Daily Archives: October 26, 2021

The F-35 At 20: How Its Successes, And Failures, Shaped The Aerospace Industry

The takeaway from the last 20 years, according to aerospace analyst Richard Aboulafia, might well be, “You succeeded, but please don’t try that again.”
By Valerie Insinna – On Friday, Oct. 26, 2001, executives and employees from the nation’s two biggest defense primes gathered in boardrooms and sprawling production facilities to watch a Pentagon press conference. At stake: the Joint Strike Fighter competition, which would decide who would dominate the next 40 years of the defense aerospace industry — and rake in hundreds of billions in profits.

It was a moment five years in the making. The Pentagon wanted to buy a single stealth aircraft for the Air Force, Navy and Marine Corps capable of three distinct operational requirements: conventional landings on a runway, landing on aircraft carriers, and performing short takeoffs and vertical landings.

It awarded contracts to Lockheed Martin and Boeing in 1996 to build competing prototypes, known as the X-35 and X-32. By July 2001, Lockheed’s X-35 had proven it could execute a short, 500-foot takeoff, fly at supersonic speeds and then vertically land in a single flight. While Boeing’s X-32 also demonstrated supersonic flight and vertical landings, it did not accomplish them in the same flight.

For the engineers that had designed and developed the two planes, emotions were running high as a group of white-haired defense acquisition officials approached the podium of the Pentagon press briefing room.

And just like that, the competition was over. more>

Updates from Chicago Booth

Don’t rely on central banks to fight climate change
By Jeff Cockrell – In late August, five members of the US House of Representatives issued a statement urging President Joe Biden not to reappoint Jerome Powell, the chairman of the Federal Reserve, when his term expires in February 2022. The group, which included Alexandria Ocasio-Cortez (Democrat of New York), cited two concerns with Powell’s leadership: the Fed’s relaxation of banking regulations and its lack of action “to mitigate the risk climate change poses to our financial system.”

Ocasio-Cortez and her fellow members of Congress are not the first to suggest that central banks—whose policies have traditionally focused on objectives such as price stability and low unemployment—have a role to play in fighting climate change. The British Parliament’s Environmental Audit Committee (EAC) has encouraged the Bank of England to conduct its bond purchases with borrowers’ carbon emissions in mind. Many central banks themselves have also accepted some responsibility for fighting climate change: the European Central Bank says it is “committed to taking the impact of climate change into consideration in our monetary policy framework.”

But Chicago Booth’s Lars Peter Hansen cautions that monetary policy is a weak substitute for fiscal policy, which is far better suited to address climate change through tools such as carbon taxation and investment in green technologies. Asking central bankers to step in where fiscal policy makers can’t or won’t risks exposing central banks to reputational damage and a loss of political independence, he argues. more>

Related>

Meet General Electric’s flexible power transformer

By Ben Geman – A Mississippi utility is installing what’s being billed as “the world’s first large flexible transformer” — an Energy Department-backed project aimed at boosting grid resilience and smoothing integration of renewables.

Driving the news: GE Research and Prolec GE, working with the Mississippi power company Cooperative Energy, this morning are announcing the launch of a six-month field demonstration at a big substation in Columbia, Mississippi.

Why it matters: The “flexible” transformer has advantages over traditional models customized to specific voltage levels and other conditions, the companies and DOE said.

The big picture: The companies, which released this video promo, said it can better withstand extreme weather and is also an easier and faster replacement when extreme weather has damaged a traditional transformer. more>

The looming harm of tax harmonization

By Akvile Jaseviciute and Bhuvam Patel – The OECD’s proposals to harmonize international tax regimes were generally welcomed by governments without considering potential benefits of tax competitiveness. Blinded by their wish to stop multinational corporations from moving their business to jurisdictions with more favorable tax regimes, few considered the practical implications of OECD’s plans. Currently, OECD countries have divergent tax regimes – the 2021 edition of the International Tax Competition Index produced by the Tax Foundation ranked countries regarding tax competitiveness. Estonia earned the top spot in the ranking because of its relatively low corporate tax rate, while Italy and France fared poorly due to features like punitive wealth and financial transaction taxes. We hence question, why countries with favorable tax systems should be held back by a harmonized but uncompetitive tax regime?

OECD Proposal Problems

Current OECD proposals on tax harmonization focus on ending the perceived tax ‘unfairness’ while providing little practical benefits. The first Pillar aims to set tax brackets universally on companies making global sales above €20 Billion and profit margins of more than 10%. However, in practice, large companies often place the taxpaying burden on other stakeholders – employees or investors. Therefore, instead of benefiting the most vulnerable, the proposal could be detrimental to workers as companies choose to cut wages instead of letting their revenues shrink. If insufficiently considered, such an outcome could further disadvantage low qualification workers, which are already significantly affected by the Covid-19 pandemic. more>