Henry:
I imagine that you are aware that time is a dimension of the structure of
the universe, something without which the universe itself cannot exist.
Likewise, it is simply a fact that money in the future is worth less than
money today; this not a convenience--it is arguably damned inconvenient--it
is a fact that ultimately derives from the existence of time and thus from
the physical structure of the universe. We can dismiss it or ignore it but
we can not make it go away.
The Business Development person at Blue has--publicly and on multiple
occasions--stated that the company's funding has a "40 years" time horizon;
my use of that framing was not accidental.
Any investor--public or private--who accepts a 40 year return on
investments is accepting an about 2% annual return; it is just math. The
reason governments traditional fund these investments is that the
government's cost of money is much lower than that of private capital;
currently OMB specifies an about 2% hurdle rate for USG investments, for
example. But the government also has many competing opportunities and as
you observe, vacations in earth orbit for billionaires has so far not won
out against alternative USG investments. That does not mean that it has not
been discussed and ultimately rejected for the very good reason that it has
so far been politically unjustifiable.
That there are now private individuals willing to make this investment does
not mean that the government is populated by idiots or that the industry is
hind-bound: it means that people are acting within the constraints of the
systems in which they work, nothing more. Do note that as of last quarter
Amazon began booking profits in direct response to investor pressure;
presumably the managers of the company would have preferred to invest those
funds back into the company, but like the aerospace industry, Amazon is
ultimately limited by investor pressure for profits. That does not mean
that Amazon's managers are conventional thinking fools, neither are the
managers operating within the constrains of the aerospace industry.
Trashing people for behaving rationally under the constrains of their
employment is at least unfair, Henry...some might find it offensive.
Blue and--to a lesser extent--SpaceX have the freedom to accept below
market returns in order to accomplish a public good. Good for them and
good for Messrs. Bezos and Musk for being willing to "waste" a little bit
of their (and in SpaceX's case, others') wealth accomplishing a historic
good. Both the US economy and the world will be better off if they
succeed--and the US government will have higher (eventually much higher)
tax revenues as the economy expands into LEO. But none of that ijustifies
trashing the "traditional" aerospace industry for behaving rationally in
the face of the fact of the time value of money.
Bill
On Sun, Dec 27, 2015 at 10:17 PM, Henry Vanderbilt <
hvanderbilt@xxxxxxxxxxxxxx> wrote:
On 12/25/2015 10:30 PM, Henry Spencer wrote:
Falcon 9 is certainly *ahead*, but otherwise, it's perfectly reasonable
to compare the two -- it's just a bit difficult. If your goal is cheap
orbit, then whether it's better to go suborbital first and then progress
to orbital, or to go expendable first and then progress to reusable, is
a perfectly reasonable question, although not simple to answer.
Fortunately, we have talented funded organizations pursuing both
approaches, so we'll see. With luck, it will turn out both are viable
paths. But yeah, the current "SpaceX is better! No, Blue is better!"
wrangling is way premature - it's far too soon to say.
Remember that SpaceX doesn't *have* an operational reusable rocket yet
-- just an initial proof of principle, achieved with some difficulty.
Many would say that Elon is doing things the hard way, losing much of
the benefit of reusability by treating it as a later add-on.
On the other hand, I'm really impressed with how (apparently) little
SpaceX has spent, both in hardware development and in booster performance
margin, to add on the now-demonstrated capability to recover till-now
expendable boosters intact. (I'd guesstimate the total cost in the high
tens to low hundreds of millions - can you imagine how many billions a
similar demo would have cost at MSFC?)
The current capability may end up being a long way still from a profitably
reusable booster stage. But they didn't break the bank getting this far;
chances are good that (absent some show-stopper in the inspection data, or
a market crash) they can afford to continue developing the capability.
Henry