Further Discussion of Boeing’s Slow Motion Liquidation: Rational Given Probable Airline Industry Shrinkage?

In our post yesterday, we discussed how Boeing management was on a path that would result in the liquidation of the company. We did not dwell overmuch on how significant a development that would be, given Boeing’s heft as a company (for instance, it is America’s biggest exporter) and its critical role as a supplier to civilian airlines and as a defense contractor. Boeing is an apex play in two very large economic ecosystems.

Reader GM offered an alternative line of thinking. He argued that the Boeing management’s seeming self-destructive conduct was economically rational given the likely trajectory of the airline industry, and the long time frames for capacity addition and major new product development. GM was not suggesting that this sort of calculus, as opposed to good old fashioned greed and bad incentives, was driving Boeing’s implicit strategy. Recall Boeing has been engaged in a high level of stock buybacks, as opposed to investing in its business, starting in 1998, as in almost immediately on the heels of McDonnell Douglas executives taking control of the company. But it may come to serve as an ex post facto justification if anyone starts to question their conduct.

Note that there will be many second-order effects of this trajectory. Many items are shipped by cargo as opposed to by sea. Many multinational corporations depend on air travel, despite the leap in the use of Zoom and other teleconferencing tools, because some things, like factory and vendor facility visits, need to be done in person. Plus experience suggests that a minimum level of in-person contact is necessary for physically-dispersed personnel who need to collaborate closely on complex matters to have smooth dealing with each other. GM’s trajectory implies a big unwind of globalization and far-flung supply chains. How quickly will big multinationals get on board with the new reality before it is forced on them? Or is this simply another element of the conundrum that we need to adopt a radical energy paradigm pronto or be run over by it?

GM’s comment yesterday:

Air travel is doomed on a time scale of a few decades from now, because of oil depletion and geopolitical destabilization.

It will be reduced to private jets for the mega wealthy. Perhaps it will be maintained internally within the Russia-China-Iran (plus perhaps the Gulf states) triangle for a bit longer, but that will run on Chinese and Russian technology.

Thus it does actually make sense to start liquidating Boeing, if one understands that long-term predicament.

The problem is that much more likely this is not at all the reason why Boeing is being liquidated, and it is not even a conscious long-term decision. It’s simply the perverted logic of chasing short-term profits, raising the stock price and the revolving door of execs with purely financial background and zero attachment to the core business looking to grab as much as possible before they move on to the next gig. The solution to this short-term optimization problem is to gut the company by slashing R&D, crushing the unions, outsourcing, taking every possible shortcut on QC, and redirecting the “savings” towards share buybacks.

GE is the archetype — it doesn’t even properly exist anymore, and it is an incredibly sad exercise to read what the company produced once upon a time and how it used to carry out Nobel prize winning research, and what it was reduced to towards the end. But Jack Welch, despite destroying GE, and being a climate change denying lunatic, and an ideological fanatic on shareholder value, is still regarded as a model to follow, at some point taught the next generation of MBAs at MIT and other places, and his influence is all-pervasive to this day.

This is only going to get worse, until complete collapse, because there is no mechanism in the system to halt it. The government is fully captured, and full of spineless incompetents who share the same ideology.

The big problem is that this will be a slow collapse, not a fast and hard one. In general, it is better to collapse fast and hard, because the alternative is slow decay, and slow decay is much more thorough.

The Soviets collapsed fast and hard and before the planet as a whole really hit ecological limits. So then Russia spent 15 years in the gutter, but managed to recover a bit, though still far from what it once was. With such a fast and hard collapse, the people who knew how to build things were still alive and available to start reconstituting. As a classic example, most of Putin’s 2018 super-duper doomsday weapons are late Soviet developments that were resurrected after the US pulled out of the ABM treaty, and they were supervised to completion in the 2000s and 2010s by the same people who worked on them in the 1970s and 1980s before they were mothballed in the 1990s. The guy who supervised the Avangard HGV program was born in 1933 and worked with and succeeded Chelomey after the latter’s death in 1984. Had that program restarted a decade later, it is not clear if the institutional knowledge would have still been there to successfully push it through.

And this is the prospect that the US is facing now — slow collapse, the people who know how to build things die out, there is nobody to replace them, then there is just a void and you have to start from scratch. But that will also coincide with the planet as a whole hitting ecological limits, and who knows if there will be any recovery possible at all.

You already see the manifestations of the problem in real life — there were the complains about the Minuteman ICBMs not being serviceable anymore because they are so old that the documentation has been lost and the people who designed them are all dead now. Another famous story was about Fogbank, which is some kind of an aerogel that has to go in between the stages of the nuke. And it turned out they had forgotten how to make it, everyone who knew anything about it was dead, and NASA had to reverse engineer it, which cost them two years, lots of setbacks and tens of millions of expenses. That sort of thing.

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  1. LawnDart

    Electric aircraft are a real thing now, and the Chinese are leading the way. It is highly-likely that we will soon see aircraft powered by fuel-cells and hydrogen too.

    Wether these will allow for overseas air travel remains to be seen. Perhaps blimps will make a comeback.

    The points about fast-collapse vs. a slow one, especially with regards to the loss of instituional knowledge, seem dead-on to me. I would also add that talent with the means to do so might seek greener pastures: a lot of Russian PHDs were driving taxis in our western cities back in the 90s.

    1. digi_owl

      Blimps/airships has the problem of what gas to use to lift it, as helium is a shrinking quantity and hydrogen is, well, hydrogen.

      Nah, more likely to see sailing ships return in some modern form. or ships running on something other than heavy fuel oil (there was some recent talk about testing ammonia, but then that runs into the need for same for fertilizer).

  2. PlutoniumKun

    Well, aviation, along with every other industry will die along with civilisation if we really are on a doom trajectory, which given the latest climate change scenarios seems more probable than possible (some of the most recent research, especially the ongoing confirmation of the ‘hot’ models, is really, truly disturbing).

    But I’m not sure that we can say that Boeing is being particularly rational, except in the short to medium term. Digging out every last piece of value from a long established product is perfectly rational in a business sense, but not investing in a replacement is not. It did make sense for Boeing to try to gain another generation from the 737 – and in some respects they’ve been proven right, because they are still selling lots of them, even to China, which spent something of the order of $80 billion on developing their C919 (Comac says $20 billion, but this is questionable).

    Certainly, Airbus thinks they have a strong future, as they are still investing in future narrow and wide bodies. I hate to say it, but mass air travel is here to stay. Almost all the under 30’s I know see regular flights to exotic locales as their basic right, and no amount of climate change doom mongering will change this. I strongly suspect that this cultural shift is quite price inelastic too. Several friends I know took long distance trips last year, despite grumbling that flights were twice the price of pre-Covid days. Plus of course mass immigration has meant inevitable long distance family ties – doubling or tripping prices will not stop people wanting to fly across the world every year to see their grandchildren. My own personal ‘no flights in 5 years’ pledge failed at 4.5 years due to family commitments.

    The enormous costs of developing completely new models is definitely a ‘thing’ – and the very high failure rate of new designs must surely be making the industry cautious. In very recent years we’ve seen Bombardier fail (although their C-series became the successful A220), Sukhoi screw up mightily with their SuperJet 100, Mitsubishi quietly ditching their ambitions and the Chinese trying to pretend the C919 is not a 20 billion+ dollar flop. Airbus is the only new entrant in the past half century that has made money. And even though they have a lot of fancy looking prototypes under development, they may also have decided that its rational to milk their existing designs for a few decades more, especially in the absence of any real competition on the horizon.

    1. Randall Flagg

      >Certainly, Airbus thinks they have a strong future, as they are still investing in future narrow and wide bodies. I hate to say it, but mass air travel is here to stay. Almost all the under 30’s I know see regular flights to exotic locales as their basic right, and no amount of climate change doom mongering will change this. I strongly suspect that this cultural shift is quite price inelastic too. Several friends I know took long distance trips last year, despite grumbling that flights were twice the price of pre-Covid days.

      I would have to think you nailed it with that, and though my thoughts are only based on the anecdotal evidence provided by my 29 year old niece and her boyfriend, who both work for Google, conversations with them and those in that age group, they spin around the world at the drop of a hat for a vacation, family, you name it. Remote work/work from home? It’s a beautiful thing for them (though I think of them as the original superspreaders)

      Add to that the tourism industry ( looking at you cruise lines in particular. for which many have to take flights to the departing port), I think nothing short of continual plane accidents will slow the roll. Or a depression…
      Or Higher Authority help us, terrorist actions

    1. digi_owl

      In the end so much of US tech industry is a product of the word wars and cold war, as they provided near infinite bootstrap money and a near insatiable buyer of products.

  3. lambert strether

    I imagined, back in the 90s, the climate change would have atmospheric effects that made air travel untenable, or at least uninsurable, because the airframes wouldn’t have been designed for such stressors. But it looks like the MBAs got there first!

    1. digi_owl

      Not sure where i saw it, but someone mentioned knowing an engineer tasked with working on future airframes able to withstand climate change. And said engineer was scared pale from the numbers provided. And it may well be that the MBAs have seen the same numbers and are looting what they can before they run for “safety”.

      1. Duke of Prunes

        So what exactly are these additional airframe stressors caused by climate change? Is climate change going to force planes to fly through storms they don’t today?

        1. Ben

          One possible problem will be more and stronger storms. If you put more energy in a system the storms gets more common and stronger.

          Hydrogen is light but it need very strong, insulated and very cold (liquified) to maximise capacity. All this cause extra weight.

          Batteries are not very light and currently there seems to be limit od 1,000 charges/discharges before significant drop in capacity. This seems to affect all yype of batteries.

  4. john r fiore

    Doubtful anyone would ever get on a plane run only on battery power…as for the idea of “people who know how to build things dying out”…it most certainly is true, at least in the US….Kindly note that Laos has more high speed train miles than the US….

    1. digi_owl

      Depending on the distance, it should be no more dangerous than current planes. Not like they drop from the sky (unlike say a helicopter, but even that is an over-simplification of the physics) the second the batteries run dry.

      That said, i believe there was some articles a while back about testing out short hop propeller planes running on hydrogen. Where the refueling was done by replacing a what amounted to an air freight pallet at the back of the plane. Not something for doing overseas flights though.

  5. Terry Flynn

    Have read through both posts and comments and decided to weigh in based on a videoed (uploaded) lecture by my former mentor, given in Sydney around 2010. He recounted his previous consultancy work where he had been personally commissioned to use choice models to guide Boeing in deciding whether what came to be the 787 or a “fast, close to supersonic” plane was what people would ultimately want.

    We know the 787 “won” and I don’t remember (or care) whether his recommendation was or wasn’t the 787. What *is* concerning is an issue NC has brought up recently independently of the Boeing saga – Google’s now terrible search functionality. I spent half an hour on YT using every possible search term combination possible to locate that video. Nada. Either it has been suppressed by Google or taken down by our former university. As a check, I searched for a little known but easily findable public lecture by me that was on Google (YT) as recently as a year or two ago (approx 10 years after I gave the lecture and the institution uploaded it). Again, Nada. The video isn’t in the list on their own channel. Thankfully I downloaded it a while back. So a “potential whitewashing of Boeing history” issue might in fact be a wider issue that NC has already drawn attention to – that whole sections of what we use as references to make the points NC has traditionally made might already be gone.

    TL;DR Death of key engineers is not the only way that institutional knowledge and expertise is lost.

    1. Hickory

      Yes, it’s a weird mix where the surveillance state seems like it can remember everything but I can’t trust that I cam find an article I read yesterday again today. I’ve taken to downloading youtube videos and creating epubs out of news articles with browser extensions if there’s any chance I’ll want to reference the item later. We cannot trust the internet to remember.

      1. Terry Flynn

        Key point from your comment:

        We cannot trust the internet to remember.

        Like you, all YouTube videos I deem to be properly researched are downloaded. I’m very glad that after two failed attempts I finally managed to migrate to Linux. Granted, you don’t NEED Linux to do stuff like this…… But with a bit of effort, the payoff is huge in grabbing all the videos etc you need to prove that “this research was real and was public and here it is”.

    2. FlyoverBoy

      With part of the problem being Google, part of the solution is using search alternatives. When I can’t find anything through DuckDuckGo, which piggybacks on Google’s corrupted search engine, I use the unpolluted and anonymized Gibiru.com, and I often find the stuff. There are other smalls, too.

    3. GM

      Google and YouTube’s search are completely broken. YouTube an order of magnitude worse.

      It gives you anything but what you are looking for (even when you know very well the videos you are looking for exist). If you want to search for YouTube videos, search for them through Google’s Video search. Then you have a much better chance.

      But why does it have to be that way? It was working properly once upon a time.

      I don’t think this is because of crappy engineering though, they just want to push what they want you to see.

      It’s isn’t just Google, Bing is also like that, though a bit better.

      1. Terry Flynn

        Thanks GM. I had pretty much come to same conclusion (though was unaware of the solution you proposed).

        I’ve warned someone close to me about how this could come back to haunt him. He videotaped the original broadcast (or perhaps earlyish repeats before self-censorship set in) of the acclaimed WW2 documentary “The World at War”. He has converted to MP4 a 2 minute section that is now excised from every broadcast (cancel culture before cancel culture became a thing). It is part of the interview with the secretary to the big bad German/Austrian we probably can’t name anymore. Big bad guy made quite a funny (though dark) joke at a private party. But today we can’t show a complete picture of the guy. That 2 mins has never been broadcast in reruns nor is on the official VHS/DVD issues.

        Ironically the joke actually makes the viewer all the more horrified at the mind of *that guy*. However it will be lost to history…. I’ve warned the person who uploaded it to YT that his algorithm led exponential growth will at some point get him into trouble.

  6. Carolinian

    Thanks for the highlighted comment and I do think some perspective is helpful on all this. Those who say “if it’s Boeing I’m not going” may simply not be going given that many airlines still only use Boeing. The barriers to entry when it comes to making airliners may be higher than almost any other business given the high stakes of making mistakes along the learning curve. These planes are a mature technology and worth noting that the biggest recent hit to Boeing’s reputation was about software, not mechanical engineering.

    In fact the switch to digital as the engineering cutting edge may be the real story as in Ukraine where drones and surveillance are having such an impact. Airplanes were the Silicon Valley of the early 20th century whereas now the young and technically innovative are into other things. Brian Potter just had a post about how the machine tool industry–which America also once dominated–has now declined greatly in this country.


    And finally I’d opine that the rise of digital is a good thing, even for airliners. It’s quite likely that automation has a lot to do with why flying is so much safer than it used to be. There used to be a big crash almost every year.

      1. Carolinian

        The two Max crashes were about bad software (in part). Seems recent to me but then I don’t get out much.

    1. digi_owl

      Digital fails when conditions are less than optimal, sadly.

      Air France lost an Airbus over the Atlantic back in the day because the autopilot that normally stopped pilots from doing dumb things did the sensible and shut down when sensor iced over.

      Only problem was that this was during the night, in a storm, over the ocean, so the pilots had zero external clues about the state of the plane. And G-forces do silly things to the inner ear.

      End result was that one pilot, in silent panic, had been trying to climb the plane out of the storm the whole time. But with the autopilot off, he had instead forced the plane into a stall. But nobody noticed as the stall alarm was already going on and off intermittently thanks to the faulty sensors.

      1. Carolinian

        So pilot error combined with problems with a pitot tube–an analog device. I’m contending that automation reduces errors while, like any machine, not being perfect. That’s why planes still have pilots and cars still have drivers.

  7. Rip Van Winkle

    There was nothing more licentious as the CNBS Bubblevision Money Honeys cozying up to GE Jack back in the day.

    1. Randal Flagg

      >There was nothing more licentious as the CNBS Bubblevision Money Honeys cozying up to GE Jack back in the day.
      Testing the boundaries of pornagraphy on air actually.

  8. GlassHammer

    “Extraction until dissolution” is the “Maturity Stage” of the modern firm not the “Late Stage” or “Failed Stage”.

    The modern firms “life span” is just drastically shorter than most people realize and that is why “managed decline” is what you see in corporate leadership.

  9. Tom Pfotzer

    We have two theories of why Boeing is in decline:

    a. The managers and stockholders are short-term thinkers, motivated by greed, and are technically incompetent to operate the business, and

    b. The managers recognize that Boeing doesn’t have a strong future, and are withdrawing their capital (cash, goodwill, etc) asap

    I struggle to believe that institutional investors wouldn’t be able to see the value of investing in the enterprise if its future cash flows (market potential) indicated a high return on that investment. The alternative uses for capital, at the moment, aren’t all that compelling.

    Why hasn’t “don’t bet against America” Warren Buffet (or others like him) bought Boeing? Boeing is a market leader, and has a defensible market (Charlie Unger: “build a moat around it”).

    Let’s revisit Tesla. Tesla’s market capitalization was almost equivalent to the top five automakers during its stock run-up. Was that all hype, or did investors realize that, indeed, Tesla _was_ the future of autos? Better technology, lower cost structure (simpler, no dealer network, positioned well for renewables, no dysfunctional bureaucracy, etc.), much better long-term profitability potential.

    And if you look at the legacy automakers, they can’t move. They’re stuck. Immobilized by their dealer network, their investment base (mfg’g gear, skills), etc. Stuck.

    Now let’s revisit Boeing. It’s stuck too. The technology of an airplane, using jet engines, is limited to a certain amount of weight carried .vs. fuel consumed. That technology is at the end of its lifecycle, and almost all the invested capital (mfg’g gear) is chained to that same technology.

    Let’s also revisit Boeing’s market. Here’s the profitability of the airline industry _after_ the bounce-back from Covid.

    After all those Covid-enabled cost-saving measures (pay extra for everything, including the peanuts) and increased fares, the airlines are still not making any money.

    Why is that?

    If I was an investor in the airline industry, I’d be looking for a new manufacturer without all the political and bureaucratic baggage of Boeing. I’d be looking for a company with a fundamentally new design that can carry much higher weight .vs. energy consumed.

    That model would be worth investing in. It’d be like Tesla was 10 years ago. Boeing…. not so much.

    Even if Boeing irons out all their technical problems (hatch blows off, 737Max, etc), they still have the same fundamental problems: weight to energy consumed. The air frame and propulsion system is at the end of its technical lifespan.

    That’s why Boeing management’s function is to extract wealth, and keep the situation glued together long enough to get that job done.

    If the stockholders really believed in the business, they’d invest in it. They’d put engineers in charge, and they’d bust heads when quality failures happened.

    But they’re not. The investors don’t believe in the business.

  10. JonnyJames

    IMO this sums up what Yves and many comments said yesterday:

    “…The problem is that much more likely this is not at all the reason why Boeing is being liquidated, and it is not even a conscious long-term decision. It’s simply the perverted logic of chasing short-term profits, raising the stock price and the revolving door of execs with purely financial background and zero attachment to the core business looking to grab as much as possible before they move on to the next gig. The solution to this short-term optimization problem is to gut the company by slashing R&D, crushing the unions, outsourcing, taking every possible shortcut on QC, and redirecting the “savings” towards share buybacks..”

    This is what Michael Hudson and others have been talking about for some time now as well. The collapse does appear to be a gradual one. In a way, we have already been experiencing that slow collapse for the last 40 years or so.

    GE, Boeing etc. are big examples, and these are indicative of the wider problem. The institutional corruption can be seen at all levels of govt., legal, financial, economic, political institutions.

    As the comment cited from GM states, don’t expect any improvement: our so-called elected officials are fully “captured” and incompetent. (kakistocrat-oligarchy). Not to sound typically doom-and-gloom, but this trend started years ago, and only appears to be worsening.

  11. Feral Finster

    Boeing’s behavior is perfectly rational. Even if Boeing is eventually run into the ground, the feds will step in and save it, using an “Muh American Jobs” rationale (somewhat like GM and Chrysler) and a “Muh National Security” rationale. The voters won’t like it, but nobody will ask them.

    Meanwhile, the stock buybacks have already happened, the fat DoD contracts already signed. Everyone wins but the taxpayer, and if they can strong arm enough foreign buyers, even the taxpayer won’t do too badly.

  12. Sub-Boreal

    Also in the transport domain, I’d be interested in GM’s take on the metastasizing of monster Petri dishes, i.e. cruise ships, like this one. It’s amazing that anyone wants to get on board these bloated, top-heavy monsters, but no accounting for tastes. (Where are the Houthis when you need ’em?)

    1. digi_owl

      Now you got me wondering if the basic human problem is that our cultural thinking can’t keep up with changes in tech and environment.

      Cruise ships are conspicuous consumption writ large, the latest mutation of the ocean liner of colonial era but with the lower classes of travel stripped out.

      Basically we seem to be stuck with the masses of today trying to live like the elite of their great-grandparents time.

      Heck, it may well be that it is some kind of reflex or instinct at work as we seem to at times of stress to attempt to retreat to our childhoods as a way to seek comfort and safety.

    2. GM

      Cruise ships only make sense ecologically if there is a nuclear reactor in them.

      And even then they produce so much trash that this sort of thing really shouldn’t be happening.

      But assuming we want to have the “experience”, and there is proper infectious disease control, that is how you would do it — build it like an aircraft carrier or an icebreaker, with nuclear propulsion.

      As it is, they are just an extremely inefficient way to burn off the dirtiest leftover oil…

      P.S. Billionaire megayachts there should be a total ban on, period.

  13. Bill Carson

    I watched a YouTube video the other day about all of the problems that Camping World is having. The person calling out CW most directly made an astute observation: they aren’t in the business of selling RVs, they are in the business of selling stocks. I think that business model describes much of the corporate world today. Boeing executives don’t care about building the best airliners in the world—they care about showing profits and cutting costs, all of which are short-sighted endeavors.

  14. Randall Flagg

    Great post by the way. I find it extremely educational when a comment is turned into a post ( and the following commets), and as mentioned above, one could really start going down a list of formerly world leading companies that are now a shadow of their former selves. Thank you for this.

  15. Duke of Prunes

    This is going to be a weak comment by NC standards, but I read an article maybe 15-20 years ago that predicted a lot of this and blamed it on accounting / tax codes. As a product engineer, it stuck with me but I have no idea where I read it, who wrote it or whether it was accurate (I’m an engineer, not an accountant).

    Iirc, its argument was that since the 80s (or possibly 70s), tax laws have discouraged organic investment in R&D. Bringing new, innovative products to market is difficult and expensive to begin with. Products flop, consumers are fickle, macro issues (war, energy prices, etc) can wipe you out. With product development being a high risk, low reward (because tax codes) endeavor, corporations look for better ways to spend their money. Stock buybacks, buying companies for their innovations or market share… anything but building new products in house. Hence, the bean counters grew more importantthan the folks that actually built the products that built the company. I belive some tax treatments encourage outsourcing as well.

    This is why the only companies that seem to care about building great products are either small (how else do you grow from nothing) or lead by strong visionaries like Jobs and arguably Musk (I’m on the fence, he milks the government, but Starlink, Tesla and his rocket company have accomplished more than most when it comes to actual product creation vs financial mumbo jumbo) who can fight these opposing forces, but they are definitely the exception… and once they are gone (see Apple and many others who lost their way), the bean counters take over and product development turns to miminal innovation, maximal revenue extraction.

    There was a reddit thread today about formerly good products that are no longer good (craftmen tools, Columbia outerwear, LL Bean flannel shirts, German cars, Boeing of course, etc), and it turned into a discussion of whether there are still any product that are good or have they all be watered down.

    Bottom line is I don’t think Boeing’s behavior has anything to do with climate change, nor is it unique. It’s just very visible at the moment.

    1. Yves Smith Post author

      There is a vast literature on corporate short-termism. McKinsey partners were complaining to me in the early 2000s that they could not get clients to invest even in projects with an 11 month payback. They never once mentioned tax as the driver. They said it was the obsession with quarterly reporting and appeasing shareholders, that any investment will also have short-term expenses connected with it, and they didn’t want to incur any extra expenses.

  16. VietnamVet

    Boeing was innovative from its start through WWII and the Cold War to the outsourced carbon composite 787 Dreamliner assembled by South Carolina non-union workers that proved that offshoring and liquidation of company assets does not work. The 737 MAX is scraping by with old technology and rotting infrastructure to try to keep the money churning into bonuses and stock value. This is similar to Studebaker’s end and being replaced by Honda making gasoline powered cars. Corporate Managers and Oligarchs will keep doing what got them to where they are today until they are forced out.

    The world is right on the cusp of a hot WW3. Nothing changes until everything does. Today acts like just before the start of the US Civil War, WWI and WWII. A likely response to the drone and ballistic missile attacks on US bases in Iraq and Syria is the bombing of Iran rather than withdrawing and the end of helping Israel to spread unrest in its neighboring Middle East nations.

    According to the media, all is well with the too big to fail corporations from Boeing to Chase. This is like shorting Nvidia stock, you’ll lose money right to the minute the company can no longer sell GPUs for the AI’s exploitation of copyrighted material if TSMC’s Taiwan Semiconductor Fabs are ever destroyed or AI is regulated.

  17. Mikerw0

    I strongly disagree with GM’s conclusion. Complex systems do not decay to death in a smooth fashion. There will be a catalytic event that will result in rapid, unstoppable/uncontrollable cascading collapses. There are numerous options as to the form the triggering event could take. They could include geopolitical tensions boiling over (a la the current situation in the Mideast or Taiwan), weather induced catastrophes impacting power systems / agriculture, fragility in the banking system from excessive unproductive leverage, climate change induced catastrophe (a piece of the ice shield finally breaking off), another pandemic. The truth is the things happen quite regularly throughout history. You just can’t figure out which one it will be in advance and given how brittle our core systems are (e.g., power grids) we have consciously removed resilience.

    One other important comment. Unless the physics of aerodynamics are wrong there is exactly no way electric or hydrogen powered planes work. Batteries weigh too much (the same reason they are impractical in truck transit except at the margins) and like hydrogen are not sufficiently energy dense. Hydrogen is a really challenging fuel source — it takes massive amounts of electricity to make, it is very hard to store and takes a lot of energy to keep it condensed, has about the worst energy density you can imagine. and, jet fuel at almost any foreseeable price of oil is comparatively too cheap. Lastly, assume someone showed up with a 737 or A320 equivalent that was either electric or H2 powered and fully certified tomorrow. So what. Commercial planes fly for 25 years, before they go to the Third World. You would be talking decades to transition.

    All I am doing is connecting well articulated themes that are often, and well discussed on NC.

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