Now you see it. Now you don’t. Thinking about the Biden administration’s new industrial policy I am trying to square two realities in my head. On the one hand the infrastructure, CHIPs and Inflation Reduction Acts seem to be translating into a real investment and construction boom.
Defying gravity, no. Defying inertia and complacency, absolutely.
Robert Fulton invited the steam boat in 1807.
Steam-powered railway carriages came alonmg in the 1830s
By 1863, steam-powered locomotives were sufficiently well developed to warrant Congress to authorize and fund a transcontinental railroad connect the eastern seaboard with Sacramento, California. The final link-up occurred in Ogden, Utah Territory in 1869. And all of that occurred during the course of a bloody civil war.
The Wright brothers flew the first airplane in December 1903. Forty years later, the first turbine-powered jet aircraft were already in production, reaching speeds of 500 miles per hour. That's an open airframe constructed from wood, canvas, and held together with baling wire to a monocoque, flush-riveted airframe employing electronics, hydraulics, and cable or pushrod mechanical controls, balanced, and sufficiently rigid to withstand strong aerodynamic forces. Forty years. And within six years after that we had aircraft that could withstand the rigors of flight faster than the speed of sound.
Twenty years after that, we put men on the moon, and had them safely returned to Earth.
Of the two human force constraints, defying gravity was by far the easiest to accomplish. Defying human sloth and complacency, risk aversion, and intellectual laziness, that's a lot harder.
Thanks for the great note. What would you see as a policy with a similar intent that would have a genuinely transformative impact at the macro level? Just IRA but at a greater scale?
Great analysis and on the numbers this makes sense. Given the relatively incremental scale, is the European panic about the impact of IRA aso overblown?
Defying gravity, no. Defying inertia and complacency, absolutely.
Robert Fulton invited the steam boat in 1807.
Steam-powered railway carriages came alonmg in the 1830s
By 1863, steam-powered locomotives were sufficiently well developed to warrant Congress to authorize and fund a transcontinental railroad connect the eastern seaboard with Sacramento, California. The final link-up occurred in Ogden, Utah Territory in 1869. And all of that occurred during the course of a bloody civil war.
The Wright brothers flew the first airplane in December 1903. Forty years later, the first turbine-powered jet aircraft were already in production, reaching speeds of 500 miles per hour. That's an open airframe constructed from wood, canvas, and held together with baling wire to a monocoque, flush-riveted airframe employing electronics, hydraulics, and cable or pushrod mechanical controls, balanced, and sufficiently rigid to withstand strong aerodynamic forces. Forty years. And within six years after that we had aircraft that could withstand the rigors of flight faster than the speed of sound.
Twenty years after that, we put men on the moon, and had them safely returned to Earth.
Of the two human force constraints, defying gravity was by far the easiest to accomplish. Defying human sloth and complacency, risk aversion, and intellectual laziness, that's a lot harder.
Thanks for the great note. What would you see as a policy with a similar intent that would have a genuinely transformative impact at the macro level? Just IRA but at a greater scale?
Great analysis and on the numbers this makes sense. Given the relatively incremental scale, is the European panic about the impact of IRA aso overblown?
I have a related paper with co-authors here: https://www.nber.org/system/files/working_papers/w31267/w31267.pdf
How does this affect the market?