Ones and Zeros

The FAA is pushing something called NextGen, a broad revamping of the air traffic control system.  It will require expensive new equipment in aircraft (ADS-B, TIS-B) and change many of the currently successful procedures to fly.  In turn the FAA says that this will improve the kinds of weather we can fly in, improve airport utilization, and speed up air traffic.  The improvements that are offered address flying between airports (enroute) and approaching airports to land (approach phase).

I don’t think that the technology planned is bad, I’m for some of it - with caution and if some important questions are answered.  But putting aside the technology for now I have some questions about those touted benefits.

The airliners use a hub-and-spoke system.  That is smaller aircraft (small for commercial aircraft - only holding 30-100 people) fly from outlying airports to larger hub airports.  People change planes and either fly to their destination or to another hub that connects to their destination.  This is the usual drill we’re familiar with.

The FAA tells me that there are over 20,000 airports in the US.  Some are small grass airstrips, some are LAX and Dulles, most are somewhere in between.  Of all of those airports there are only 700 that get more than 1000 passengers per year.  That is the equivalent to one flight per week of 20 passengers: a small airport indeed.

Most of the traffic goes into and out of the hub airports.  There are only 140 hub airports, and only 31 of them are the large hub airports.  If you’ve flown much you can probably name most of those large hubs as you’ve been there.

So we have successive concentrations:  First only 700 out of 20,000 airports are used commercially (4%).  Only 140 of those 700 are hubs (20%).  But only 31 of those 700 get most of the traffic (4%).  This means that the airspace and runways of those big hubs are very busy.  (All numbers are from DoT 2007 enplanement statistics, the most recent available at this writing.)

There are technical and safety considerations to how fast airplanes can land. Wake turbulence and the safety of having only one airplane on a runway at a time dictate that a runway will only land or takeoff about 60 aircraft per runway per hour when things are perfect.  Bad weather or mixed aircraft types both slow things.

So, how is improving the enroute (between airports) and approach (near an airport) situation going to get more airplanes on a runway?  The answer is it can’t.  The FAA is getting carried away with its own marketing.

Unless you can use more airports (and thus more runways) you can’t improve things.  The hub-and-spoke also forces concentration at the large hubs and so limits air traffic.  Until that changes, we’ll have delays.  And one delay at one large hub airport can affect much of the whole country since so many planes use those big hubs.  There are good reasons to use hub-and-spoke, but there are costs too.  This is one of them.

One of the reason that only 4% of all US airports are used commercially is due to airport infrastructure: landing systems, lighting, TSA security screening, baggage handling, fuel farms, office space, etc.  If this doesn’t get built out at smaller airports, then we can’t expand the use of these airports for commercial use.

A friend emailed me recently (thanks WSM!):

The HUGE amount of money being spent from Obama and Bush bailouts is positively stunning, do you think economy will recover quickly and to an extent that will generate enough tax revenue and for loans to be repaid quickly? I keep hearing commentary and it seems an almost even split on whether we are spending our selves into financial oblivion or fixing our problems. What do you think is going to happen ?

I replied:

The bailout is necessary, but is another problem to solve. The great depression lasted a decade from 1929 to the early 40s and in the end was only alleviated by the ramp up in spending to go to war. War is a really terrible way to solve a economic crisis of course. As a side note, you can make a very good argument that Hitler would have never gained power if Germany and Europe wasn’t a disaster area economically. Lack of money drives people to do bad things and creates social upheaval and chaos.

More recently Japan had their “lost decade”, also caused by a price bubble. So this sort of thing can last well over 10 years if it is not addressed well. The stimulus has some technical problems, but is a good attempt at addressing the real problem. A decade of lost opportunity, poor health care, poor education, and shortages all around is enough to cause major problems for a generation of people. And that’s the least of the problems (see Hitler above).

The real problem is the GDP (gross domestic product - the sum of the economic production of the country plus exports minus imports) has a shortfall caused by this crisis. That shortfall is from the money “evaporating” as a result of the loss of value. The stimulus is intended to fill that hole and thus “stimulate” the economy. It is partly too late already, but better late than not have it at all. Unemployment is high now, and will get higher. It is a more useful indicator that the stock market. The stock market is a fickle indicator, it is more tuned to Wall St than Main St. Its daily ups and downs are not that important, but its longer term trend is a forecasting indicator. However it is hard to tell the difference between the trend and the various short-term ups and downs.

The problem with the stimulus spending is that we need to either borrow the money or simply print it. Both create problems. If we borrow it we have to borrow it from those that have it: China, the Middle East, etc. We also have to pay it back. Borrowing that much can make those borrowers nervous. Some of China’s recent statements show that they’re not happy loaning that much. If we print it then we cause inflation later. That has its own distorting effect on the economy as in the 1970’s and 80’s. Inflation discourages saving and encourages borrowing.

But if we don’t do the stimulus, the economic problems we see now are trivial compared to what will happen. Right now we have 8.5% official unemployment rate. In the 30’s it was as high as 25% officially. (Unofficially we have around a 15% rate with people who are either underemployed or have just stopped looking.) It’s bad now, but most people are not going hungry. That will change if we don’t fix the problems.

Some people, like Newt Gingrich, just want to “let the markets work” and companies fail. That’s one solution, but not the best one. Besides, this idea is based on the notion of free markets. As I’ve written before there are very few actual free markets in the economic sense. Market corrections work by people losing money, losing their jobs, and perhaps losing their futures. The can also result in price gouging and personal suffering. Market corrections like that are unfeeling. They also sweep up things that wouldn’t otherwise be affected; healthy companies that just can’t get working credit anymore, or bankrupt cities and towns that can’t afford basic services.

It’s funny that the politicians I’m seeing complaining and wringing their hands over the size of this stimulus are the same ones that are willing to go massively into debt to fund an endless war, lower taxes on the rich, and also to reduce regulation so let companies get away with creating this mess. Now, with Obama in office wanting to spend money on infrastruction and to help non-rich regular Americans these same people object.

So yeah. I think we need the stimulus, but I sorely regret that we need it as it will cause other (fortunately smaller) problems. When Bush came into office, the annual budget debt that the government had since 1863 was zero (although we still had an accumulated long-term deficit to pay off). Bush squandered the surplus he inherited by giving it to the rich and starting an unnecessary war in Iraq.

ABC News and CNN as well as other sources reported a stolen Cessna airplane from a flight school in Thunder Bay ONT. The pilot was possibly a student there. He stole the plane and flew into the US. At this point his motives are unclear. What we actually know is that he flew about 1000 nautical miles (about 1150 miles statute) and landed on a dirt road. His border passage was noted by the US military who followed him and tried to communicate with radio and hand signals. He didn’t respond to either.

The military jets and their commanders did well in treating the unarmed Cessna as what it was - not a significant threat. They shadowed it till it landed on a dirt road. They handled the situation well and successfully.

The pilot was a turkish immigrant, but we don’t know anything more than that right now. This doesn’t mean that because he is Turkish (and thus probably muslim) that he is a terrorist. After all, because I’m American doesn’t make me agree hate muslims either. We just don’t know enough to speculate usefully yet. But we can speculate usefully on the aircraft.

I don’t yet know what model of Cessna 172 that plane was, but it was probably a recent model which would mean a 180 hp engine, and clearly had the long-range fuel tanks that hold 56 gallons US (if my memory is correct) or he wouldn’t have made it that far. That plane will use about 8 gallons of gas/hour, or around 6-7 gal/hr at higher altitudes. At one point the pilot was flying at 14,000 feet. To get that high in a C172 you’d have to have a newer, more powerful engine. In any case, he was at the limit of his range when he landed.

His plane wasn’t a threat since it is a small plane. A C172 can weight up to 2400 or 2500 lbs depending on the model. The weight of the plane and fuel is about 1600-1800 lbs US leaving 800-700 lbs for pilot and passengers, etc. The military pilots could see inside his plane to see he was alone. Frankly, he probably couldn’t have gotten that range otherwise. A plane this size can’t carry enough to make it really dangerous.

Crashing it into something relies on the speed and the fuel carried in the plane as the danger. The speed and fuel levels aren’t enough to make a very large threat. These planes go 1/4 of the speed of a commercial jet. And commercial jets can use 800-1000 gallons of fuel just to takeoff and climb out of the airport. Or, more fuel than the total weight of the C172 and pilot together.

Another perspective is that a Cessna like this weighs less and carries less fuel, less passengers, and less luggage that many or most of the cars on the road in your morning commute. Certainly, any SUV outweighs this plane easily. And of course any truck can carry more explosives and also often park innocuously next to a building.

When small aircraft have hit buildings, the result is pretty much total destruction of the plane and pilot and only limited damage to the building. That’s why terrorists world wide don’t use small aircraft. Because if they did, the results wouldn’t be very dramatic for their purposes.

In the various accounts of the ongoing financial debacle, including mine, there are amounts tossed around of how much money was lost or how much the stock market will decline.  I keep hearing the question of where did that money all go?  Money doesn’t just evaporate does it?  Someone has to have it!

Turns out that’s not so.  It can evaporate after all.  Remember that money isn’t real, value is.  And value is based on what we think is valuable.

This is partly confused because we think of things like stocks and bonds and other financial investments as money when they’re not money.  Money is either the bills in hand (or wherever) and the electronic numbers in your bank’s computer.  Investments are something you’ve bought with money that, you hope, will go up in value.  Stocks are part of a company, bonds are part of a loan to a company, city, or other government.

If you buy something with money, you don’t have money anymore, you have that quantity of something.  Now, if we all decide suddenly that what you bought is now worth less and you then try to sell what you bought, you end up with less money.  Basically, it evaporated and no one has it.

The key to keep in mind is value, not money.  Money is an imperfect way to keep track of value.  Since our idea of what’s valuable can change, the worth of your investments can change.  Money is also an imperfect measure of value due to inflation and other similar distorting factors.

Some things, like stocks and other investments, have volatile values that depend essentially on the average of what many people think about future prospects, and thus values, from day-to-day.  Other things, like bread or bricks, are relatively constant and their value is more related to the price of their ingredients.

As a result, money in the aggregate is something of a fiction.  It’s real since we all need it as a medium of exchange, but it’s fictional since it is based on our common sense of what has value and what doesn’t.  And people can be fickle.  Last summer and fall we decided that  the debt level of some of these banks wasn’t realistic and we didn’t really know what they were worth.  Suddenly, their value was much less than last spring.