Hughesair (Inflection Point)

Retired physician and air taxi operator, science writer and part time assistant professor, these editorials cover a wide range of topics. Mostly non political, mostly true, I write more from experience than from research and more from science than convention. Subjects cover medicine, Alaska aviation, economics, technology and an occasional book review. The Floatplane book is out there. I am currently working on Hippocrates a History of Medicine and Globalism. Enjoy!

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Location: Homer, Alaska, United States

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Thursday, July 16, 2020

Capitalism & Adam Smith

Capitalism has been magical for creating wealth and opportunity for the US especially in its ability to attract venture capital and finance innovations and big ideas. The down side comes with the implied shareholder mandate that corporat management choose the most profitable alternative with the widest marginal return for short term gain, often without regard for labor or moral outcome. Taxation as a remedy and over regulation, choke off the magic of corporate growth and competition while doing little for the shareholders, employees or customers.
            In the long run, however, employee safety, security, and prosperity translate into high moral, productivity and profit. The same can be said for customers. In the long run, fair pricing, quality product and customer service translate into loyalty and market sustainability. Unfortunately, short term greed often gets in the way, especially when corporations and the economy are stressed by foreign exploitation and internal capital divergence. Balance is everything.
            Advocates of unregulated laisse faire competition -- the magic hand of self-regulation -- often refer to Adam Smith and the implosion of the Russian empire in support of deregulation while a wave of socialist rebellion demands crippling taxation on corporations and an égalité’ without the means and the productivity to sustain it.
            We can probably achieve the required balance with a common culture and a common will -- but probably not with multi-culturism and open conflict, some food for thought.
With permission from Globalization or Democracy, available soon.
“Adam Smith (1723-1790) was the epitome of the absent-minded professor: introverted and deeply analytical, he exhibited unusual habits of speech, gait, and facial expression, talked to himself since childhood, painting a familiar persona of semi-autism. Smith was born in the county of Fife, Scotland, his father, a senior solicitor and judge advocate, died two months after Adam was born. Raised by his mother, Smith never married but for his intellectual associations. Entering the University of Glasgow at age 14, Adam studied moral philosophy, graduated 1740 at age 17, and entered graduate studies at Balliol College, Oxford with a scholarship. Smith begin public lectures in 1774 and in 1751 earned a professorship at Glasgow; he published The Theory of Moral Sentiments in 1759, a morality based on empathy, earning a professorship at Oxford.
            In 1763 Smith left his prestigious professorship at Oxford for twice the pay to tutor the nephew of Charles Townshend; in that capacity he traveled to France, was a companion of David Hume, years his senior, and met Voltaire and Benjamin Franklin. Smith become more interested in economics and the tension between a free market, laissez fair and mercantilism, drawing a distinction between productive and non-productive labor, a distinction between agriculture and manufacturing versus the employment and consumption of the nobility and the church, the so-called Bourgeois.  That same distinction might be seen today in the employment and consumption of the so called 1%.
            In 1766, Smith's tour as a tutor ended and he returned to Scotland, spending the next ten years writing The Wealth of Nations, wherein he advocated a division of labor between nations, and argued the theory that rational self-interest and competition created a self-regulating economy, an invisible hand that would guide the economy to prosperity. The theory included free trade between nations, wherein each nation's resources and skills could be optimized for the mutual benefit of each. One nation's production might favor agriculture while another silk or textiles, and yet another pig iron and manufacturing. Wealth of Nations was researched, detailed and written in such extraordinary depth as to remove all doubt. One tends to remember only the invisible hand of enlightened self-interest and interpret it as justifying greed.
            The Wealth of Nations, published in 1776: the year of the American Revolution, impacted the world with a view whose timing and impact was profound. Thus, ended an era of mercantilism, dominated by nobility and church. However, the industrial revolution which followed replaced the nobility and the surf with an oligarchy and an exploitation of labor, crueler than the agrarian serfdom that came before.
Indeed, industrial productivity created great wealth and economic mobility for a new oligarchy, along with greater and more open competition. This new economic framework, called classical economics, favored productivity, division of labor over accumulation of gold and silver but brought with it an exploitation of labor, a poverty that grew in proportion to the growth in wealth. Smith was a moralist; he would not have condoned the extent of poverty. Smith addressed these issues but in difficult terms—perhaps his was an assumption of a pervading moral ethic that would contain the excesses. His caution was there, however, if you pause to read it. For instance, in the First three sentences from Wealth of Nations Smith writes,
The annual labor of every nation is the fund which originally supplies it with all the necessities and conveniences of life which it annually consumes, and which consists always either in the immediate produce of that labor, or in what is purchased with that produce from other nations. According therefore as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better of worse supplied with all the necessities and conveniences for which it has occasion. But this proportion must in every nation be regulated by two different circumstances: first, by the skill, dexterity, and judgment with which its labor is generally applied; and secondly, by the proportion between the number of those who are employed in useful labor, and those who are not so employed.”
If you read only the first two sentences and do not read the third, you miss the essence of Smith’s caution and concern, a concern re-echoed in his third edition and in his other book, The Theory of Moral Sentiments, 1759, last edition 1790. These later works came during the period of the Scotch enlightenment, focusing on the morality of free trade, “The Real Adam Smith, Morality and Markets” video [1]
            Unfortunately, Smith’s economics, broadly misapplied as classical economics, and the Industrial Revolution, did not lead to a sustainable égalité but became the seed of revolution. Smith, in his last edition, rejected unbalanced free trade and expanded on its problems in his later book, Theory of Moral Sentiments in 1790. Meanwhile in America, the revolution, unlimited land, natural resources, and expansion, prospered with this new formula of free-for-all business and competition. Even today with the failure of Russia’s Communist model, Adam Smith paradoxically reemerges in the US as the gold standard for the classical model, of laissez-fair capitalism.[2]
            Those who view Adam Smith’s Wealth of Nations as a magic bullet for free trade and unrestricted capitalism and prosperity should read the 5th edition (1790) and his final edition of The Theory of Moral Sentiments (1790), the year of his death.[3]

[1] The Real Adam Smith, Johan Norberg, a video on YouTube and Amazon,
[2] Bridging Adam Smith’s Theory of Moral Sentiments and Wealth of Nations John Dwyer, “Journal of British Studies” Oct 2005, pp-662-687

[3] Journal of British Studies vol 44 #4, Bridging Adam Smith’s Theory of Moral Sentiments and Wealth of Nations, John Dwyer, Oct 2005 pp 662-687

Friday, July 10, 2020

M1 Money Supply

      From October 2019 to May 2020, the M1 grew from 3.9345 to 5.063 trillion dollars, a 28.68% increase.
      The COVID19 stimulus took several forms, some as direct distribution through the IRS. That direct distribution at least went to the buy side of the market. Treasure’s repurchase of bonds, however, flooded the investment market with liquidity. The stock market response is obvious. Given an unchanged valuation of equities, their diluted-dollar value continues higher and will continue to do so as long as credit easing continues.
      Estimated GDP2020 20.140 trillion, divided by M1 5.063 = velocity or turnover rate of only 3.98. So, despite the liquidity in the stock market, the economy is turning over at a very sluggish rate.

Tuesday, July 07, 2020


          Many will have forgotten, and many more weren’t born yet, but our present relationship with China both strategically and political closely resembles the appeasement of Nazi Germany before WW II. Business ties with German manufacturing and profitable trade influenced an attitude in business and the MSM favoring the efficiency of the totalitarian system over the chaos of American politics. Many went so far as to praise totalitarianism as the way of the future. Much of that popular believe was driven of course by German propaganda and what we called a fifth column of German nationals and spies.
            Russian propaganda did not stop with the Cold War. We now have Leftist propaganda from China adding to the cry and complicating our thinking by further promoting animosity between us and Russia. While we look the other way sanctioning Russia, China: picks our pocket, and more importantly strengthens the bonds between China and Russia and the triple alliance between N Korea, China and Russia.
            Now, as China faces financial problems internally, the CCP resorts to old fashion pillage and plunder through the South Pacific and its Asian neighbors. Our response from investment banking to the Oligarchs and multi-nationals resembles that before WWII, with appeasement, business as usual and a commitment to continuing profitable trade no matter the cost to others or the consequences to ourselves.

Tuesday, June 30, 2020

Hate and illigitamacy

We have raised a generation, taught the lessons of the Vietnam protests, a generation of fatherless children, raised by teachers, mothers working and little if any home guidance. No wonder, hate, rioting and sexual dysphoria became the default setting for so many, and with limited education, discipline and citizenship, there was little chance to recover.

A hundred years ago illegitimacy was recognized as a problem; it was printed on the child's birth certificate. The churches discouraged divorce as well. Eighty years ago Toynbee studied and wrote about the failure of 26 civilizations. Each civilization grew to meet its potential and failed due to some basic flaw in its nature.

Fatherless children may be our own downfall. How can a child grow up to know how a man respects and deals with a woman or how to deal with men if he or she grows up fatherless. There is a reason nature gave us two sexes and a relationship between them. Even the birds grasp this fact of nature. Without that basic accommodation we sentence our children to a life of violence and hate and ultimate loneliness.

Saturday, June 20, 2020

Liquidity June 18, 2020

As of 6/18/20, Treasury reports tax revenue of 2.090 trillion versus 2019 revenue for the same date of 2.268t, a 178 billion short-fall.

The Treasury revenue serves as a fairly good proxy for liquidity in the market. The 178 billion short-fall suggests a liquidity deficit on the consumer side of the market. The COVID19 reliefs from the Fed went in two directions, to the consumer by way of the IRS and to the supply side by way of quantitative easing to banks and the supply side.

Three trillion went to tax-payers by way of the IRS. Personal  income for April 2020 reflects that distribution.

2020.                            Jan.            Feb.            Mar.            Apr
Personal Income.    19.018t.      19.122.        18.709.        20.675t. (Otherwise 17.675)
Fed COVID Response Program                                          3.0t
Discretionary PI.     16.730.        16.881.        16.532.       18.660
Savings.                                        1.391.                              6.149t

Both of the above mechanisms of pandemic economic relief resulted in an increase in the money supply, M1. The M1 contributes just one multiple to the GDP, which is a product as its name implies. The other multiple, the more important one, is the velocity, sometimes called the turnover rate or just multiple. Economists don’t pay much attention to the velocity and that’s a mistake. GDP/M1=velocity, the rate of turnover or churn of dollars over time. The turnover better represents the energy in the economy. It’s the energy you feel on the street or in the stores. Velocity is the economy of the street.

Yr.         GDP.       M1.        Velocity
2020.    21.34t.     4.8173.    4.23
2019.    21.54.      3.92.        5.49
2018.     18.67.     3.73.        5.01

2007.     14.99.     1.37.       10.93

The Corona virus and our shut down severely arrested the velocity in our economy. It will be interesting to watch the recovery. The Fed struggles to protect our economy by various means. The Fed, however, can go only so far in reducing interest rates and adding to the M1. The interest rates help both the supply side of the market and the consumer side indirectly stimulating velocity. The addition to the M1 through quantitative easing, however, helps only the supply side. Redistribution of Capital through the IRS went to the consumer side. In that regard, the IRS reliefs checks were a very good thing but no substitute for jobs.

You can follow the liquidity numbers daily on:
Or the BEA at:

Thursday, June 04, 2020

Book Globalization or Democracy

I’ve spent the last few years writing my book, Globalization or Democracy, and in a sense the work was a rewrite of my life’s goals. Prior to the Korean War, I was in my senior year at KU with a major in economics and a pathway to graduate school in the East to study international commerce. I had a fascination with the macroeconomics of trade. I knew about business and investments along the Mississippi, growing up in St Louis and about wheat from high school and college in Kansas and, on occasion, the wheat harvest. Jon Ise was the highly respected economist and professor at Kansas; his grass roots economics and the extensive, required two-year Western Civics course, left an indelible impression.

Half-way through my senior year, the Chinese crossed the Yalu River, and I was not quite far enough along in credits to be exempt from the draft. I joined the Air Force with the intent to fly. It did not work out quite that way. I got married. Son John came along and I followed my father's and my brother’s path into medicine. I never quite got over the economics, however, and for that matter the need to fly.

After retirement, what was I to do but move to Alaska and fly a seaplane charter operation for ten years, the best ten years of my life, and after that with a 50 year Emeritus for medical practice from the University of Michigan, I wrote my book on economics.

Economics was there all the time, the grass roots fundamentals of supply and demand. It was there as I hung my shingle in Littleton, CO, and as I managed partnerships, two incorporated clinics, and a rural community health clinic in a remote Colorado cattle town. Supply and demand and liquidity was there as I ran a single pilot, part 135 air charter company in Alaska. Furthermore, an economics education did not hurt me in decades of stock market investing. That past experience, came together as I wrote about the futility, and the threat, of Globalism and the CCP lead cartel of Internationalism.

As we wake up in a COVID 19 pandemic, June of 2020, with economic recovery and social chaos, we have only one not so clear choice and that is the Chinese Communist Party’s, Globalism, advanced as China’s new world order or our own freedom. It’s Chinese dystopia or Democracy. You can't have both. Globalism started out as an ideal but oligarchs, multinationals, greed and the PLA soon bent Globalization to their own self interest, while we all contributed.

I’ve attempted to outline the economics that drove the failure of an internationalist dream that goes beyond contemporary economist’s assertions. Always a contrarian, one must see what the market misses. I think, contemporary economists, for the most part, take an idealistic approach of moral equivalency, meaning that just about anything multiculturalism dishes out, should be taken as economic fact. I think economists fear for their reputations, their tenure and their, for the most part, high paying jobs.

In any case, if you read Globalism or Democracy, you will be reading from the path I did not take.  Enjoy

Tuesday, June 02, 2020

Hate, the Sociology and Disease

With the generation of Vietnam demonstrators, fatherless children and both parents working, we created a caldron of social instability. Educators left ethics and morality to the parents, but the parents were not there. Instead of teaching citizenship, teachers taught what they learned from the demonstrations, a philosophy of existentialism and rejection of traditional institutions, respect for the law, discipline and cultural morays, maybe not intentionally but a fertile ground for hate.

Children felt victimized first by distant parenting, encouragement from teachers, and the cost of higher education. Education  was only required to the age of sixteen. US education fell way behind that of other countries, especially our economic rivals.

Many with supportive families, strong networks of friends or an inherent sense of cooperation and compassion create immune globulins against hate; hopefully a majority. Those few that were self driven, embraced American entrepreneurship achieving enormous wealth and those blessed by wealthy parents do well creating an exaggerated divide. Globalization Chinese style, further striped our middle class of liquidity and jobs. Outsourcing of manufacturing further eroded our security.

Poverty, depression, obesity, diabetes, malnutrition became the norm for the minimum wage population. Family dysfunction, fatherless children, and sexual dysphoria added to a further dystopia.

Democracy cannot survive without citizenship, a common culture, cooperation, justice and the rule of law. Apparent murder by A police officer lit a powerful fuse for revolt. This epidemic of Hate may be more destructive than corona virus. The pandemic plus the destruction and looting plus social distancing and distant learning may further deprive young people the opportunity of learning and networking the attributes of success, but worse yet may lead to our rejection of democracy and a weaponized gateway to for of Chinese dystopia.

If we can find a vaccine against hate, it will probably be education and more education for many more years. Embrace teaching of civility, discipline, civics, citizenship, history, music, dancing, sports, math and science. Promote social interaction, clubs, fraternities, job placement, internships, technology, business and finance, multiple pathways for multiple talents and freedom to switch. Make it affordable, challenging and exciting. A little discipline wouldn’t hurt.

Thursday, May 28, 2020

Public Health Authority to Test, Quarantine and Trace Contacts

     Besides the security vulnerability exposed by our COVID19 pandemic, the conflict between individual liberties and Public Health’s ability to test, isolate and trace, re-emerges. A similar conflict plays out as State Governors order continuing shutdown or reopening along Federal and Public Health guidelines or not so. In either case, lock down, contact tracing and quarantine appear to violate Civil Liberties.
     HIV as of 2020 infects 1.1 million of the US. There have been 700,000 total deaths and    presently about 16-17 thousand deaths per year.
     Influenza, on the other hand, infected 41.3 million last year with 57,300 deaths.
     COVID19 so far (5/28/2020) infected 1.7 million with 101 thousand deaths.
Public Health has their hands full with COVID19. Their tools are limited by their ability to test, quarantine, contact trace and treat. HIV initially was uniformly fatal, so there was every reason to use draconian measures to achieve the first three above strategies. Public Health and both public and private medicine, however, were denied the use of quarantine and severely limited in testing by political legislation. That limitation lead the US to lead the World in HIV.
     Our mishandling of HIV, no fault of Public Health, serves as an argument favoring Citizens relinquishing some of their civil liberties to their public health departments for the common good.
PublicHealth appears to be exercising that authority rationally with this pandemic, despite some non compliance among young people. Our liberty is great, and with it comes a requirement for cooperation and citizenship. Public Health needs the authority to evoke these austere measures in any future epidemic without obstruction. Obstruction in this epidemic came from China cutting off both supplies and giving false information.

Friday, May 22, 2020

Election, Globalization or Democracy, The Real Choice


           Globalism Promised a one world economy, which was to create such an overriding business prosperity as to end wars. Globalization would bring competing nations into compliance with world trade and governing bodies such as the World Trade Organization (WTO). What evolved, however, looked more like an Oligarchy and an elitist shadow government undermining our Democracy. Free trade sounds good, in theory, except that it was not free, and the outcome was not good. We exported manufacturing and jobs with far more destructive consequences than even the skeptics anticipated. Furthermore, China’s Communist Party and the People’s Liberation Army waged a twenty-years’ “unrestricted war” against the US and the West with devastating economic consequences for the US and accelerating growth and expansion for China. 
            Demonstrations erupted from the left in Davos and from the right with the tea-party movement and again with the election of 2016. What was prosperity in Washington was despair and stagnation on the street. A heavy-handed countermeasure is in play. With even greater polarization, we now have AOC in one corner, oligarchs in another, and moderates in another, all looking for power, plus the PLA buying influence with politicians and educators from the top right down to the local level. Let’s look at what’s happened and explore what’s at risk.
               Coming soon, publication date a moving target.

Wednesday, May 20, 2020

COVID19 Diagnosis and Treatment

Early diagnosis is confounded by the fact that the contagious condition of this virus precedes symptoms. Therefore, temperature and symptom screening yields false negatives at the point of maximum spread. The PCR test while giving accurate results in the early stage, requires often days for the result. By then it’s irrelevant. The antibody test while the results are quickly available, only tells whether the patient already had the virus and is producing immune antibodies. The on-site, immediate result PCR test is a US new invention needing time for manufacture and distribution.

More important, is the quick staging of this fast moving infection. Stay home and recover from mild cases, risks getting behind on more sever cases, in that sever lung damage is already there by the time the patient recognizes shortness of breath. ICU and a respirator offer only desperate measures with poor efficacy.

The challenge of early diagnosis, monitoring-progression and staging, leading to early drug therapies before the respirator, offers a better promise. However, there are so many mild cases not requiring any treatment, some asymptomatic, that the monitoring will have to be limited to contacts and known explosions. Monitoring might consist of a simple finger pulse oximeter that you have probable seen used in your doctors office to detect sudden drop in O2 saturation.

From JAMA  May 12 , 323 #18 P1825
Of the several antiviral drugs being tested, one works at the entry level, a couple at the attachment level and several at the viral reproductive level. Only three are available in any quantity, the chloroquines and the 2 ACE inhibitors. The specific antivirals are: available in limited quantities from previous or other viral disease outbreaks, imported with questionable or over burdened supply chains, in research only and or extremely expensive.

Another factor inhibits treatment, and that is the FDA and the evidence based medical bureaucracy. In the old days, every physician would have thrown many drug combinations at the problem. limited only by his or her own knowledge, circumstances and bravery. Not today, drugs must be proven by best evidence and approved by treatment guidelines and the FDA. Dealing with massive numbers of desperately ill patients in over crowded ICUs does not lend itself to the rigid stepwise approval, one size fits all, modern system. Better the on-site multiplicity of individual trials limited only by rationality and “Do no harm.” A working combination, or "cocktail," would rapidly emerge. Such might be more scientific as well considering the infinite multiplicity of combinations -- not to discount the systematized in vitro search through millions of drugs done in advanced laboratories and the gold-standard, double blind clinical trials.

The results of clinical trials are about to be released. We will know more for the next outbreak if it’s the same virus and not mutated to another form of drug resistance. Watch out for drug company studies touting  their own expensive drug candidate and the study that somehow belittles any available affordable alternative.
Click the JAMA illustration for the full free summary.