Big Government

The presidency of Calvin Coolidge II

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Coolidge was more concerned with domestic issues than foreign policy. This had been true of most US presidents since the Civil War until 1917 and it was part of Harding’s “Return to Normalcy” plan. Coolidge knew little about other countries although he was not an isolationist. The true isolationist policy of the US was in the 1930s under Roosevelt who canceled a Hoover sponsored economic summit in Britain as soon as he was inaugurated. Only in 1939 and 40 was Roosevelt converted to the internationalist that is remembered by his supporters and biographers, internationalists themselves. I will have more to say about the slanders of Harding and Coolidge by the political left and the historians later.

Coolidge’s domestic agenda was dominated by a few issues. The first was the emergence of the “Farm Bloc” in Congress. The McNary- Haugen bill was the first of the “farm relief” bills and would dog Coolidge through his presidency as he vetoed it but it kept coming back as the farm bloc grew stronger. The background of the bill is well stated in the Wikipedia article:

World War I had created an atmosphere of high prices for agricultural products as European nations demand for exports surged. Farmers had enjoyed a period of prosperity as U.S. farm production expanded rapidly to fill the gap left as European belligerents found themselves unable to produce enough food. When the war ended, supply increased rapidly as Europe’s agricultural market rebounded. Overproduction led to plummeting prices which led to stagnant market conditions and living standards for farmers in the 1920s. Worse, hundreds of thousands of farmers had taken out mortgages and loans to buy out their neighbors property, and were now unable to meet the financial burden. The cause was the collapse of land prices after the wartime bubble when farmers used high prices to buy up neighboring farms at high prices, saddling them with heavy debts. Farmers, however, blamed the decline of foreign markets, and the effects of the protective tariff. They demanded relief as the agricultural depression grew steadily worse in the middle 1920s, while the rest of the economy flourished.

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The presidency of Calvin Coolidge- I

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Friday, August 2, 1923 was to be Coolidge’s last day of vacation at Plymouth Notch. He had posed for photographs for the small pool of reporters who covered his doings. They had shown him chopping away rot from a maple tree, wearing his suit pants and vest but bowing to the informality of the occasion by removing his suit coat. He had previously worn a woolen smock that had belonged to his grandfather for such chores but, recently, there had been accusations that it was a costume of some sort. He remarked that “In public life it is sometimes necessary in order to appear really natural to be actually artificial.”

The Coolidge family retired early. A telegram from San Francisco conveying the news of the president’s death reached reporters staying in a boarding house in Bridgewater, Vermont. They hastened the eight miles to Plymouth Notch and knocked on the door of John Coolidge’s house. He awakened his son who then dressed and came downstairs. He was informed in a telephone call from his father’s store to Secretary of State Hughes that the oath of office could be administered by a notary. Coolidge returned home and, at 2:47 am, his father administered the oath of office as president.

The nation’s newspapers carried drawings and paintings of the scene the next day. It is still the only instance of a father administering the oath of office of president to his son and of a man taking the oath at home. The house was small and lacked indoor plumbing. It was typical of Coolidge in its lack of pretension and the image was a powerful one to begin his presidency. After the oath was administered, the Coolidges returned to bed, also typical. They arose at 6 am and began the trip back to Washington with a stop at his mother’s grave in a nearby cemetery. These symbols would stand him in good stead when the Harding scandals began to fill the newspapers in the months to come.

Harding’s body was returned to Washington on August 7 where he lay in state in the Capitol. Coolidge issued a proclamation for a day of national mourning and it was apparent that Harding was genuinely liked by the public. The funeral was in Marion, Ohio on August 10.

In 1923, the presidency was very different from what it became under Hoover and Roosevelt. Coolidge greeted White House visitors in person, the last president to do so. He had one secretary and no aides. His telephone was not on his desk but in a nearby booth and unused. He did not know how to drive a car. He had carefully cultivated his image, even to his famous lack of small talk. At a dinner party while vice-president, a woman next to him at the dinner table told him she had a bet with her husband that she could get him to say at least three words. His reply was, “You lose.”

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“Behind the coming physician shortage”

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CATO’s Michael Tanner in the NY Post:

In fact, we have already seen the start of this process in Massachusetts, where Mitt Romney’s health care reforms were nearly identical to President Obama’s. Romney’s reforms increased the demand for health care but did nothing to expand the supply of physicians. In fact, by cracking down on insurance premiums, Massachusetts pushed insurers to reduce their payments to providers, making it less worthwhile for doctors to expand their practices. As a result, the average wait to get an appointment with a doctor grew from 33 days to over 55 days.

Imagine that.

SpaceX and The Evil That Men Do

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Welcome to the big leagues, rookie!

Rand Simberg reports that the Russians have suddenly become concerned about the safety of the SpaceX Falcon 9 rocket when used as a supply vessel for the International Space Station … now that that rocket seriously threatens the near-term Russian monopoly in heavy lift transport of people and materiel.

SpaceX’‘s story, for those who aren’t space enthusiasts, is a tale of new technology, dot-com money, and threatened “iron rice bowls” from one end of the high-technology world to the other.

Started in 2002 by Elon Musk with money he acquired after co-founding PayPal, Musk’s vision was to develop a new American liquid-fueled rocket engine and use economies of production and scale to reduce per-pound launch costs to a fraction of current commercial rates. Rather than a game of giant consortia, he thought that a relatively small private company could launch commercial rockets safely and much more cheaply.

In the early years, the Falcon 1 rocket, using a new Merlin engine designed and manufactured by SpaceX, was subject to several flight failures that insiders largely attributed to lack of company access to the vast body of engineering lore used in past rocket launches. Not enough engineers. Not enough expertise. Whether that was true or not, the Falcon 1 (single engine) rocket had its first successful launch-to-orbit in 2008. Six years from blank piece of paper to orbit. Nonetheless, Musk has often been dismissed by other commercial space launch organizations as a dilettante, wasting his own money on a venture that would never amount to much, and would certainly never deliver any service cheaper than the giant aerospace companies of Russia, China, the EU, and the United States.

All that started to change when less than two years after the successful launch of the Falcon 1 rocket, SpaceX’s new Falcon 9 (running 9 Merlin engines in tandem) was able to reach orbit. Suddenly SpaceX had a rocket big enough to deliver serious weight to space, and compete with the biggest commercial and state-sponsored launch services. Musk’s philosophy of rocket modularization (and cost reduction) had been proven out. A mere six months later, the company launched a second Falcon 9 to orbit with a pressurized “Dragon” capsule on top. SpaceX became the first private firm to launch and recover a crew-capable space capsule, with a splash-down off the Pacific coast of the US. To successfully launch a brand-new model of rocket, twice, with complete success, defies the laws of probability in the space launch industry. Maybe Musk really had stumbled onto a new way of designing, manufacturing, and operating rockets.

The idea that a private firm could deliver cargo, let alone crews, to the International Space Station at a fraction of the cost of the Space Shuttle or Russian Soyuz capsules would have been inconceivable a decade ago. And yet here we are in 2011 with an American dot-com multi-millionaire announcing new rockets and successfully delivering them.

Just recently, SpaceX announced plans to develop the “Falcon Heavy” which would run three Falcon 9s (3×9=27 engines) as a single first stage, delivering a proposed 117,000 pounds to Low Earth Orbit … more than the capacity of all other currently available commercial heavy-lift rockets. More, in fact, than has ever been lifted in single launches since the Saturn V carried the Apollo moon missions star-wards. First launch of the Falcon Heavy is scheduled for 2013, from Vandenburg Air Force Base. Characteristically, Musk isn’t shy about his dream for the Falcon Heavy. Hypothetical trips to the Moon, to Mars, to an asteroid, now fill his speeches.

Musk’s earlier claims of “game-changer” technology and corporate process appear to be coming true. If he delivers on his recent promises with anything near the success rate of his earlier claims, almost every space-faring nation or corporation is going to be deeply affected.

Let’s be clear, also. Musk has played the taxpayer-dollar game skillfully as he’s found initial technical success and grown his company’s staff and technical capacity. He’s received several multi-million dollar contracts from NASA for demonstration flights and future cargo delivery to the Space Station. He’s parked his corporate facilities in California (HQ and manufacturing), Texas (engine test-stand), and Florida (Cape Canaveral launch facilities) … covering his political bases by hedging good relations with US senators who already know what kind of money and jobs are created by space industry. The only senator not to dip his beak, as far as I can tell, was from Alabama (Huntsville). So Mr. Musk knows his domestic politics, or has learned its harsh anti-market lessons. And he’s successfully squared the circle of NASA bureaucracy, launching rockets on the one hand, and reassuring various government agencies that he should be allowed to.

But the opening salvo by the Russians is a prelude to a new playing field that Musk will need to master. International politics.

There are a lot of rocket engineers around the world who’ll be out of work if Elon Musk and his company can deliver cargo and people to space for half of what it costs the current aerospace giants. And even the Russians and Chinese, who can subsidize launch costs to the tune of hundreds of millions of dollars, still can’t afford to give away those launches indefinitely. Both nations operate in the market economy to the extent that they can, at the very least, estimate their per-launch losses trying to undercut SpaceX’s prices.

As an amateur who’s thrilled by the appearance of a private space industry in the last ten years, I enthused about SpaceX’s successful December launch to an colleague (ex-military) who specializes in high-tech project management. His response was “now the sabotage begins.”

And he may well be right. Whether Musk has been smart, or just plain lucky, the progress of SpaceX over the last decade has been (to my mind) dramatic. My sense is that it’s a matter of capital investment leveraging a backlog of knowledge (in technology and operational process). As long as he was a unproven minnow at the government trough, he could be ignored. Now however, SpaceX is getting big enough to put a dent in established companies’ profits and executive bonuses. There’s no reason why nations or large corporations could not have duplicated what Musk has done … but they either had no incentive or had organizational and social impediments. An “installed base.”

At the moment, they don’t seem to be trying to beat him with comparable technology. And he doesn’t seem to want to be bought out. So what competitive strategy is left? Political impediments are cheapest. Intellectual property theft is likely but it still takes time to turn that into a competing product. And what if the technology is just a part of the equation. What if workforce optimization and “one rich, risk-taking, boss” are the essential components of SpaceX’s rapid success? Will sabotage of SpaceX rockets be the only route to slowing the company down? Fulfilling, conveniently, Russian “concerns.”

Up until now, Musk has been calculating costs based on his technical requirements for design and manufacture (with a fudge factor for domestic political arbitrage). I rather doubt he’s also factored in the burgeoning security apparatus he’ll need to wrap around SpaceX’s activities to inhibit industrial espionage and/or industrial sabotage. And as he takes on more government contracts (both military and civilian), no doubt the bureaucratic restrictions on payload handling and the extra demands for operational oversight will boost company costs dramatically. Will SpaceX be strangled by a combination of bureaucrats, thieves, and saboteurs?

It’d be disheartening to see SpaceX costs slowly but surely reach equilibrium with pricing in the rest of the industry. But there’s no doubt that, left to itself, the private space industry will make some wealthy men incredibly rich, and some aerospace executives unemployed. How clever people respond to that challenge will be interesting to watch.

Enough SpaceX technology appearing in other countries in bootleg form, and enough “unexplained” failures of those really big (really expensive) SpaceX rockets, will spell a new and grimmer phase of the private space business. More and more “iron rice bowls” are being broken by SpaceX with each passing year. Hope Elon’s brushing up on his Sun Tzu.

Harding and Coolidge

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The Republican convention of 1920 knew that the party was heavily favored to win the fall election. Wilson was forlornly hoping for third term nomination in spite of his crippled state as a result of the stroke. Teddy Roosevelt had died in 1919 at the age of 60. The contenders on the Republican side included Illinois Governor Frank Lowden whose only major handicap with the voters was the fact the he had married the daughter of George Pullman, the railroad tycoon, and was rather ostentatious in displaying his wealth. He had, however, been a reform governor of Illinois. General Leonard Wood, who had been a medical officer commissioned into the regular army in 1886 as a line officer, was another. He had been the senior officer of the US Army in 1917, yet President Wilson had appointed John J. Pershing, junior to Wood, to the European command. Wilson considered Wood a potential political rival, somewhat like Harry Truman and Franklin Roosevelt considered General MacArthur.

The third contender was Hiram Johnson, who had run as Teddy Roosevelt’s VP candidate on the Progressive ticket in 1912. There was little enthusiasm for him except among former Progressives who had returned to the party for 1920. Warren Harding is often described as a dark horse who was selected by party bosses after the leaders had exhausted each other. In fact, he was always in the top four and his selection was not a surprise to the convention.

The huge surprise was the nomination of Coolidge for Vice-President. He did not seek the nomination and was not interested after his experience as lieutenant governor of Massachusetts. After the Boston Police Strike, his name was familiar to the nation and in a favorable way. A big issue was the League of Nations and Coolidge favored membership, although with the Lodge reservations. Senator Lodge, no ally of Coolidge, exchanged letters with him on the League and agreed to disagree. Nevertheless, Lodge offered to place Coolidge’s name in nomination for President. Why he made the offer is not know. After several very favorable newspaper profiles appeared in early 1920, Coolidge made another statement that he was not a candidate for President. Frank Stearns and Lodge tried to bring a Coolidge delegation to the convention but Wood lived in Massachusetts and the delegation split. His interest in the nomination was further diminished by the death of his beloved step-mother, Carrie in May 1920.

Lowden’s handlers favored Coolidge as a VP candidate as he and the governor were from different parts of the country. Lowden’s biggest problem with the bosses was his reputation as incorruptible. The Illinois party bosses distrusted him. They feared he couldn’t be bought, or if so, wouldn’t stay bought. Robert Sobel, in his biography of Coolidge, says that Lowden was probably the best qualified Republican of the 1920s. One of the party bosses, Boies Penrose, asked Harding if he wanted to be president. Harding liked being a Senator and declined, leading Penrose to look elsewhere. By the time of the convention, Penrose was fatally ill, although his reputation was still powerful. He awakened from a coma during the convention, asked about the voting and suggested they choose Harding. Then, he lapsed into the coma again.

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