Idea Machines
Policy, TFP, and airshiPs with Eli Dourado [Idea Machines #38]
Eli Dourado on how the sausage of technology policy ...
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Jul 27 2021 1h 6m
Chapter 1 59 sec
Chapter 2 59 sec
where he navigated the thicket of regulations on superstar. Before that he directed the technology policy program at the Mercatus center at George Mason university. I wanted to talk to Eli because it feels like there's a gap between the people who understand how technology works and the people who understand how the government worksChapter 3 59 sec
Boom. You're you're on a policy team at a technology company and. Yeah. Yeah. So when I, when I started at boom so we had a problem. Right. Which was like, we needed to know what landing and takeoff noise standard we could design tooChapter 4 59 sec
for, for landing and takeoff, which is like the big thing that we are concerned about, like that's all subsonicChapter 5 59 sec
totally like, even trying to figure out like what the constraints you're under are. Exactly. Right. So, so yeah, so it was, there's like a bunch of different, different aspects of that question, right? So there will you know, there's, there is statute, you know, congressional laws passed by Congress that had a bearing on the answer to that question that I went back to like the 1970sChapter 6 59 sec
under the watchful eye of Boeing, of course alsoChapter 7 59 sec
the other people didn't want to do that. Right. We tried a bunch of different angles in terms of, you know, we, we, what we ended up doing w w we got Congress to get excited about it and sort of, they, they started to, you know, there was a. Sort of a draft bill that had some, some very forward-leaning supersonic language that we, we you know, worked with Congress on it never passed in exactly that form, but it passed later in the 2018 FAA reauthorizationChapter 8 59 sec
So by the end of, I think December, 2017, we applied, I of course, you know, talk to my FFA colleagues and told them like, Hey, we're going to applyChapter 9 59 sec
w basically a memo that, that was, that was published that was like, okay, the subsonic standards don't apply and we don't have standardsChapter 10 59 sec
for, for context, the subsonic standards are the standards that do not a lot, like that set a very like low noise bar. It's very stringentChapter 11 59 sec
or 36? And volume, volume, volume, 14 of the code of federal regulations, part 36. Yes. Yeah. Yeah. And that's that, that's the part that specifies all the takeoff and landing noise certification rules for bar, all, all kinds of aircraftChapter 12 59 sec
I, I forget the details, but they, they might've changed the definition so that so that boom was at least you know, would, would apply the five-year time limit and stuff like that might applyChapter 13 59 sec
vary from company to company, depending on what it is you need to doChapter 14 59 sec
wrote a paper on Supersonics and that was, you know, that one I think actually was really influential. Right. So we, we published it a month before the 2016 election, when we thought Donald Trump was going to lose and we titled it sort of as a joke make America boom again you know, so it was like, the slogan was perfectChapter 15 59 sec
that a lot of different policymakers could look at quickly and say like, okay there, you know, there's some good ideas behind this and we need to support this broadly. And, and, and it's, you know, it's a reputable sort of outlet that, that came up with this and it's, and it's got all the sort of info that we need to, to be able to operate independently and moving this idea forwardChapter 16 59 sec
someone who's completely naive to the world is like, how do you figure out who the right person is? Well, I think it depends on what you need to do, right? So like, if you need to repeal an act of Congress, you know, you've got to go to Congress. Right. So, so that's that's an exampleChapter 17 59 sec
like, it it's pretty likely to happen. Right. It leads still, still sort of control the stuff that at least at least the stuff that nobody else cares about. If it leads care about it, then, then they'll, they'll get their wayChapter 18 59 sec
regulations? I mean, I think like nuclear is, would be like, I would think that that would be like one of the hardest regulations change, right? The, the, the sort of you're taking an entire agency, like the national the nuclear regulatory commission. Right. And you're saying like, we have to completely change the way, like, like if I were, if I were at one of these efficient startups, rightChapter 19 59 sec
leveraged policy issues where, where you can make a big difference. So that's, that's, that's how I think about it. And it's issue selection. Like when you're, when you're in the nonprofit world and you have the luxury of that, rightChapter 20 59 sec
would unlock. Massive amounts of aerospace engineering development in a completely you know, new regime of flight that no one else has, no one else is doingChapter 21 59 sec
a, it would be a huge A huge improvement. Right. And so, so I think that's, that's a highly leveraged one, one that I'm working on, you know, a lot more lately, I'm sure you've seen is geothermal, rightChapter 22 59 sec
Right. So you'd go, you massively speed it up. Right. And so, and so, so just that sort of speed up on federal lands that wouldn't even change anything on, on private lands or on, on state lands necessarily. W w that, that sort of acceleration, I think, would, would, you know, could bring forward sort of the timetable for sort of the geothermal industry as a whole, by a few yearsChapter 23 59 sec
educate them and sort of, you know, get them, get them get buy-in for like some sort of, you know, pilot program or, or whatever, whatever would be, whatever the right answer is for for thatChapter 24 59 sec
find more of those leverage points? Like it was, it, is it, I guess there's like two, maybe two purchase. One would be just like take an area of interest and like, just like comb through the lawsChapter 25 59 sec
would they run into, right? What is that? What is the actual obstacle? What is the actual policy obstacle that they face?Chapter 26 59 sec
as possible on from on a technical level about, about the technology and how it works and like the physics of it or the chemistry of it, whatever it isChapter 27 59 sec
someone at, at a federal agency or something like that, that I can explain it to them. Right. And in sort of in a way that they can understand. So, so I think that you know, thinking from the bottom up you know, try and trying to put yourself in the position of the bottom of the entrepreneur working on it, looking at it from looking at it from you're not being afraid to dig into the technical weedsChapter 28 59 sec
anything that touches government. And, and like that seems suboptimal. Yeah. So it's something that I think about a lot. We're thinking about a lot at the CGO actually is, is, you know, how can weChapter 29 59 sec
And, and the question is like, who are these people that want to do it? You know, there's not, it's not really like a career track. Exactly. Right. It's. And so, you know, if we, if we found a bunch of people that wanted to be that, that you know, in, in that sort of Venn diagram overlap, like we would, we would definitely be interested in training them upChapter 30 59 sec
policy risk, right. Or something like that, you know, like, like, you know, I think it's you know, I think it varies case by case how much of a risk it actually is. But I think it, you know, sort of my view when I was at boom was like, look, there's no way that FAA is not going to let us certify planeChapter 31 59 sec
and, you know, what, what can be, what can be worked and what can't in terms of policy risksChapter 32 59 sec
all, but it's basically a history of sort of the aviation industry up through what they call deregulationChapter 33 59 sec
convenient route choice and so on. And then And then sort of in the late 1970s under Jimmy Carter, I think I think Ted Kennedy was was the, one of the big proponents of it. So was like getting rid of the civil aeronautics boardChapter 34 59 sec
but, but, but yeah, I think that but yeah, it's, it's not, it's not like a lot of people think like regulations a one way ratchet. That's not totally true. Like there have been, has been times in the past where we got rid of a whole lot of regulationChapter 35 59 sec
doesn't regulate safety and a lot of things, right. They just it's just reality is that you know, the peop the public like sort of wants the government to regulate safetyChapter 36 59 sec
enforced or the way that that is, is dealt with is that the car companies, you know, know that they have to design to these standards NITSA monitors, the market, all right, the marketplace, they sample sample cars that, that and, and test them and stuff like thatChapter 37 59 sec
necessarily like verify it upfront. We're going to, which is costly. We're gonna, we're gonna let it play out in the marketplace for awhile. And if we detect like a certain degree of unsafeness, we're going to make you fix itChapter 38 59 sec
that's just not where we are. And so I think it is hard for people with You know, sort of bought into the current system to, to think about like how we would get there or how that would be, you know, why we would ever do thatChapter 39 59 sec
eventually, but by 2050, I think we, I think we could get the U S so the U S has 63 K right now. Which so, so like we've got a triple it, yeah, we've got it from the blood. And so the interesting thing that I think is like, so the U S looks like it's both low places like Ireland and SwitzerlandChapter 40 59 sec
I think that the degree to which it's imperfect, it's often overstated by, by peopleChapter 41 59 sec
And just to like, dig into that, how do, how do you measure inputs? So like, like outputs is just like all, all like basically everybody's receipts, rightChapter 42 59 sec
immigrants and and brought them in, so, okay. Like labor productivity would go down. If it's measured naively, but if you include in that regression, like a human capital term to, to to reflect education levels, like then, then it wouldn't rightChapter 43 59 sec
good it's a good concept for thinking about two things bound up together. One is technology and the other is the quality of institutions, and those are the two things that if you improve them, then, then your output, given a certain basket of inputs is going to is going to be higherChapter 44 59 sec
while things like integrating it and figuring it out, then big increase in, in, in, in TFP and GDPChapter 45 59 sec
and, and that's, you know, it really still hasn't shown up in the productivity statistics. It may still be coming, but he would argue. Yeah. There's just, you know, we've, we've eaten all the low hanging fruit, like there's no more great inventions to be hadChapter 46 59 sec
price reductions. Right? So I've, I'm really bullish on geothermal, I think like 10 years from now. It's totally possible that we would have you know, sort of a geothermal boom, the way we had like a shell boom, rightChapter 47 59 sec
don't get sick as much. Right. Well, that manifests as lower real demand for healthcare services. Right. So, so it's like, you don't even go see a doctor until like you're 90Chapter 48 59 sec
you know, other, other kinds of technicians or, you know, whatever. And, and, and those people would produce things in their new roleChapter 49 59 sec
we, we, again, it's, it's kind of like the FP, right. We infer it. So we, we sort of And we estimate nominal GDP based on just how we, how we spend, how people are spending their money and how quickly they're spending it and so onChapter 50 59 sec
time is unpaid, right? Like, like or that, or that you almost get for free. So like you know, if let's say, let's say open a designer, like an open source video game or something like that. And like, everybody loves it and it gets super high quality leisure time out of itChapter 51 59 sec
Yeah. That makes a lot of sense. Changing gears again make the case for airships air shifts. Yeah. So I think you know, you have. Cargo that is, there's basically two modes that you can take cargo on today. You can take them, put them on a 7 47 freighter, let's say, and, you know, get them to the destination the next dayChapter 52 59 sec
And so this is, I think the mistake that everybody's made when designing airships is, they're like, okay, we're going to design this cargo Airship to take like 10 tons to remote places. Well, no, you should be designing it to carry like 500 times, right. Because there's a square. Rule. Right. Right. If you, if you if you increase the length by a certain percentage, the, the volume increases by that factor to the cube, to the cubic power, through the third power and the the surface area and that the cross-sectional area increases by that power or that factor squaredChapter 53 59 sec
at a timeChapter 54 59 sec
gauge changes several times between there and the port. And every time the rail gauge changes, like you would have to like pay a bribe to somebody to like move it and stuff like that, like just do their jobChapter 55 59 sec
yeah, you could serve that market, but even better if you design it for a 500 ton model. So, so anyway, that's, that's sort of, my view is like, this is a missing product that we should haveChapter 56 59 sec
And then another question is like, could you use hydrogen as a lifting gas?Chapter 57 59 sec
you are. Yeah, let's say you can get 5% of the cargo of the container market, not the bulk cargo, like forget the bulk cargoChapter 58 59 sec
gates at a certain scale. That would make it very hard to sort of like ramp smoothly, I think is like, it doesn't, it doesn't work with a small airstrip. Like you can't do like a half size Airship and expect to be competitive or like a small company evenChapter 59 59 sec
long or as little time as you want to, to answer themChapter 60 59 sec
accomplishChapter 61 59 sec
the, the gray eminence. Yeah. The person behind the scenes who are, who's like really, really influentialChapter 62 59 sec
Like that's who I pay attention to. A lot of the time. Yeah. Yeah. That's that's fair. And I guess just like finally what are, what are some, we've talked about some of them, but like some unintuitive blockers for your favorite technologies, unintuitive WalkerChapter 63 59 sec
And, and, and sort of like the conversation like went to like, well, why can't we just change the, you know, the Overland bed? Like, why can't we do it?Chapter 64 59 sec
so, so yes. And so, so under so last year there was a rule change in NEPA, sort of in the implementing regulations that said that if you don't have data, that is okay. You just have to say, you don't have the data in the environmental impact statement. That's supposed to be enoughChapter 65 59 sec
line in the regulatory codeChapter 66 59 sec
transition pretty quickly here to electric fuel. And that is going to significantly improve air pollution. And we're going to get, like, I think all these unmeasured benefits from, from cutting out, you know, especially the diesel emissions are the worst onesChapter 67 39 sec
You've really have taught me a lot. And hopefully it will push more, more of these things forward. Well, it's been super fun, Ben. Thanks for having me