From Voyager to Enterprise and Beyond
On a cold, bright winter day in December 1986 I waited with a throng of reporters and aircraft devotees in the Mojave Desert for the return of the Voyager. The specially built aircraft designed by Burt Rutan and piloted by his brother Dick Rutan and Jean Yeager was completing a nine-day first ever non-stop flight around the globe. I thought of that event as I watched on the Internet the Mojave ceremony unveiling the latest Burt Rutan flying craft, the Virgin Space Ship Enterprise – the first commercial manned spacecraft.
Sponsored in large part by entrepreneur Sir Richard Branson, the spacecraft, which can carry six passengers and two pilots, was developed and built in California at the Mojave Air and Space Port. It will be tested there for a couple of years before moving to its home at Spaceport America in New Mexico.
Both California Governor Arnold Schwarzenegger and New Mexico Governor Bill Richardson attended the ceremony on Monday.
Revisiting the George Speech
It’s been two months since Ronald George, chief justice of the California Supreme Court, gave a speech sharply critical of the ballot initiative process.
It was an important address. And, for the most part, the speech was on target in identifying California’s peculiar initiative process (we’re the only American jurisdiction in which a statute passed by initiative can only be altered by another vote of the people) as a culprit in the state’s governing and fiscal crisis.
But in the past couple months, as I’ve thought more about the speech, a few things have bothered me. I re-read it recently and offer two small criticisms, and one large one:
– George exaggerates in the speech how easy it is to qualify and pass an initiative constitutional amendment. California permits a relatively small number of petition signers – equal to at least 8% of the voters in the last gubernatorial election – to place before the voters a proposal to amend any aspect of our Constitution.” That’s not a relatively small number – right now, it works out to just under 700,000 valid signatures. As a pratical matter, petition circulators who want to be sure to qualify for the ballot need to gather more than 1 million signatures. That’s at least a $2 million process. There’s nothing “relatively small” about such an enterprise.
Scraping Skies, Hitting Bottom
The recent news that Dubai may make a stunning financial belly-flop probably shouldn’t be surprising. After all, Dubai is now finishing construction of the world’s tallest building.
If you said, “Huh?” here’s the explanation: There’s a correlation between tall buildings and falling fortunes. A Deutsche Bank economist 10 years ago came up with the Skyscraper Index, in which he postulated that unusually tall buildings tend to get built (or announced to be built) just before recessions, depressions and financial panics.
Examples abound. The Metropolitan Life Tower in New York was the world’s tallest building for a few years; its construction was announced a couple of years before the Panic of 1907. Three buildings in New York – the Chrysler Building, 40 Wall Street and the Empire State Building – were constructed about the same time and each had a claim as being the world’s tallest, although the claim was brief for two. All three flung open their doors just in time to usher in the Great Depression.
Herding Cats with Bankers in Merry Olde England
Comfortably ensconced in a Sussex Countryhouse Hotel, at the Future of Finance Initiative, a conference organized (“organised,” if you are a British journalist) by The Wall Street Journal, top flight bankers and financiers are meeting to discuss the near-death experience of the banking industry in Fall 2008, and whither we goest from here. Former US Fed Chairman Paul Volcker told the impressive assembly that they had better ‘wake up’ before it is too late.
When I say these things here, it is just me; when Mr. Volcker says them, financial movers and shakers might actually listen.
Volcker told them that they failed to understand just how close to the edge the US economy, and therefore the world economy, had come in the Fall of 2008. He also told them they were being pigs about excessive compensation and that complex and exotic financial products (that I have written about here too many times to count), such as credit default swaps (CDS) were a real Witches Brew of trouble.
Volcker was in charge of the US Fed from 1979 to 1987 and currently chairs President Obama’s Economic Recovery Advisory Board. He should know from whence he speaks as Volcker presided over several up and down cycles in the US economy (for those who remember back that far).