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

Tuesday, October 01, 2019


Liquidity and moral/confidence drive markets. China, Wall Street,  manufacturing down — consumer spending up — what don’t you get about this picture?

Tariffs indirectly but effectively drive liquidity from the supply side to the demand side of the market.   For 25 years or more, the reverse has been true. Our middle class has all but disappeared, much as it did following the Industrial Revolution early 1800s. That lost liquidity made billionaires in Silicon Valley, Wall Street and China., financing Chinas spectacular growth.

Tariffs, while hurting those who profited from the decline of the US economy, have returned a small portion of the American consumers lost wealth.

The ruling class would have you believe that the consumer pays the tariff. Not true, the supply side and indirectly China bear the cost. Alternative purchases result in greater retention of liquidity, which multiplies within our economy.

Wednesday, September 18, 2019

Contrary to the Noise

Wall Street and multinationals complain about Tariffs, because Tariffs reverse Globalism’s drain on liquidity from the middle class, the tax payer and the poor -- to the benefit of foreign interests, investment banks and big business. Tariffs effectively return some of that lost wealth to the people.

Fed chairman Powell reports a slowing of the supply side of the market and an economy driven by household spending. Reassuringly, the Consumer Price Index appears unaffected by the tariffs, also contrary to the noise.

Asymmetric trade had benefited wall street and multinationals by outsourcing manufacturing and jobs, benefiting from cheap labor, at a devastating cost to our middle-class and unemployed poor -- many living in their cars. We had lost a 30-year trade war with China and roughly 15 trillion in overall trade deficit – including Japan and Germany.

Tariffs now provide a partial recovery from that loss, but it will require many years of balanced trade to recover completely from that 30-year loss -- of liquidity drain from the demand side of the consumer market -- from the people.

The Chairman reports 2.5% GDP growth for the first half of the year, 2019; he did not seem to expect even 2% annual for the future. It would require double digit GDP growth to make up for the past 30 years of stagnation during which Wall Street and international interests superseded our own economic health.

Tariffs are good, and are poring added liquidity into the hands of consumers and small business -- a redistribution of concentrated wealth. That added liquidity turns over multiple times within the market, the multiple in the GDP. These are the facts, contrary to the noise.

Monday, August 12, 2019

The Economy and a Bucket of Sand

Some might call it a butterfly effect, wherein a small change in one element results in a very large change in outcome. The multiple in the Gross Domestic Product, GDP, acts in just this way. This small multiple drives the GDP. This often ignored turnover rate, this relatively small multiple, times a very large number of market dollars, defines the GDP, a product of market activity.

That small turnover rate in recent years has remained flat or decreased due to the lack of discretionary dollars in the consumer market. While families require multiple jobs to meet necessities, there has been little or no discretionary income. Families shopped at factory stores like WalMart or Costco, bought discounted on the internet, paid  down debt or didn’t  shop at all.

As the economy improved, nothing much changed. everyone worked to just catch up. Here is where the bucket of sand comes in. When poring water into a bucket of sand, you see no change. You keep poring and poring then all of a sudden you reach a critical point, the bucket overflows. Economically speaking, we have been poring water into a bucket of sand and see no progress. The multiple has not changed. If we can continue to build back the economy with increasing employment and increasing wages, we will eventually reach that critical point when consumers once again have abundant discretionary income. The bucket will overflow. Customers will demand service, quality, ambience and courtesy and will be willing to pay for it. At that critical point the multiple will grow and only a small increase in market activity/ turnover will yield exponential growth in GDP.

More importantly that per capita growth in GDP will accrue to the general population, not so much the to the multinationals as it has done in the past. It’s taken 30 years to strip wealth from our middle class. It will take time to rebuild it, not through globalism, but with US workers, small business, industry and productivity.

Wednesday, July 17, 2019

Quantum Physiology

I just came from a morning meeting of the Innovative Collective in CDA where AI dominated the discussion. Medicine made great strides in molecular biology and understanding neuro physiology. China claims advances in databases and machine learning based on knowledge of our own neuro networks and claims of artificial intelligence.

Pure conjecture, but there surely exists a whole strata of human physiology beneath the molecular level, call it a quantum layer. If the progress of medical science from the anatomic to the chemical and then the molecular level tells us anything, a yet more microscopic sub level of physiology lurks just beneath the known level of microbiology. There must be a functioning level of quantum mechanics active within our physiology. If so our attempts at AI basing chips on known neuro networks may fail to provide the source of creative thinking. A whole halo of quantum entanglement, a halo wherein cognitive thinking, dreams, intuition and inspiration live and may float freely within the human brain at a subatomic level, elusive to AI’s electronic circuits.

Sunday, June 02, 2019

Difference Between the Politician, the Lawyer and the Billionaire

A politician learned from a very young age that he or she was cute and could always get by on his or her personality. He or she could lie, blame the other guy, get first in line, make up answers in school and get away with it. The politician, as he or she got older, stayed in school rather than working, learned to debate, create a false perception and live on other people’s money, to in-fact,  live off their own personality. The politician never actually works for a living. Truth for the politician lives in the charisma to persuade others to follow even in the dumbest direction and believe what ever the politician wants or what ever the politician believes.

The. Lawyer, on the other hand, as a child was circumspect, good grades, worked hard, and with a reputation, could bend the rules. He or she made excellent grades, could always grasp and articulate the subtleties of complex questions. He or she excelled at debate and like the politician stayed in school rather than going to work. The lawyer too learned how to live off of other people’s money. As an attorney, no matter how many clients or how few, the lawyer bills one or the other of them for every minute of the day, even when sitting on the John or driving off for coffee. For the attorney, truth amounts to what ever best serves his or her client. Truth is existential.

For the billionaire, on the other hand, truth is marginal return. As a child, he or she, grasped the art of doing what served him or her best. The child entrepreneur conned an allowance from parents just for making the bed. Soon a Kool Aid  stand, and then in school there was always a money making project. Selling magazines, took too much time, better to conn buddies into selling them instead. He or she probably had the answers to the test in advance, selling them on the side. The billionaire negotiated publication of the year-book or negotiated the deal for the class ring taking a cut. While in business school, he or she published an outrageous humor magazine, which went national or a software program that went viral. Truth was an opportunity no one else thought of. The billionaire with an ego that’s off the chart, is willing to accept complete failure, to go where no one else has gone and look for the greatest hidden value discounted by others. Truth is the marginal return among many alternatives that would serve him or her most profitably.

Monday, May 13, 2019

25% Tariff on Chinese Products

§ Anything that we buy from China, we can buy someplace else just as well.

§ The Chinese product arrives at US customs and Border Protection warehouse in the US. The US customs broker pays the tariff at the customs house on behalf of the importer before the product can be released from the customs warehouse.  The money then goes to US Treasury.

§ The importer may look to another country for the product. The retailer and customer may do the same or choose a local manufacturer.

§ The Chinese exporter can chose to stop selling the item, He can reduce the selling price. He can seek a market for his products in another country.

§ The Chinese government has the option of subsidizing the manufacturer or devaluing the Yuan to offset the cost of the tariff.

§ China can stop buying imports from the US, or impose the same stiff tariff on us, but since Chinese imports from the US amount to far less than US imports from China, the leverage is not as great for China.

§ China can retaliate by dumping US treasury bonds, which they have done before.

§ US exporters to China can seek sales in other countries, concentrate on domestic sales or shift their product mix away from products exported to China. There will likely be less outsourcing of manufacturing, plants and labor to China.

§ If the US customer chooses to buy an alternative product made in the US, that choice will impact our economy significantly in a positive way, while affecting the Chinese economy in a negative way. The consumer’s discretionary dollars would no longer leave the country but would remain in US markets. With multiple turnovers those USDs left in the US market economy will have a multiplying effect on the GDP. Furthermore, that positive addition to the GDP and that added liquidity would accrue to the consumer’s side of the market, not to the supply side, thus rebuilding the wealth of the American consumer.

§ US businesses planed for these tariffs and will adapt. The US will be stronger for dealing China out and confronting their predatory trade practices. The rest of the world may benefit as well.

Friday, May 03, 2019

Liquidity Again

As the saying goes, “Follow the money.”
The Daily Treasury Report gives a precise total for government revenue on a daily basis, and that. Revenue correlates very well with the discretionary liquidity in the consumer and business market.
The year over, that is the comparison of yesterday’s collection with the same date the previous year predicts the ups and downs of market activity.

Two day collection 5/1 and5/2 was 30.9 billion, 8.4% above last year.
The fiscal year to date was 23.5 billion year over, a 1.27% increase
Of that, the excise tax was 57.768 b, 21% up year over

It is unclear, if excise tax and tariffs are clearly separated in DTR, listing Customs and certain excise tax as $47.24 billion and excise tax as 57.77. The 47 billion grew 67% from 28.25 in 2017 year over, year to date 5/2/19. So, I think tariff collected thus far this year amounts to $47,242 million/ 47.2 billion. (There appears to be an anti tariff bias in the formats of reporting. Sad to see political bias distort the research)

The National Debt, $21.987 trillion grew 4.7% year over

The other interesting thing, the velocity within the GDP remains low with the driving force represented by the M1 and that mostly in the hands of banks and investments where there is little turnover in the consumer market.

Wages are up and employment is up, so is the stock market, but one might guess that most of the GDP still belongs to the 1% where investment growth still exceeds income growth.

Historically that maldistribution of wealth changes with, war, revolution, depression or even the plague. The subprime mortgage depression presented an opportunity for redistribution to take place by natural means, but was averted by an unprecedented infusion of taxpayer dollars to save the very perpetrators of the crisis - cynically, quite the reverse of unfettered free market cause-and-effect, which could have dumped trillions from the illegal mortgages back into the consumer market.

Interesting times, tariffs could produce some redistribution of wealth by reversing, the economists accounting equation for trade deficit, by mass action, or call it simply a reverse, hurting China and big business in favor of the buy side of the market.

Thursday, January 24, 2019

False Logic

Simply put, the lassie-faire idea that trade deficits don’t matter in the long run and that unrestricted-trade benefits all parties, proved unequivocally false, especially in the US. Economists, fearing for their jobs and reputations remain silent. Economists point to accounting that equates all trade deficits to investment and government revenue neglecting to mention that the investment and government revenue remains foreign owned. There is some and currently diminishing, DFI, direct foreign investment back into the US that benefits investment bankers politicians and multinationals, but provides little or no return of liquidity to the buy side of our consumer market – a half truth in support of a falsehood.  

In a global sense the accounting equation may be true but not for all nations. For some it’s colonialism, for the US especially, we subsidize other countries while ignoring our loss of jobs, loss of wealth and increased poverty. 

S+(m-x) = I+(G-T), where S - domestic savings, m - imports, x - exports, I - investments, G - government spending, T - treasury revenue 

The less we have to do with deficit trade, China or others, the less the drain and thus the greater the liquidity in our own markets. The improvement in job numbers and the wage numbers seen over the last two years, offer some objective proof that trade renegotiation is not the end of the world.

This imbedded fallacy in economic teaching, political correctness and near hysteria, however, threatens yet a further push to continue doing the same failed deficit trade. Conventional wisdom suggests the so-called trade war with China threatens the economy, and our companies who export, yet we seem to be seeing just the opposite. However, politicians continue to point out the profit in the banking, multinational and investment community that benefits from secondary DFI in America.

In reality, the trade war and or tariffs, provided they end the deficit, create a mega shift in liquidity, or call it flow of capital, away from China and others back into the buy side of our economy. This favorable macro shift in liquidity takes from the 1% and benefits the other 99% of us -- a transfer of wealth from capital markets to the buy side of the economy – a recapture of lost capital and a much-needed redistribution of wealth. 

That macro shift in capital created by blocking China’s aggressive asymmetric trade policies does more than just stopping the drain, it provides turnover of this added liquidity, which multiplies within our economy to drive a productivity multiple times greater than just the dollars saved – the multiple within the GDP. Furthermore, with increased confidence and energy that multiple should increase as well. With such a shift in liquidity comes rapid disruptive growth in manufacturing and technology; that’s the strength of America’s competitive economic power.

While political economists continue to support a half-truth in support of a false-one in a politically correct deductive reasoning, historical economists point out the failures in objective historical terms -- inductive reasoning. The same failure of the Industrial Revolution 200 years ago, resulted in massive poverty. Adam Smith expressed these same reservations. Thomas Paine and two generations of Toynbee’s described the same exploitation by an aristocracy and unregulated new industrial class plundering and hoarding an unsustainable concentration of wealth.

Aristotle named thirteen forms of false logic, this one included, in which a half-truth supports a false conclusion. When have you ever believed everything your teachers taught you?

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.