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!

Alaska Floatplane: AVAILABLE ON KINDLE

Monday, December 10, 2018


A utopian, ubiquitous and altogether subversive  ideology defines an economic framework called globalization. Not unlike the communist revolution that evolved into something else, Globalism defines a  battleground, exploited by international banking, multinationals and hostile governments.  Since 1973, economic, cyber and military warfare deplete US wealth, health and lives in a war that few acknowledge.

A long history of diplomacy suggests that foreign policy seeks the goal of balancing the opposing powers of competing nations. Today, three countries vie for economic, cyber and military dominance – resulting in a two against one conflict. The economic framework of globalization and its ideology undermines the rational and necessary strategy for the very alliances that can balance the opposing forces.

For instance, congress and the media thwarted Trump’s attempt to befriend Russia as a balance against China’s military opposition in confronting N Korea. Instead the administration embraced China with some success but at the expense of  a strengthened alliance between Russia a d China. Now it becomes more difficult to confront China’s economic and cyber warfare with the US. The constitution calls for the executive branch to direct foreign policy, yet the media with the most powerful propaganda machine ever devised, attempts to dictate foreign policy and undermine the executive branch. Not good.

Thursday, December 06, 2018


Economists offer no proof that globalism turned out anyway other than a total disaster, yet insist upon fixing it once again. Furthermore, economists insist that Trump's policies are a step backwards into a world that will never return offering no proof that the peoples solution - by the democratic process - is not in fact the only survivable course. In twenty years we will wish we had listened to Sanders and Trump.

Further to that assertion, economists refer back to an accounting formula: S+(m-x)=I+(G-T) where  S - domestic savings, m - imports, x - exports, I - investments, G - government spending, T - treasury revenue.

In brief, the trade deficit equals the difference between investments and savings, meaning the trade deficit results in USD out-there in the rest of the world, available for investment back into the US. Economists name this accounting equation as an "identity," which seems to mean created by god and un-refutable, available capital on the left and demand for capital on the right. The explanation continues that the deficit amounts to borrowing capital for expanding productivity and growth citing an association between trade deficit and prosperity. Presumably,  productivity would earn a return greater than the cost of borrowing. Neither interest on the national debt or Treasury bonds fuel productivity. Some capital improvements might.

It would be a faint cry to point out that an association between prosperity and trade deficit does not prove a cause and effect relationship, and if it did, which is the cause and which is the effect -- a common consideration in medicine but apparently not in economics. The scientific method is remarkable for its absence.

The sacred formula, or at least those citing the virtues of a trade deficit, fail to account for the movement of capital. Rather the equals-sign in the above equation should be an arrow pointing to the flow of liquidity from the domestic market to the investment side of the equation in order to pay the budget deficit and the investment world of banks, hedge funds and dark pools. In reality, the deficit amounts to movement of capital from the 99%, on the left of the equation. to the enrichment of the 1% on the right, a mechanism that has yet to be explained by the champions of globalism.

Thomas Piketty in his book, Capital, describes the unsustainable consequences of capital growth exceeding income. No matter what economists do to repair globalization, this transfer of wealth, and its sequestration, will persist, draining free capital away from the consumer market resulting in stagnation and rejection of globalism by the masses. The opinion against globalism would be 99% but for the continued claim by academics and media that it was all for the best.

What's worse, economists still underestimate the true damage that has already been done over 45 years of this obsession. We are becoming a third world nation:

Lower level of education than the rest of the OECD, organization for economic cooperation and development with:
Worst longevity
Worst public health yardsticks
Highest incarceration rate
Highest HIV rate
Highest poverty rate
Highest obesity rate
Highest teen age pregnancy (and illegitimacy rate)
Widespread suicide and depression (tattoos and piercings)
Greatest drug and alcohol abuse
Furthermore, we appear to have the longest work hours, multiple jobs, both parents working, poor management of children and discipline, loss of civility, denial of citizenship, denial of democratic principals, widespread violation of law and rejection of cultural mores.

The Fed has pored vast sums of money into the system, but most of it finds its way into the hands of the 1%. The GDP is growing, but with very little velocity (M1 x Velocity = GDP) The velocity, call it energy in the GDP remains at a record low.

Emphatically, globalism cannot be fixed; its structurally flawed; it should go the way of colonialism and communism, not a step backwards but forward with a commitment to fixing the environment, education, health, banking, trade and infrastructure. Strengthen our democracy. Teach citizenship and parenting. Restore the rule of law and our commitment to democracy.

Tuesday, November 13, 2018

GDP, a multiple

A nation is not made wealthy by the childish accumulation of shiny metals, but is enriched by the economic prosperity of its people.
Adam Smith

 “‘(GDP) does not allow for the health of our children, the quality of their education, or the joy of their play... 
“‘It measures neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.’”
 Robert Kennedy
§          Economics defined by one economist, is the allocation of scarce means to the alternative end with the widest margin -- or lack of so doing because there are a thousand reasons not to do what the numbers tell you to do. For instance: lack of understanding, political correctness or a competing priority such as war. -- In any case economics is the process we live by: our home, our business our government and all of those things combined. Tradition, common law, and politics define the framework of an economy, a framework of culture, of civilization — a means of cooperation and an insulation from the violence of a more primitive, no holds barred, survival by tooth and claw existence.

§          Economists study this structure of cooperative interaction, some as political economics, historical economics or statistical economics. Many if not most economists report their views, unfortunately, with a political bias. Historical data tells the more evidence-based story. The US Borough of Economic Analysis, BEA reports economic performance as Gross Domestic Product, GDP, often in terms of percent growth. Looking at only the percentages of growth or shrinkage can create a bias as well. The money supply multiplied by the turnover of money (economic activity, person to person, person to business etc.) defines the GDP, and the GDP is reported by year, by country and by percapita GDP.

§          Business and government look to the GDP as a measure of the strength of the economy. Gross Domestic Product, M1 x V = GDP, a product, circulating money multiplied by the number of times it changes hands in a given period of time, the velocity or turnover rate of domestic trade. The velocity or turnover reflects the energy and health of the economy; it has the greater impact on the product. No-one pays much attention to the turnover rate. That's a mistake because that multiple correlates with productivity and that energy you feel on the street, liquidity times velocity, and that velocity correlates with people's perception of the economy. Velocity also correlates with productivity and liquidity which furthermore correlates with discretionary income. 

§          Energy may also better correlate with those things Kennedy said that GDP did not reflect: children’s health, education, the joy of their play etc. — with optimism instead of depression.

§          The stock market and GDP correlate rather better with the wealthy one percent's perception of the economy while the multiple (velocity, turnover rate) correlates more with the people's experience. 

§          Until recently, our GDP was flat; adjusted it was in slow decline. Economic growth did not keep pace with population growth. For a simplified look at present reality, compare year by year the money supply expressed by the M1, with the GDP and the resulting calculation of velocity, a number not generally available. Note the dramatic drop in velocity in recent years despite an increase in money supply controlled by the Federal Reserve. The energy is not there and you can feel it on the street: depression, obesity, homelessness, drugs, crime, poverty, shootings, malnutrition, and ill health, not to mention a loss of civility. 2018 should be interesting. — disappointing

Figure 1.
Year    GDP(t)      M1(t)    Turnover       Per Capita GDP
2018.  18.67.  3.7277.    5.01.                    $62,872
2017.  19.39.  3.5640     5.44                       60,035
2016,  16.49,  3.2446 ,   5.08                      57,467         
2015,  16.47,  3.0873 ,   5.33                     51,486
2014,  16.15,  2.9212 ,   5.53                     50662
2013,  15.76,  2.6414 ,   5.97                     49849
2012,  15.38,  2.4586 ,   6.26                     49481
2011,  15.19,  2.1618 ,   7.03                     48775
2010,  14.94,  1.8600 ,   8.03                     48374
2009,  14.54,  1.6965 ,   8.57                     47576
2008,  14.58,  1.6034 ,   9.09                     49365
2007,  14.99,   1.3711 ,  10.93                   49980
2006,  14.72,  1.3849 ,   10.63                   49575
2005,  14.37,  1.3869 ,   10.36 
2004,  13.95,  1.3900 ,   10.04 
2003,  13.53,  1.3025 ,   10.39          
2002,  12.96,  1.2187 ,   10.63 
2001,  12.71,   1.1824 ,  10.75 
2000,  12.69,   1.0896 ,  11.65 
1999,  12.32,  1.1265 ,   10.94 

1998,  11.77,  1.0916 ,   10.78 
1997,  11.21,  1.0714 ,   10.46 
1996,  10.74,  1.0707 ,   10.03

Fig. 1 Note the rising per capita GDP interpreted as evidence of prosperity, however, per capita GDP is not uniformly experienced. With 99% of the wealth in the hands of the 1%, this growth applies exclusively to the wealthy. With increasing percentages of the money supply locked up in the hedge funds of the wealth. Furthermore, with growing undocumented populations, it is difficult to calculate the per capita GDP for the 99% of US population. Furthermore, population may be quite understated with 3.4 million living on the street: illegal immigrants and tonally unknowns. 
A much better reflection of the present economy for the average American is seen in the sustained fall in the turnover rate of money, the velocity, from 10.93 in 2007 to 5.08 in 2016.

§          I recall crossing the Irish Sea from Liverpool to Dublin in the late 80s. The contrast could not have been greater. The streets of Liverpool were dead with a few "punks" sadly idling on street corners. Dublin was full of energy, crowded, with palpable energy - even young urchins attempting a pick pocket; the energy with which they fled thin print dresses flapping behind reflected a joy. Ireland, in a relative short time, went from a depressed economy to one of a leading Western success stories, today with a huge trade surplus and a GDP growth of 23%. You can feel the energy on the street, it’s a reflection of velocity of money, turnover rate, the multiple in the GDP. You can see the same progress in Ireland’s health care, leading the western world in quality by the same statistics that rank the US 34th.

§          The GDP numbers shown, appear to increase steadily over time, but the adjusted GDP shows slow decline. The striking increase in M1 money supply since 2010 reflect Janet Yellen's credit easing in an attempt to stimulate the GDP/economy. Are the banks not lending, or do consumers and small business prefer to pay down over leveraged debt? Low interest rates were good for big business, not so much for the consumer (12-24% credit cards) Any attempt to stimulate the economy must work with one or both sides of the equation, money X velocity = GDP.

§          The Fed. Is limited in its ability to stimulate the economy with low interest rates. You can’t go much lower than zero. The fed can only go so far in printing money or credit easing. The Fed should look instead, or additionally, to a stimulation of the velocity. Now we are talking liquidity and productivity, but on the consumer side of the market. The biggest missed opportunity was the subprime mortgage crisis. During the Bush administration, investment banks managed to get a law passed eliminating bankruptcy protection for homeowners and student loan recipients, setting the stage for yet another banking crisis -- the third in a generation. Fraudulent loans were foreclosed, the bankers having sold the mortgages got rich and the end mortgage holders, the big investment banks were bailed out by the taxpayer. The missed opportunity was for the government, not to bailout the end mortgage holder (big banks and hedge funds) declaring the mortgages invalid andthus 1. allowing the homeowners to remain in their homes 2. with a windfall gain from the canceled mortgage. 

§          This harsh strategy would have first of all punished the bankers Ponzi scheme, and secondly amount to an infusion of capital, taken from the ill gain of the wealthy banks back into the consumer side of the market. Thirdly such a strategy would have prevented many of the 3.4 million now living on the street, refusing to work because their pay checks would be garnished by the banks. 

§          You can paint the same story for student debt, dropouts with high debt, no way to pay it back, no bankruptcy relief and no employment not even counted as unemployed living at home or on the street as an escape. If the government were to cancel the debt, or reinstate the option for bankruptcy relief, it would: one, allow the former students to work, that’s pure productivity and two, put energy back onto the street and yes, at the expense of the debt holder, but they weren’t getting paid anyway -- there may be another tax payer bailout and that’s not productive, It’s all about supply and demand, liquidity on the consumer end of the market, a liquidity lost by the trade deficit, lost jobs and lost manufacturing. 

§          A number that I follow for investment purposes is the Daily Treasury Statement, which lists the treasuries’ revenue by day, by month to date and year to date. The two day % growth year-over tends to correlate rather closely with short term stock market movement. In a sense that number represents the available discretionary income of investors. (may also reflect consumer market liquidity as well, purely conjecture)

§          Tracing the unforeseen consequences of globalism involves multiple interwoven threads. Gaining any quantitative, statistical or proven facts eludes all but the best of our statistical and historical economists. The political correctness of globalism in institutions of higher learning and in the “deep state” silences the political economists; they are not talking for fear of their reputations, their tenure and their jobs. One might add advances in technology and robotics displacing jobs and certainly the higher tech workplace requires more education. Also, vast numbers of service and support positions were outsourced to India and even the Philippians. Fifty years of cold war; war with Vietnam, lead to a liberal rejection of American institutions, favoring international interests and a new world order less sympathetic to the welfare of our own citizens and the stark consequences of that global priority. Additionally, the accumulation or 99% of our wealth in the hands of the so-called one percent -- a condition reminiscent of the monarchies and aristocracy preceding the Industrial Revolution and the American Revolution – sequesters capital unavailable to the consumer market. The most sacred cow, however, remains Globalism with a trade deficit of 800 billion a year eroding our domestic liquidity and wealth – a lost wealth that is in no way replenished by direct foreign investment. 

§          Furthermore, the increased money supply engineered by the Fed went to the banks to lend, not to the people but tofavored customers.The banks make more money with high credit card interest and investment banking than in affordable consumer loans. To give it to the people, as one economist said, you would have to drop it from a helicopter. The recent rapid growth and resurgence of small business will go a long way towards fueling the discretionary liquidity on the consumer side, but the ongoing drain on market liquidity remains unsustainable, further inhibiting the velocity (multiple) and our quality of life. Big business and Banks are nowhere without a high energy and healthy small business and broader home market. Globalism cannot achieve its multilateralism or its liberal democracy without first a healthy home economy.

Saturday, November 03, 2018

Fifth Column

Polittical dogma from extreme left wing media poses a 5th column of international interests hostile to our own and a threat to our democracy. Much of the dogma and political correctness comes from the Trilateral Commission, the CFP and finds fertil ground in the reminants of anti-Vietnam protests and the brain washing of educators and young people. 1

The Trilateral Commission includes a majority vote from Europe, Asia, Canada and Mexico. No wonder they don’t want to see us change our one-sided trade agreements. Founded by Rokafellar, along with Carter and Brzezinski in 1973 for the purpose of promoting multilateral cooperation, international banking and peace, encouraged by the success of the EU, the Commission set about to discourage nationalism in favor of internationalism with a wealth that so exceeded that of member nations that this organization of international elites would capture world power, an undeniable ethical high ground and international control.

Members of the commission must resign when taking government positions, and indeed they did. The  executive administration of every presidency since Carter, both left and right, excluding the present, included a majority of former Commission members -
- a shadow government. No wonder they are so angry.

“You can have globalization or democracy but not both” Where are Earnie Pyle and William Sheirer when we need them most?
 1 Fifth Column was a WWII book alluding to Natzi spies, sabaturs and symphatizers

Tariff the most Progressive Tax

Like it or not, tariffs have the potential to force a massive shift in liquidity from the supply side to the consumer market. it's a win-win in that if the buyer pays the tariff, the government tax revenue gets a huge boost. and if the consumer makes an alternative purchase of an American-made product, it's a giant infusion of liquidity into the consumer market at the expense of the importing/outsourcing company -- progressive in either case.

Thursday, November 01, 2018

Liquidity and the Current Market

Revenue for the US Treasury comparing year over numbers, correlates with investment market liquidity, not perfect, increased by corporate buybacks and deminished by new IPOs —- The Daily Treasury Report,

I have a hypothesis that the tariff will stimulate the economy rather than slow it down. Seems counter intuitive, but there is a history of tariffs and strong economies, and there appears to be a scenario wherein alternative, more local purchases, due to the high tariff might result in an infusion of liquidity into the consumer market. There would be winners and losers, but the winner should be the consumer while the looser should be the multinational importers and offshore manufacturers. If the impact of the tariffs plays out that way, it would be a flow of capital away from the 1% back into the consumer market.

As of October 31, the end of the first month of the government fiscal year and the first month of the tariffs, the withholding and personal tax collected over the month increased by 2% while the excise tax (tariffs) increased by 9%, hardly a support to the theory, but it’s too early to see a change with all the inventory in the supply chain. The true measure of the consumer economy should be reflected in the personal withholding and taxes paid. If consumer alternative spending does indeed pick up, the personal withholding and taxes paid should pickup as well, while excise tax collected should fall off, and imports as well. The good news would be a giant infusion of liquidity into the consumer market. The bad news would be big business loses, and probably a fall off in the stock market. It would, however be a transfer of capital from the 1% to the rest of us, a feat that has been hard to arrange both recently and historically.

Imports for August were 262.67 billion with a trade deficit of 53.2 billion. (The lack luster 2% gain in personal tax revenue also correlates with the October stock market correction.) Stay tuned into the DTS, the biggest game in town, supply and demand.

Friday, October 19, 2018

Political Education

Elitists subvert Democracy in a number of ways but none so much as with education. Educators should give students the literature to read, Western Civilization for instance, and the freedom to draw their own conclusions. Test them on content, not their conclusions. This should be preaching to the choir; however, it may no longer be so. The political agenda of the CFR and Trilateral Commission so infiltrate the education system that even economists, who see the current failures of Free Trade and Globalism, fear for their jobs in saying so.

Saturday, September 22, 2018

Tariffs and Consequences

Socalled experts continue to predict dire consequences of a trade war, tariffs in particular, but without objective evidence or credible theory. The models used by economists in support of globalization clearly predict the separation of wealth, loss of jobs and poverty but apparently underestimated the damage and the extreme concentration of wealth. Only history and objective evidence will tell the final outcome. 

Discounting the apparent strategy to use tariffs as a chip in renegotiating deleterious trade agreements, there already exists a history of tariffs associated with thriving if not improving economies. We hold a clear numeric advantage in these negotiations. All the pain occurs on the supply side hurting big business and big banks while releasing a surprisingly large dose of added liquidity directly to consumers and small business. The even greater effect might arguably be attributed to the multiplying effect of that added liquidity as it turns over multiple times within the economy, potentially trillions with the present trade deficit -- a thing that cannot happen with the purchase of foreign goods or at least not to such an extent, 

Below, an estimate of this year’s trade illustrates a decrease in both imports and exports resulting from a trade war. Even an unbalanced difference based on decreased price elasticity of demand at the higher prices, reduces the trade imbalance releasing in maybe over half a trillion added dollars into the consumer market and into the hands of those most hurt by the present structure of global trade. The added liquidity representing purchase dollars spent elsewhere due to the tariffs, then multiplies (GDP=velocity/multiple times the money supply) currently 5 or more times to give the GDP a multiple trillion-dollar boost. 

Of course, it won’t work out exactly that way, it never does. There are many other things going on, but this one is neglected. Only history will tell, but the consumer’s alternative spending due to tariffs infuses, none the less, an enormous liquidity where it’s needed the most, in the consumer market. 

The status quo helps only the oligarchs, investment banks and multinationals, perhaps also economists and pontificators who want to keep their jobs.

Trade Deficit in Goods-only with contributing consequences of 25% tariff both sides
actual 2018
in billions
(an uncertain guess)
7 months
12 months av
Elasticity, PED
  + GDP
added liquidity consumer market*
lost reveue mult nat corporations*
  + Liquidity =
Elasticity = % change in demand / % change in price
* a passive redistribution of wealth
velocity/multiple  = GDP / M1 =  20.412/3.657.7 = 5.5805

Tuesday, July 03, 2018

Next Disruptive Technology

Beyond technology and beyond medical, CRISPR DNA error correcting applications promise the most profound advancement in curing disease since the advent of molecular medicine. If you are looking for the next greatest thing, here it is. The three cutting edge equities carrying forward the research and early clinical trials, I call them the Three Amigos, already show double and triple fidget growth: Crispr Therapeutics, CRSP; Intellia Therapeutics, ITLA; and Editas Medicine, EDIT.

Monday, June 18, 2018

Trade War

Political economists cry the sky is falling. The stock market shrugs it off, so what can we expect from our imposition of tariffs?
To understand what’s at stake, consider 20 years of unsustainable trade deficits of up to 800 billion a year and beyond stripping the consumer market liquidity not to mention jobs and manufacturing. These same political economists say, the deficit does not matter; we make it up with low cost imports and greater efficiency overall — globally yes but not for us. Greater foreign investment back into the US, less by our adverceries, go all to the oligarchs, but forget all that, what will higher tariffs do to the economy that most of live in?
Short term, expect some dramatically higher prices and stress on US export businesses, mostly the big guys but some small business and farmers with an equally dramatic increase in government revenue from the tariffs. Job creation might be equally dramatic, and the results are probably inflationary.
Mid term and long term, however should see an equally dramatic flood of liquidity back into the consumer market. With the scramble to meet consumer demand with locally manufactured goods and services the energy level should be high as well. Liquidity and energy, turnover of discretionary capital, are the driving forces of the economy. History bears this out.
Furthermore tariffs are not forever. If  used to achieve balance and fairness, relaxation can follow.
Lastly, we can’t loose. We have been providing capital to the developing world. There will never be a thinks, but there is no choice, lest our democracy morph into an oligarchy and we become a third world nation.

Wednesday, May 30, 2018

Med Chest

Chest Physicians and their Thorasic Surgery counterparts, once the backbone of medical care, now displaced by Radiologists with their CT scans and needles, Cardiologists with their catheters, Pulmonologists with their respirators and Allergists with their skin tests, nonetheless remain the Super Physicians of our day. These are the long coats with a rose in the lapel or the physician who still wears a tie and does not have a stethoscope around his or her neck. If you need help, physician or patient, you would do well to find one, at least for a consultation. (Opinion)