Friday, October 24, 2008

Condolences to True Zero and Congratulations to Armadillo.

Condolences to True Zero and Congratulations to Armadillo.

I have mixed feelings about TrueZero, I know the agony they are feeling, yet I'm a little bit personally relieved that I made the right choice to not compete this year.

Armadillo's third years the charm! Armadillo did 1/2 the task at the contest at least 5 times (I've lost count) before winning, they really deserved the win.
Now on to Level 2.....

11 comments:

david said...

I agree you made the right choice. This will just made it all the more interesting. I am very pleased your moving forward. It will be great to see the kero injected into the mix for that extra boost. Hopefully you will be doing 90 profiles soon and in the new year 180 sec profile flights.

heroineworshipper said...

As long as Karmak is allowed to keep doing what he's doing, he seems to have the right plan. Lots & lots of really small, cheap engines. Whether he's allowed to keep playing with his money like this is another story.

Anonymous said...

Why would he not be allowed to play with his money as he sees fit????

Paul Breed said...

>Why would he not be allowed to play with his money as he sees fit????
Because the government is spending like a drunken sailor and the presidential candidate leading in the poles has been very public about the need for the rich to share the money with the not rich. Note the candidate always calls it "the" money not your money. Both presidential choices this year are horrible. See:
http://www.freerepublic.com/focus/f-news/2114182/posts

alex said...

Okay so I rarely write about politics, but what was just written seems illogical to me. What I am about to write is not philosophical and assumes all one cares about is money or purchasing power. So compassion and "duty" to society are entirely ignored!

I contend that Obama's tax plan is actually better for the elite rich in addition to those receiving their money. Lets suppose you are Bill Gates while he was selling software. He has tens of millions of customers who pay a few hundred bucks for his stuff. Now rich, middle class or poor, most people only buy at most a few copies of windows. If the middle class can't afford health care and other high priority SERVICES (they are not rights), they are not too likely to be buying Windows. Now Bill Gates gets poorer too and the cycle goes on.

The economy works by having transactions! So the same dollar can be spent and received hundreds of times. Its these transactions that make the economy healthy and during a recession people make the collective mistake of saving instead of spending as normal. Hence the GDP goes down and we all suffer, rich or poor.

So things the government can do are spend and buy things in bulk and be a giant customer. That can lead to corruption though, and the natural thing to do is raise taxes on those who have a lot and proportionally spend less and redistribute it to those who spend. This kind of taxation increases spending and if done in moderation, will make the rich, richer as well since their customers have jobs and money to buy their products. And if they don't get more money, their purchasing power will surely go up since innovation in a healthy economy makes goods and services cheaper.

And this is actually what Obama was talking about with Joe the plumber. When he made the "spread the wealth" comment, it was in the context of how Joe's customers were "penny pinching" as Obama put it. Obama at least with the policies he publicly states, is NOT advocating taking from the rich and giving to the poor at the expense of the rich. He is trying to fix an economy which will benefit everyone.

Alas this is an optimization problem and of course over taxing the rich will eventually stop helping them and just be socialism. Right now we are not at that point and Obama just wants the upper tax bracket increased to 39%, which is a lot less than what we had in the 60's and 70's.

Note: Warren Buffet endorses his tax plan. The epitome of capitalism in America! He is not stupid and he knows what a depression can do. (The GDP went down 25%) in the great depression so we need to avoid that.

So getting back to Carmack, I still fail to see why someone would stop him from SPENDING his money like he is. He is fueling the economy which is a good thing.

Cheers,

Alex Bruccoleri


ps1-The video game market appears to be quite recession proof so there are exceptions.

ps2-If the rich increase the price of their stuff due the higher taxes and then reduce their customer pool, that would be silly for them and they would loose money.

ps3-I am not endorsing any candidate. I have philosophical issues to take into account with my vote on a host of issues. I am merely trying to be the voice of reason on this particular issue.

Paul Breed said...

Basic macro economics says taxation reduces the velocity of $ without taxes $1 earned gets spent and respent over and over if you tax then you reduce this velocity of $ basic econ 101.

If we have high corporate taxes then a smart corp will move away, ie you will see much more overseas outsourcing if the marginal tax rates go up. The advantage of working in the US has to outweigh the cost or the rational business man works somewhere else.

Note that costs are more than taxes, they include regulation etc....
In my primary business we design electronics boards, and resell them it costs me 2X as much to have them built in the US than built in china, the china quality is intermittent and right now the quality cost trade off is awash, increase the costs here by 20% and and the business goes to china.

No company ever pays any taxes. The shareholder, or the customer pays, never the company. The vast majority of US citizens have retirement plans, 401Ks or personal investments, we are all shareholders.

It has been shown conclusively that if you raise taxes government income increases in the short term like 12mo or less, but it decreases in the long term as you drive business away. If you have a monopoly (the government does) there is a point that maximizes your income, I think it has been conclusively shown that the maximum income for the government tax point is lower than the present rate. (plot 5yr average governemnet tax recipts vs tax rate adjust per capita)

If the Obama tax policies happen expect truly massive unemployment as the last few American companies actually creating things here leave. McCain is not much better.

As a small business man I pay
I currently pay well over 50% of my paper income in taxes if you fully account for state, local,federal,property, sales and invisible taxes like the employers part of social security, government mandated unemployment insurance etc... How much is fair? I think 50% is grossly excessive.

Increase my taxes 20% and I have to choose where does the $ to pay the tax bill come from? The vast majority of my profits are reinvested in the company to make new products and expand. So we don't do new products and don't expand, the companies in the revitalized Eastern Europe now paying low flat taxes are starting to to eat into our business, I'll bet they don't stop doing new products because our taxes go up?
The $$ has to come from somewhere?

Right now 40% of our business is overseas, we exported >500K of American built electronics to china last year. At the present tax rate and our business size it does not really make sense to setup on overseas company in some place like the Caymen's to service this 40%, Higher taxes push this marginal decision father toward leave the U.S. The tax changes in the U.S. do not occur in isolation.

Open any business magazine and you see ads for things like relocate to Ireland etc... Why are these ads here? It seems to make economic sense to someone to spend lots of $$$ advertising trying to lure companies away from the U.S.

You are competing against the world to be the best place to host your business. Momentum will hold some companies here short term, but long term the less business friendly you are the less business you have.

alex said...

Hi Paul, I do not know the inner workings of your business, I was just making the point that the motivation behind Obama's policies is not aimed at redistribution for the sake of "equalizing" things. Your business could be on that fringe where a delta epsilon increase in taxes/regulation will push you to move overseas. Obama certainly will have to make sure his policies don't push innovators like you away and I am sure there will be anecdotes where this happens. That issue is a whole different one in technology and is very complicated with all kinds of artificial incentives here and there for staying.

I was mainly responding to Joe the plumber, who I doubt is moving anywhere if he has to pay 39% instead of 36%. The "spread the wealth" comment was taken out of context and it simply isn't fair to Obama to portray it as socialism without hearing everything he said during the dialogue.


>Basic macro economics says taxation reduces the velocity of $ without taxes $1 earned gets spent and respent over and over if you tax then you reduce this velocity of $ basic econ 101.

I don't think that is correct when comparing different wealth levels of people. Rich people do not proportionally spend as much as those just getting by. You almost certainly will increase transactions by lowering their burden at the expense of the rich. If you could show a statistic that would be great. I suspect, without knowing, that this is the reason why Buffet is a strong Obama supporter.

>No company ever pays any taxes. The shareholder, or the customer pays, never the company. The vast majority of US citizens have retirement plans, 401Ks or personal investments, we are all shareholders.

If Obama gets us out of the recession, then even after the taxes, the company will do better... If he fails, then yes its bad....

>As a small business man I pay
I currently pay well over 50% of my paper income in taxes if you fully account for state, local,federal,property, sales and invisible taxes like the employers part of social security, government mandated unemployment insurance etc... How much is fair? I think 50% is grossly excessive.

Okay so abstract ideological notions of fairness is a philosophy question that I did not comment on and I was only talking about optimization. I suspect you have much more purchasing power living in America, a country that has some "socialist" safe guards to keep the middle class in place. Then you would in some south Asian countries which have "fair" tax codes that don't try to protect the middle class.

If that is not true, then my points are simply not valid.

Anyway I doubt we can settle this debate, but at least its on the right question. The focus should be on creating a society where entrepreneurship is encouraged and getting rich is the pay off of hard work. I think socialism for its sake, is a travesty and leads to stagnation so I am in no way advocating that.

Cheers,

Alex

heroineworshipper said...

Don't cha know? Ububa is gonna give a free X Prize to everyone!

alex said...

>Don't cha know? Ububa is gonna give a free X Prize to everyone!

This is not an argument of socialism vs capitalism. That is a different debate. This is merely a point that there is a balance of wealth distribution that makes the "pie" bigger for everyone. Most liberals I think want to give away too much and most conservatives, not enough. I am not an economist though, and I make no claim as to what the ideal numbers are. I just claim, its not a zero or a one.

Alex

Ashley said...

Obama is mostly just repealing some of the Bush tax cuts for the richest 5%, so the economy will be more or less the same as it was under Clinton - hardly a nightmare. Also, Obama's tax plan has total tax revenues at about 18.2% of GDP - lower than they were under Reagan. Remember that Reagan may have cut a bunch of social programs for "welfare queens", but he also quintupled defense spending. Bush has spent nearly a trillion dollars on the Iraq war, and just because he paid for it with debt rather than taxes, doesn't make it fiscally conservative.

"Note the candidate always calls it "the" money not your money."

I've heard a lot of conservative bloggers offer that talking point, and others like Fox News call Obama a socialist or a Marxist, but I haven't heard serious libertarians like Ron Paul or Reason Magazine complain that Obama is a Marxist.

Michael C. Moynihan:
"I am optimistic that our presumptive leader will govern more in the style of L.B.J. than Eugene Debs. ... So yes, I expect the next four years to be pretty grim, but those who foretell massive grain collectivization, the requisition of SUVs, a liquidation campaign against the kulaks, would be advised to take a deep breath."

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