcast studios.  From this early beginning came the technology for the video cassette recorder (VCR).  By the mid to late Seventies schools had one they rolled from room to room.  It cost approximately $5,000 (about $19,400 today).  About a decade later you could buy a smaller unit that could do more for around $2,000 (about $4,000 today).  Just before the DVD player and the digital video recorder made them obsolete you could get a nice one for about $100.  They were so small and so inexpensive that you bought one for every television in the house.

Bringing these Prices Down are State-of-the-Art High-Tech Manufacturers throughout Asia

When the first cell phones came out we called them car phones.  Because they were so big and had no real battery life that they were permanently installed in a car.  Connected to the electrical system of the car.  The first real portable cell phone was something that looked like a brick and weighed in around 2 pounds.  The battery gave you maybe an hour of talk time.  And it cost $3,995 in 1982 (about $9,600 today).  By 1993 the price was down to $900 ($1,400 today) but still weighed in at 2 pounds.  By 1996 the weight dropped to about 3 ounces.  It cost about $1,000 ($1,400 today).  By 2002 you could buy a flip-phone with a built-in high resolution camera for $400 (about $510 today).  And so on until they got smaller and more powerful with longer battery lives.  Today you can often get a pretty nice phone free when you sign a contract for service.

Things people like and demand can accelerate this process of quality improvement and lower prices.  For half a century the television has been a fixture in most American homes.  So technology buffs with money were always ready to spend a lot of money on the next best thing.  And when high-definition plasma televisions hit the market it didn’t take long for economies of scale to bring prices down as demand exploded for these beautiful things.  A Panasonic 42″ high-definition plasma television cost around $2,500 in 2004 (about $3,000 today).  About 4 years later you could get a slightly better set for about $700 (about $750 today).  Today you can buy an even better 42 inch plasma set from Panasonic for as little as $400.

Bringing these prices down are state-of-the-art high-tech manufacturers throughout Asia (Japan, South Korea, etc.).  They can mass produce cell phones and televisions and other high-tech goods at remarkable production rates.  Filling ships with their goods to export around the world.  They bring together high-skilled labor and the best in automated production equipment.  They can retool and begin new production so fast that they can fill the demand for the next big thing without missing a step.  And quickly ramp up to an economy of scale wherever they see growing consumer demand.  Bringing down unit costs.  And prices.  Making a lot of happy consumers around the world.

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Internal Combustion Engine, Electric Motor, Fuel Economy, Emissions, Electric Range, Parallel Hybrid, Series Hybrid and Plug-In

Posted by PITHOCRATES - September 5th, 2012

Technology 101

We started the First Cars with a Hand Crank and Nearly Broke an Arm if the Hand Crank Kicked Back

The king of car engines is the internal combustion engine (ICE).  We tried other motors such as a steam engine.  But a steam engine is a heat engine.  Meaning it first has to get hot enough to boil water into steam.  Which meant any trip in a car took a little extra time to bring the boiler up to operating temperatures.  Boilers tend to be big and heavy.  And dangerous.  Should something happen and a dangerous level of steam pressure built up they could explode.  Despite those drawbacks, though, a steam engine-powered car took you places.  And as long as there was fuel for the firebox and water for the boiler you could keep driving.

Another engine we tried was the electric motor.  These didn’t have any of the drawbacks of a steam engine.  You didn’t have to wait for a boiler to get to operating temperatures before driving.  Nothing was in danger of exploding.  An electric motor was lighter than a cast-iron boiler.  And an electric motor could make a car zip along.  However, an electric motor requires continuous electricity to operate.  Provided by charged batteries.  Which didn’t last long.  And took hours to recharge.  Giving the electric car limited range.  And little convenience.  For the heavier it was and/or the faster you went the faster you drained those batteries.  Which could be a problem taking the family on vacation.  But they worked well in a forklift on a loading dock.  Because of the battery-power they produced no emissions so they’re safe to use indoors.  They had limited auxiliary systems to run (other than a horn and maybe a light).  And when they were running low on charge you rarely needed to drive more than 20 or 30 feet to a charging station.

The first ICE-powered cars took some manly strength to operate.  They didn’t have power brakes, power steering, automatic transmissions or starters.  We started the first ICE-powered cars with a hand crank.  That took a lot of strength to turn.  And if it backfired while starting the kick of the handle could easily break a wrist or an arm.  Putting a damper on any Sunday afternoon drive.  This limited the spread of the automobile.  They were complex machines that required some strength to operate.  And they could be very dangerous.  Then along came the electric starter.  Which was an electric motor that spun the ICE to life.  Making the car much safer to start.  Expanding the popularity of the automobile.  For there was no longer a good chance that you could break your arm trying to start it.  And through the years came all those accessories making it easier and more comfortable to drive.  Today automatic transmissions, power steering, power brakes, headlights, interior lights, power locks, power windows, powered seats, a fairly decent audio system, heat, air conditioning and more are standard on most cars.  All effortless powered by that internal combustion engine.

Current Battery Technology does not give the All-Electric Car a Great Range

The reason why an ICE can do all of this is because gasoline is a very concentrated energy source.  It doesn’t take a lot of it to go a long way.  And it can accelerate you up a hill.  It even has the energy to pass someone on a hill. It’s a fuel source we can take with us.  A small amount of it stores conveniently and safely in a gas tank slung underneath a car.  And when it’s empty it takes very little time to refill.  A ten minute stop at a gas station and you’re back on the road able to drive another 500 miles or so.  Even in the dark of night with headlights blazing.  While keeping toasty warm in the winter.  Or comfortably cool in the summer.  Things an electric battery just can’t do.  So why would we even want to trade one for the other?  In a word—emissions.

The internal combustion engine pollutes.  The more fuel a car burns the more it pollutes.  So to cut pollution you try to make cars burn less fuel.  You increase the fuel economy.  And you can do that in a couple of ways.  You can cut the weight of the vehicle.  And put in a smaller engine.  Because a smaller engine can power a lighter car.  But a smaller car carries fewer people comfortably.  And can carry less stuff.  A motor cycle gets very good fuel economy but you can’t take the family on a Sunday drive on one.  And you can’t pack up your things on a motorcycle when going off to college.  So the tradeoff between fuel economy and weight has consequences.

An electric car does not pollute.  At all.  (Though the power plant that charges its batteries does pollute.  A lot.)  But current battery technology does not give the all-electric car a great range.  Typically coming in at less than 75 miles per charge.  Which is great if you’re operating a forklift on a loading dock.  But it’s pretty bad if you’re actually driving on a road going someplace.  And hope to return.  The heavier the car is the shorter that driving range.  If you want to use your headlights, heater or air conditioner it’ll be shorter still.  On top of this short range recharging your battery isn’t like stopping at the gas station for 10 minutes.  No.  What one typically does is pray that he or she gets home.  Then plugs in.  And by morning the car would be fully charge for another 75 miles or so of driving.

To Maximize the Benefit of a Hybrid you’d want to Carry the Absolute Minimum of Batteries to Serve your Needs

So all-electric cars are clean but they won’t really take us places.  The ICE-powered car will take us places but it’s not really clean.  Enter the gas/electric hybrid.  Which combines the best of the all-electric car (clean) and the best of the ICE-powered car (range).  There are a few varieties.  The parallel hybrid has both an ICE and an electric motor connected to a transmission that powers the wheels.  The ICE also drives a small generator.  Batteries power the electric motor.  And a gas tank feeds the ICE.  The generator keeps the batteries charged.  The battery powers the electric motor to accelerate the car from a stop.  After a certain speed the small ICE takes over.  When the car needs to accelerate the electric motor assists the ICE.  The small ICE has excellent fuel economy thus reducing emissions.  The electric motor/battery provides the additional horsepower when needed to compensate for an undersized ICE.  And the gasoline-powered engine provides extended range.

In addition to the parallel hybrid there is the series hybrid.  It has the same parts but they are connected differently.  The series hybrid is more like a diesel-electric locomotive.  Gasoline feeds the ICE.  The ICE drives a generator.  The generator charges the batteries and/or drives the electric motor.  The electric motor drives a transmission that spins the wheels.  This car drives on batteries until the charge runs out and then switches over to the ICE.  For short commutes this provides excellent fuel economy.  For longer drives (well over 75 miles or so) it’s more like a standard ICE-powered car with a roundabout way of turning the wheels.

Then there’s the plug-in variety.  In addition to all of the above you can plug your car into a charger to further save on gasoline use and reduce emissions (produced by the car; not by the electric power plant).  Letting you recharge the battery overnight in a standard 120V outlet.  In a slightly shorter time with a 240 volt outlet.  And quicker still in a 480 volt outlet.  If your commute to and from work is 50 miles or less you can probably charge up at home and not have to carry a charger with you (to convert the AC power to the DC power of the batteries).  Saving even more weight.  But if you plan on charging on the road you’ll need to carry a charger with you.  Adding additional weight.  Which will, of course, reduce your battery range.  Also, you can adjust the number of batteries to match your typical daily commute.  The shorter your commute the less charge you need to store.  Which lets you get by on fewer batteries.  Greatly reducing the weight of the car (and extending your battery range).  A gallon of gas weighs about 7 pounds and can take a car 30 miles or more.  You would need about 1,000 pounds of batteries to provide a similar range.  So range doesn’t come cheap.  To maximize the benefit of a hybrid you’d want to carry the absolute minimum of batteries to serve your needs.  Knowing that if you got a new job with a longer commute you could rely on the ICE in your hybrid to get you to work and back home safe again.

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FT127: “Obamacare is a lot like the Smoot-Hawley Tariff in terms of scaring the bejesus out of businesses.” -Old Pithy

Posted by PITHOCRATES - July 20th, 2012

Fundamental Truth

The Roaring Twenties gave us Automobiles, Electric Power, Radio, Movies, Telephones and Air travel

In 1921 there were 9 million automobile registrations.  That jumped to 23 million by 1929.  An increase of 156%.  That’s a lot more cars on the roads.  In the Roaring Twenties we made cars out of steel, paint and glass.  Inside we fitted them with lumber, cotton and leather.  We put rubber tires on them.  And filled their fuel tanks with gasoline.  So this surge in car ownership created a surge in all of these industries.  Extraction of raw materials.  Factories and manufacturing plants to build the equipment to extract those raw materials.  As well as the machinery to build these automobile components.  And the moving assembly lines in assembly plants to assemble these automobiles.  The plants, warehouses and automobile dealers created a surge in the construction industry.  And all the industries that fed the construction industry.  Including the housing industry to house all these gainfully employed workers.

And this was just the auto industry.  Which wasn’t the only industry that was booming during the Roaring Twenties.  Thanks to the hands-off government policies of the administrations of Warren G. Harding and Calvin Coolidge businesses introduced us to the modern world.  Electric power came into its own.  By 1929 about 80% of all installed horsepower was electrical.  And it entered our homes.  Electric lighting and electric appliances.  Vacuum cleaners.  Washing machines.  Refrigerators.  All of this required even more raw material extraction from the ground.  More manufacturing equipment and plants.  More wholesale and retail construction.  And more housing to house all of these workers earning a healthy paycheck.

And there was more.  The Roaring Twenties gave us broadcast radio in our electric-powered homes.  Free entertainment, sports broadcasts and news.  Paid for by the new industry of advertising.  Competing with radio was another growing industry.  Motion pictures.  That by the end of the Roaring Twenties were talkies.  And speaking of talking there was a lot of that on the new telephone.  In our homes.  Interconnecting all of these industries was ship, rail and truck transportation.  Even air travel took off during the Twenties.  More raw material extraction.  More equipment.  More manufacturing.  More construction.  And jobs.  More and more jobs.  The hands-off government policies of the Harding and Coolidge administrations created the great Bull Market of the Twenties.  Explosive economic activity.  Real economic growth.  Creating low-cost consumer goods to modernize America.  Increase her productivity.  Making her the dominant economic power in the world.  The Europeans were so worried about America’s economic prowess that they met in 1927 at the International Economic Conference in Geneva to discuss the American problem.  And how they were going to compete with the American economic juggernaut.  Because the free market capitalism of the New World was leaving the Old World in the dust.

Herbert Hoover was a Republican in Name Only that FDR once Admired but Calvin Coolidge Despised

This was real economic growth.  It was not speculation.  This wasn’t artificially low interest rates creating an asset bubble.  Working Americans bought homes and cars.  And furnishings.  Businesses produced these to meet that demand.  They had growing sales.  And growing profits.  Which increased their stock prices.  Investors wanted to own their stocks because these companies were making money.  And with the world modernizing these stock prices weren’t going anywhere but up in the foreseeable future.  Unless something changed the business environment.  Well, something did.

Despite the roaring economy Calvin Coolidge did not run for a second term.  Which was a pity.  For his successor, Herbert Hoover, was a Republican in name only.  He was a big time progressive.  Who wanted to use the power of government to make the world perfect.  A devout believer in the benevolence of Big Government.  He added about 2,000 bureaucrats to the Department of Commerce.  FDR at one time admired him (before he ran against him for president).  Coolidge despised him.  Under Hoover the federal government intruded into the private sector.  His economics were Keynesian.  He, too, worshipped at the altar of demand.  He believed high wages were the key to prosperity.  For people with more money buy more.  And all that buying created demand for businesses to meet.  Even during a recession he believed wages should not fall.  Despite the fact that’s what recessions do on the back side of the business cycle.  Lower prices and wages.  And lay off people.

By the Twenties American farmers were mechanizing their farms.  Allowing them to grow more food than ever before.  Agriculture prices fell.  At first this wasn’t a problem as there were export markets for their bumper crops.  Thanks to a war-devastated Europe.  But eventually the European soldiers returned to the farm.  And the Europeans didn’t need the American food anymore.  Even places tariffs on U.S. imports to their countries to help their farmers get back on their feet.  Add in a bad winter that killed livestock.  Some bad insect infestation in the summer.  Add all this together and you had the beginning of the great farm crisis.  Debt defaults.  Bank failures.  And the contraction of the money supply.  Which the Federal Reserve (the Fed) did not step in to compensate for by expanding the money supply.  Which was sort of their purpose for being in existence.  As there was less money to borrow business could longer borrow to continue their growth.  Because of the time factor in the stages of production to expand production required borrowing money.  To make matters worse the Fed was actually pulling more money out of circulation.  Because they looked at the rising stock prices and concluded that speculators were borrowing money to invest in the stock market.  Thus inflating stock prices.  But it wasn’t speculators running up those prices.  It was an economic boom that was running up those stock prices.  Until the government put a stop to that, at least.

Bad Government Policy didn’t Create the Roaring Twenties but Bad Government Policy ended Them

The Smoot-Hawley Tariff was close to becoming law in the fall of 1929.  It was moving through committees on its way to becoming law.  This tariff would raise the tax on all imports by about 30%.  The idea was to protect domestic supplies and manufacturers.  But even in 1929 it was a global economy.  A lot of imports entered the stages of production.  Which meant costs would be increasing throughout the stages of productions.  Greatly increasing the input costs of all those businesses enjoying those high stock prices.  Which would raise their prices (to cover those higher input costs).  Reducing their sales.  And slashing their profits.  Add this to the contracting money supply and it painted a very bleak picture for business.

With demand sure to fall due to a massive new tariff that was about to become law businesses cut back.  To get rid of what was about to become excess capacity.  For they were smart.  And understood what affected their businesses.  And you know who else were smart?  Investors.  Who looked at this tariff and saw a locomotive engineer about to slam on the brakes.  And if Congress passed this into law after 1928 Coolidge wasn’t going to be there to veto the law.  So they all came to the same conclusions.  The bull market was coming to an end.  And they wanted to sell their stock to lock in their stock gains.  Which caused the great sell-off of 1929.  And the stock market crash.  Starting the Great Depression.

People still debate the cause of the Great Depression.  A popular argument is that greedy investors caused it by speculating in the stock market.  Or that greedy businesses out-produced demand.  But the economics of the Roaring Twenties don’t support this.  This wasn’t people buying big houses because interest rates were low.  This was the electrification of America.  Cars.  Telephones.  Radio.  Movies.  Air travel.  This was broad and real economic growth.  Bad government policy didn’t create it.  But bad government policy ended them.  And it was the expectations of even worse government policies that yanked the rug out from underneath the economy.  By causing a business contraction and stock market sell-off.  Much like Obamacare is doing to businesses today.  Scaring the bejesus out of them.  For they have no idea what their future costs will be under Obamacare.  So they are doing their best to prepare for it.  By not expanding their businesses.  By not hiring anyone.  And sitting on their cash.  To prepare for the worst.  Much like businesses did in 1928.  Which explains why the Great Recession lingers on.

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Steam Locomotive, Diesel Electric Locomotive, Interstate Highway System, Airplane, Air Travel, Refined Petroleum Products and Pipelines

Posted by PITHOCRATES - March 21st, 2012

Technology 101

The Diesel Electric Locomotive could pull a Train Cross Country and into the Heart of a City with Minimal Pollution

The 1920s were transformative years.  The Roaring Twenties.  It’s when we moved from animal power to mechanical power.  From the horse and plow to the tractor.  From steam power to electric power.  From the telegraph to the telephone.  From the gas lamp to the electric light.  From crowded mass transit to the freedom of the automobile.  From manual labor to the assembly line. 

You can see a glimpse of that world in 1920’s Steam Train Journey Across the United States – Westward Ho!  The beginning of the modern city.  With modern street lighting.  Electric power and telephone overhead wiring.  Streets crowded with automobiles.  Tractors and mechanical harvesters on the farm.  And, of course, the steam locomotive.  Connecting distant cities.  Transferring the freight to feed the modern industrial economy.  And shipping the finished goods.  As well as all that food from the farm to our grocer’s shelves.  Proving the 1920s were vibrant economic times.  With real economic growth.  And not a speculative bubble.  For there was nothing speculative about all of this technology becoming a part of our way of life.

Of course the technology wasn’t perfect.  The coal-burning locomotives belched black smoke and ash wherever they went.  Which wasn’t all that bad in the open country where a train or two passed.  But it was pretty dangerous in tunnels.  Which had to be short lest they suffocated their passengers.  (One of the reasons why all subways use electric trains).  Making for some long and winding railroads in mountainous terrain.  To go around mountains instead of under them.  Slowing trains and increasing travel time.  And they were pretty unpleasant in the cities.  Where the several rail lines converged.  Bringing a lot of coal-burning locomotives together.  Creating a smoky haze in these cities.  And leaving a layer of ash everywhere.  The cleaner diesel-burning locomotives changed that.  The diesel electric locomotive could pull a train cross country and into the heart of a city with a minimal amount of pollution.  As long as they kept their engines from burning rich.  Which they would if they operated them with dirty air filters.  Reducing fuel efficiency by having the air-fuel mixture contain too much fuel.  And causing these engines to belch black smoke.  Similar to diesel trucks running with dirty air filters.

Airplanes can travel between Two Points in a Direct Line at Faster Speeds than a Train or Bus with Minimal Infrastructure

Trains shrunk our country.  Brought distant cities together.  Allowing people to visit anywhere in the continental United States.  And the railroads profited well from all of this travel.  Until two later developments.  One was the interstate highway system.  That transferred a lot of freight from the trains to trucks.  As well as people from trains to buses and cars.  And then air travel.  That transferred even more people from trains to airplanes.  This competition really weakening railroads’ profits.  And pretty much put an end to passenger rail.  For people used the interstate highway system for short trips.  And flew on the long ones.  Which was quicker.  And less expensive.  Primarily because airplanes flew over terrain that was costly to avoid.

Highways and railroads have to negotiate terrain.  They have to wind around obstacles.  Go up and down mountainous regions.  Cross rivers and valleys on bridges.  Travel under hilly terrain through tunnels.  And everywhere they go they have to travel on something built by man.  All the way from point A to point B.  Now trucks, buses and cars have an advantage here.  We subsidize highway travel with fuel taxes.  Trucking companies, bus lines and car owners didn’t have to build the road and infrastructure connecting point A to point B.  Like the railroads do.  The railroads had to supply that very extensive and very expensive infrastructure themselves.  Paid for by their freight rates and their passenger ticket sales.  And when there were less expensive alternatives it was difficult to sell your rates and fares at prices high enough to support that infrastructure.  Especially when that lower-priced alternative got you where you were going faster.  Like the airplane did.

Man had always wanted to fly.  Like a bird.  But no amount of flapping of man-made wings got anyone off the ground.  We’re too heavy and lacked the necessary breast muscles to flap anything fast enough.  Not to mention that if we could we didn’t have any means to stabilize ourselves in flight.  We don’t have a streamline body or tail feathers.  But then we learned we could create lift.  Not by flapping but my pushing a curved wing through the air.  As the air passes over this curved surface it creates lift.  Generate enough speed and you could lift quite a load with those wings.  Including people.  Cargo.  Engines.  And fuel.  Add in some control elements and we could stabilize this in flight.  A tail fin to prevent yawing (twisting left and right) from the direction of flight.  Like a weathercock turns to point in the direction of the wind.  And an elevator (small ‘wing’ at the tail of the plane) to control pitch (nose up and nose down).  Ailerons correct for rolling.  Or turn the plane by rolling.  By tipping the wings up or down to bank the airplane (to turn left the left aileron goes up and the right aileron goes down).  And using the elevator on the take-off roll to pitch the nose up to allow the plane to gain altitude.  And in flight it allows the plane to ascend or descend to different altitudes.  Put all of this together and it allows an airplane to travel between points A and B while avoiding all terrain.  In a direct line between these two points.  At a much faster speed than a train, bus or car can travel.  And the only infrastructure required for this are the airports at points A and B.  And the few en route air traffic controllers between points A and B. Which consisted of radar installations and dark rooms with people staring at monitors.  Communicating to the aircraft.  Helping them to negotiate the air highways without colliding into other aircraft.  And air travel took off, of course, in the 1920s.  The Roaring Twenties.  Those glorious transformative years.

Refined Petroleum Products have Large Concentrations of Energy and are the Only Fuel that allows Air Travel

The most expensive cost of flying is the fuel cost.  The costlier it is the costlier it is to fly.  Not so for the railroads.  Because their fuel costs aren’t the most expensive cost they have.  Maintaining their infrastructure is.  They can carry incredible loads cross country for a small price per unit weight.  Without swings in fuel prices eating into their profits.  Making them ideal to transfer very large and/or heavy loads over great distances.  Despite dealing with all the headaches of terrain.  For neither a plane nor a truck can carry the same volume a train can.  And heavier loads on a plane take far greater amounts of fuel.  This additional fuel itself adding a great amount of weight to the aircraft.  Thus limiting its flight distance.  Requiring refueling stops along the way.  Making it a very expensive way to transport heavy loads.  Which is why we ship coal on trains.  Not on planes.

Trains are profitable again.  But they’re not making their money moving people around.  Their money is in heavy freight.  Iron ore.  Coke.  And, of course, coal.  To feed the modern industrial economy.  Stuff too heavy for our paved roads.  And needed in such bulk that it would take caravans of trucks to carry what one train can carry.  But even trains can’t transport something in enough bulk to make it cost efficient.  Refined petroleum.  Gasoline.  Diesel.  And jet fuel.  For these we use pipelines.  From pipelines we load gas and diesel onto trucks and deliver it to your local gas station.  We run pipelines directly to the fuel racks in rail yards.   And run pipelines to our airports.  Where we pump jet fuel into onsite storage tanks in large fuel farms.  Which we then pump out in another set of pipelines to fueling hydrants located right at aircraft gates.

These refined petroleum products carry large concentrations of energy.  Are easy to transport in pipelines.  Are portable.  And are very convenient.  Planes and trains (as well as ships, busses and cars) can carry them.  Allowing them to travel great distances.  Something currently no renewable energy can do.  And doing without them would put an end to air travel.  Greatly increase the cost of rail transport (by electrifying ALL our tracks).  Or simply abandoning track we don’t electrify.  Making those far distant cities ever more distant.  And our traveling options far more limited than they were in the 1920s.  Turning the hands of time back about a hundred years.  Only we’ll have less.  And life will be less enjoyable.

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Labor Costs, Standard of Living, Artisans, Gunsmiths, Specifications, Interchangeability of Parts, Machine Tools and the Assembly Line

Posted by PITHOCRATES - February 15th, 2012

Technology 101

Since the Dawn of Civilization we’ve Waged a War against High Labor Costs

Technology determines our standard of living.  The greater we develop technology the higher our standard of living.  Because the things that make our lives easier and more enjoyable come down in price as technology advances.  So that the great conveniences and comforts of life are available to all.  And not just for the amusements of a wealthy upper class.  For example, who owned and enjoyed the first automobiles?  It was the wealthy upper class.  Exclusively.  Until Henry Ford used all the technology of the day to reduce the price of a car so that a working man could afford and enjoy one.  Changing America forever.

Labor.  The cost of people making things.  This is the cost that holds back the standard of living.  The thing that made the comforts of life affordable only to the rich.  Since the dawn of civilization we’ve waged a war against high labor costs.  To find ways to allow people to create more for less.  The division of labor allowed specialization and a middle class.  Where artisans made things they could trade for other things.  But artisans were artists.  Each thing they made was one of a kind.  And it took time.  A single artisan could not operate at an economies of scale to bring unit prices down.  Which tended to keep their more labor-intensive works more costly and available only to the wealthy class.  And rulers of their civilization.

Great talent was going to waste.  And a great number of people were not living anywhere near as well as the few well-to-do.  To unleash this human capital, to make a better life available to anyone, they had to reduce these labor costs.  Figure out a way to make more for less.  And we took a giant step forward in this direction thanks to war.  One of the great drivers of technology.

Precision Machine Tools allowed the Interchangeability of Parts

Some of our first firearms were works of art.  Built by highly skilled artisans.  Gunsmiths.  Who carefully and painstakingly shaped, fitted and gently filed parts he created and assembled together into a working firearm.  Changed the way we fought wars forever.  They were expensive.  And not all that plentiful at first.  Because it took such a long time for a gunsmith to build one from scratch.  Who was always busy building new guns.  Or carefully and painstakingly repairing old ones damaged in battle.  Shaping, fitting and filing a replacement part into the old firearm and restoring it to working order.

Then someone got a bright idea.  Actually, a few had the same bright idea at various points in time.  If we could standardize these parts by building them to a set of specifications we could mass-produce these parts.  Building the same part over and over again, one after another, following a set of specifications as closely as possible.  And then take these uniform parts and assemble firearms out of them.  Because the parts were uniform they were interchangeable.  Any part could go into any gun.  A worker could just grab these interchangeable parts from piles of identical parts and slap them together into a finished firearm.  Furthermore, we could keep spare parts in our armories.  So we can easily repair parts damaged or broken in combat by simply replacing the broken part with a new part.  Without sending the firearm back to the manufacturer.

Of course, the interchangeability of parts was not possible without the precision machine tools provided.  At first artisans guided their hand tools with a trained eye.  Often securing the piece he was working in a vise and working the tool around the piece.  Machine tools allowed us to spin our work and used a constrained tool to shape it.  Or to constrain our work and apply a spinning tool to drill, cut or shape it.  Using machines to constrain our work allowed us to apply greater forces on our work.  Which advanced metal working.  And allowed us to manufacture things with complex shapes and demanding specifications.  Creating the many thousands of pieces that we ultimately assemble into a finished good.  Allowing us to build more for less.

Computer Controlled Machine Tools and Robots increased the Speed and Precision of Assembling Automobiles

The interchangeability of parts and machine tools led to the assembly line.  Where we assembled things in mass quantities.  From piles of interchangeable parts.  Then Henry Ford made the assembly line move.  Taking mass production to a new level.  Reducing the costs for one of the wealthy class’ most expensive toys.  The automobile.  Bringing labor costs down so far that the final selling price was inexpensive enough for the working man to afford.

Computer controlled machine tools increased the speed and precision at which we made these interchangeable parts.  And robots on the assembly line increased the speed and precision of assembling automobiles.  Which should have reduced the price of cars even further.  But they seem to be more expensive than they need be.  Making many cars today too expensive for the working man.  Making them toys for the rich and well-to-do again.  For technology has reduced costs everywhere in the assembly pipeline but one.  The final assembly labor costs.  Which should have plummeted in the advance of all this technology.  But they haven’t.  Because unions have removed these costs from market forces.  Keeping labor costs higher than market costs.  And in turn pushing the selling price of their cars higher than market prices.  Opening the door to Japanese competition in the Seventies.  And the Japanese stepped in.  Sold a lot of cars.  So many that they would one day even sell more than GM.  Where we come full circle.  One of the countries (the other being Nazi Germany) that changed American manufacturing by pulling it out of the Great Depression changed it once again.

During the war years of the Great Depression FDR set a wage ceiling.  He didn’t want employers paying workers too much.  A bit of a problem when you’re trying to hire the best workers.  So employers got creative.  And, instead, started offering benefits to get around that wage ceiling to attract the best workers.  Following World War II the wage ceiling was gone.  But the benefits lived on.  And are some of the most contentious issues discussed at contract negotiations with the United Automobile Workers (UAW).  Ultimately leading to the great legacy costs that led the Big Three (GM, Chrysler and Ford) to bankruptcy and government bailouts. 

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