Carnegie, Rockefeller, Ford, Westinghouse, Boeing, Gates and Tariffs

Posted by PITHOCRATES - September 10th, 2013

History 101

Ford brought the Price of Cars down and Paid his Workers more without Tariff Protection

Andrew Carnegie grew a steel empire in the late 19th century.  With technological innovation.  He made the steel industry better.  Making steel better.  Less costly.  And more plentiful.  Carnegie’s steel built America’s skylines.  Allowing our buildings to reach the sky.  And Carnegie brought the price of steel down without tariff protection.

John D. Rockefeller saved the whales.  By making kerosene cheap and plentiful.  Replacing whale oil pretty much forever.  Then found a use for another refined petroleum product.  Something they once threw away.  Gasoline.  Which turned out to be a great automotive fuel.  It’s so great that we use it still today.  Rockefeller made gasoline so cheap and plentiful that he put the competition out of business.  He was making gasoline so cheap that his competition went to the government to break up Standard Oil.  So his competition didn’t have to sell at his low prices.  And Rockefeller made gasoline so inexpensive and so plentiful without tariff protection.

Henry Ford built cars on the first moving assembly line.  Greatly bringing the cost of the car down.  Auto factories have fixed costs that they recover in the price of the car.  The more cars a factory can make in a day allows them to distribute those fixed costs over more cars.  Bringing the cost of the car down.  Allowing Henry Ford to do the unprecedented and pay his workers $5 a day.  Allowing his workers to buy the cars they assembled.  And Ford brought the price of cars down and paid his workers more without tariff protection.

George Westinghouse decreased the Cost of Electric Power without Tariff Protection

George Westinghouse gave us AC power.  Thanks to his brilliant engineer.  Nikola Tesla.  Who battled his former employer, Thomas Edison, in the Current Wars.  Edison wanted to wire the country with his DC power.  Putting his DC generators throughout American cities.  While Westinghouse and Tesla wanted to build fewer plants and send their AC power over greater distances.  Greatly decreasing the cost of electric power.  Westinghouse won the Current Wars.  And Westinghouse did that without tariff protection.

After losing out on a military contract for a large military transport jet Boeing regrouped and took their failed design and converted it into a jet airliner.  The Boeing 747.  Which dominated long-haul routes.  Having the range to go almost anywhere without refueling.  And being able to pack so many people into a single airplane that the cost per person to fly was affordable to almost anyone that wanted to fly.  And Boeing did this without tariff protection.

Bill Gates became a billionaire thanks to his software.  Beginning with DOS.  Then Windows.  He dominated the PC operating system market.  And saw the potential of the Internet.  Bundling his browser program, Internet Explorer, with his operating system.  Giving it away for free.  Consumers loved it.  But his competition didn’t.  As they saw a fall in sales for their Internet browser programs.  With some of their past customers preferring to use the free Internet Explorer instead of buying another program.  Making IE the most popular Internet browser on the market.  And Gates did this without tariff protection.

Tariff Protection cost American Industries Years of Innovation and Cost Cutting Efficiencies

Carnegie Steel became U.S. Steel.  Which grew to be the nation’s largest steel company.  Carnegie had opposed unions to keep the cost of his steel down.  U.S. Steel had a contentious relationship with labor.  During the Great Depression U.S. Steel unionized.  But there was little love between labor and management.  There were a lot of strikes.  And a lot of costly union contracts.  Which raised the price of U.S. manufactured steel.  Opening the door for less costly foreign imports.  Which poured into the country.  Taking a lot of business away from domestic steel makers.  Making it more difficult to honor those costly union contracts.  Which led the U.S. steel producers to ask the government for tariff protection.  To raise the price of the imported steel so steel consumers would not have a less costly alternative.

During World War II FDR was printing so much money to pay for both the New Deal and the war the FDR administration was worried about inflation.  So they put ceilings on what employers could pay their employees.  With jobs paying the same it was difficult to attract the best employees.  Because you couldn’t offer more pay.  So General Motors started offering benefits.  Health care.  And pensions.  Agreeing to very generous union contracts.  Raising the price of cars.  Which wasn’t a problem until the imports hit our shores.  Then those union contracts became difficult to honor.  Which led the U.S. auto makers to ask the government for tariff protection.  To raise the price of those imported cars so Americans would not have a less costly alternative.

These two industries received their tariffs.  And other government protections.  Allowing them to continue with business as usual.  Even though business as usual no longer worked.  So while the foreign steel producers and auto makers advanced their industries to further increase quality and lower their costs the protected U.S. companies did not.  Because they didn’t have to.  For thanks to the government they didn’t have to please their customers.  As the government simply forced people to be their customers.  For awhile, at least.  The foreign products became better and better such that the tariff protection couldn’t make the higher quality imports costly enough to keep them less attractive than the inferior American goods.  With a lot of people even paying more for the better quality imports.  Losing years of innovation and cost cutting efficiencies due to their tariff protection these American industries that once dominated the world became shells of their former selves.  With General Motors and Chrysler having to ask the government for a bailout because of the health care and pension costs bankrupting them.  Something Carnegie, Rockefeller, Ford, Westinghouse, Boeing or Gates never had to ask.

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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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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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