Re: Vision of the three Rs: Regular, Reliable and Reusable

On Mar 12, 1:38 am, "Michael Turner" <l...@xxxxxxx> wrote:
On Mar 11, 10:24 am, "Len" <l...@xxxxxxxxxxxxxx> wrote:



Raising money from the public by
non-government or other than non-profit
entities has generally--and unfortunately
and contrary to earlier American traditions
--become to be considered as either illegal,
immoral or both.

If the government underwrites the tickets
--even without any price subsidy--then
potential investors would have one less,
critical reason not to consider investing in
the development of a commercial space
transport. Although this is government
interference in the market to some extent,
it also is an attempt to undo some of the
harm caused by government handiwork.

This takes the discussion into territory that we've mostly handwaved
away -- establishing political legitimacy. Let's continue to handwave
away the various (and likely) taxpayer objections (the hardest part of
the problem, really), and look at legislatures and incumbent launch
providers, and maybe the judiciary as well. How do you persuade
*them* to follow such a radical change of course?

To "undo some of the harm caused by government handiwork", you have to
establish that there has been harm. To get launch industry support,
you have to make a case that a new policy is remedial -- i.e., that
there should be government spending (or tax relief anyway) to get the
market back on a track it would have taken long ago, had it not been
for the "harm".

There are possible precedents for this. For example, when the Judge
Green decision came down on deregulating telecom, incumbents (mainly
AT&T, of course) complained that they had huge sunk costs predicated
on the old order, and deserved to be compensated somehow. And they
were. The government effectively admitted "harm" done to the telecom
*market* by its support of regulated monopolies. But it also admitted
harm that would be done to those regulated monopolies by deregulation
decisions that nobody in the industry could have foreseen.

I don't think making any such case will be easy. You can point to
Space Adventures and the Russians, and say, "look, there are obviously
some perverse barriers to commercialization in the American launch
industry, if they could do commercial space travel before we could."
Well, I don't know about that. If you ran the Russian program in
America, paying American salaries, it might cost more like $150M to go
to orbit, not $20M -- Dennis Tito wouldn't have happened. Sea Launch
uses some Russian/Ukrainian components, and between launches it sends
a lot of its operations staff back to Ukraine, where a very modest
salary in American terms turns into a very comfortable income indeed.
Can you have an effective remediation program for the American launch
without also having permanent protectionism?

I think there are some plausible components of a remediation argument
for more rational subsidies. For example, Kennedy's decision (as
documented in The Decision to Go to the Moon) to pursue Apollo as a
program commitment that could be abandoned if taxpayers lost
interest. The original vision of how the Moon would be done -- build
a station, and use it as a base from which to build spacecraft in
orbit -- might have been made more compelling than a race to the Moon
-- and would have resulted in a longer term commitment, earlier. Then
there's the Shuttle program, based on lies. Nixon defended the
decision as a long-term cost-saver, but the argument was false. (Did
he know that? What did he know and when did he know it?) One can
argue that perpetuating the Cold War beyond reason (faulty
intelligence used to support the arms race at various points) closed
off opportunities to pursue space commercialization, perhaps *with*
the Russians, and left the launch industry mired in the cost-
*maximizing* economics of the military-industrial complex, as
described by Seymour Melman in The Perpetual War Economy.

I still think it's a tough case to make, to the launch industry, to
legislators, to the judiciary. And even if you could do it, how do
you sell the taxpayers on a Vision for Space Industry Remediation?
You'd have to paint a very compelling picture of how much brighter the
picture would be *now*, based on counterfactuals.

-michael turner

I generally agree with your comments--
although I think that Nixon merely repeated
the lies initially made at lower levels of the
Space Shuttle bureaucracy.

My comments were make in the context
of merely trying to describe the situation
--without any real hope of correcting it
in toto. Perhaps it might be posssible to
chip away at some of the corners.

My reference to the "harm caused by
government handiwork" referred to a
much broader, general domain. For
example, the restriction on advertising
by SEC Rule 506 for accredited investors
may be somewhat overzealous and
unnecessary, as some securities
practicioners have stated. Many states
do allow limited advertising for accredited
investors; however, this does not let one
of the hook for other than intrastate
offerings. A simple modification of SEC
Rule 506 might allow the market gurantee
approach to be transferred from the
government to a large number of more
adventurous accredited investors that
might comprise a rather small percentage
of the total pool of accredited investors.
Discounted tickets to an accredited investor
could also have tax benefits: if everything
worked out well, the accredited investor
would have to pay tax only on the discounted
amount of the ticket; if things didn't work out
well, the accredited investor could have a
write-off, if the offerering is structured the
right way.

Accredited investors are probably the only
people who will be able to afford a trip to
space on their own resources It would be
nice to do something for the little guy. But
this pretty much leads to a lottery. Again,
we get into the illegal and immoral category
--something that can only be entrusted to
governments and churches.

Len

.

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