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Changing gambling laws have made riverboat casinos superfluous. We spent the night in riverboat ghost town.

This is the second in the ongoing series following our effort to move the Damifino to Naples, Florida.

We only made 74 miles yesterday, which is actually decent progress on the upper Illinois River, with its locks spaced only a few miles. Considering that we didn't start out until after noontime, and passed three locks before giving up the fight at about 6:00 pm, we did okay. It normally takes 1-2 hours to pass through a lock, so getting three hours travel time out of six hours isn't half bad. That's averaging an hour per lock and 25 mph in between.

Twenty five miles per hour doesn't sound like much to people used to burning up the road at 70-80 mph, but on a boat it's moderately fast for a cruiser. Damifino gets up on plane at 12-18 kt (that's nautical miles per hour -- about 15% faster than the same number in mph). Below that speed, the hull pushes laboriously through the water. Above that speed, it skips over the water like a thrown stone. Planing is much more efficient. In between, the hull is constantly trying to climb the hill of water it pushes up as it tries to plow through.

There are two roughly equivalent ways to think of the process of getting up on plane. Sailors think of it as the hull trying to climb up on its own bow wave. Another way to think of it is the hull trying to climb out of the hole in the water (A boat is a hole in the water, surrounded by fiberglass, into which you throw money.) that Archimedes said it must create to get bouyant force to hold the boat up  against gravity. To a hydrodynamicist, the displacement regime is when bouyant forces support the boat, and planing is when the hydrodynamic lift supports the hull. In between is a transitional regime where the hull rises out of the water, so bouyant force is lower, and hydrodynamic lift does the rest.

The best fuel economy -- miles covered per gallon burned -- comes when the hull moves fast enough to be fully up on plane, but not much faster. It's easy to tell when that happens: when running as a displacement hull, the boat runs flat through the water. As hydrodynamic forces come into play, the nose rises dramatically. When fully on plane, the nose drops back to run nearly horizontally again. At that point, you have to throttle back to avoid running really fast. That's when you get best fuel economy. On Damifino that's between 22 and 25 knots.

In any case, the 74 miles we made yesterday brought us to Hamm's Holiday Harbor Marina in Peoria, Ill. I actually passed the place because all I could see was a bunch of riverboat casinos. Clearly, some were, shall we say, "derelict," being drawn up on dry land. One, however, looked like it could be in operation. I figured that didn't look like the marina we were looking for. I was wrong.

When we sailed in, (boats still "sail," even powerboats without sails) we found a deep pool with floating docks presenting dozens of slips big enough to dock the Damifino. With no better directions, we pulled into the easiest slip to reach, and tied up.

The riverboats are a side business for the marina owner. In the past, shore-based casinos were illegal in Illinois, and a number of midwestern states. There was a loophole, however, that allowed casino gambling on floating platforms -- hence the launching of a slew of riverboat casinos.

That's all changed, now. The states realized how much revenue they were missing, and changed the laws to allow shore-based casino operations. That made the riverboats superfluous. Hamm's marina owner (Mr. Hamm?) has made a tidy business of taking these white elephants off the casino owners' hands, and cutting them up for scrap. Those in and around the marina pool are awaiting the gentle ministrations of low-wage workers bearing cutting torches.

I'm writing this post to thank all the visitors and commenters to this website, and to answer a few of the many questions I get constantly. As you've probably figured out, I almost never answer comments to this site. I've enough to do to vet comments as they come in, which I try to do every day, attempting to separate real comments from spam. I publish what appear to be legitimate comments to blog entries, and delete what looks like spam.

Many commenters ask for link exchanges, which I do not do. The purpose of link exchanges is to pump up external links for websites, but search engines know all about that strategy, notice it immediately, and automatically mark down sites who use it. Thus, instead of boosting a site's ranking, link exchanges can actually downgrade it.

On the other hand, we do like to have other sites use quotations from our site. There's no need to ask permission. The correct way to handle the situation is to separate direct quotes off between quotation marks, and provide a link to the blog entry. The best way to get the correct link information is to go to the page containing the quote, then copy the text that appears in your browser's address window. Then, paste it into the URL field in your blog software's link dialog box. This covers you with regard to copyright issues, proves to your readers that you didn't just pull the quote out of thin air, and gives me credit for the information. If you look back over my posts, you can see how it's done, as most posts include references to online research that went into the entry.

If you really need to contact me directly for some reason, feel free to use the link provided on the blog page to reach my website. There you will find my email address, which you can use to contact me directly.

A few commenters have asked about my providing guest posts, or writing other copy for their publications. The answer is, "yes." It's what I do, and have been doing professionally for 25 years. For more information go to my website, where you'll see the services I provide. Basically, I provide written content for print and online publications, and ghostwrite material to be published under the client's byline.

Those are the main questions I'm asked by commenters to this blog's postings. Thanks for taking an interest.

Author C.G. Masi's forthcoming novel looks at how technology developers go about their business in a corporate environment.

Many thanks to the loyal readers of this blog, who have put up with a low posting frequency over the past few months. My excuse is that I've been trying to get my next book into production. It's nearly there, so I should be able to provide more frequent posts to this blog.

Readers who enjoy my commentaries on how technological advances affect current events will have a lot to interest them in the book, which should be in bookstores around mid-summer. Entitled Red, it is a novel whose main characters work in a private applied-physics research company. The title comes from the nickname for the central character, Judith McKenna, who is a tall, athletic, young mathematician, who tosses everything away to search for her missing father after the authorities have exhausted all conventional means of finding him. Her faltering quest is saved by Doc, her mentor and sometime lover, who shows her how to organize the scientific and technical resources she didn't even realize were available to solve the mystery.

To reach her goal, she needs to learn techniques of organization, resource allocation, team building, and decision making under uncertain conditions. If you thought such issues were dry and academic, it's because you haven't seen them played out in the emotionally charged, risk-filled environments where real-life technology developers live and work, where millions of dollars, careers, and even lives are often at stake, and any mistake can lead to disaster.

If you think that's hyperbole, take a look at what's happening right now in the Gulf of Mexico.

We're now doing the final polish edit on Red. The schedule calls for that to be done before the end of June, at which time the book will go directly into production.

Most of the work is now in the hands of others, so I will have more time to devote to looking at how technology interacts with society, which is the focus of this blog. I plan to start by sorting through the issues surrounding the Gulf oil disaster. What actually happened? Who should really be pointing fingers at whom? Are the actions contemplated by the Obama Administration likely to help the situation, or make it worse?

Hopefully, I can help make sense of it all.

Apologies to Mark Twain (aka Samuel Clemens). The original quote was "... the report of my death was an exaggeration" in a short note written in 1897. Source: University of Sydney

In the roughly quarter century since Al Gore supposedly invented the Internet, pundits have repeatedly posited the impending death of print publishing to a gullible public. So pervasive has been this story, and so credulous the audience, that many publications have, in fact, woken up with stakes through their hearts.

Recently, however, reports to the opposite effect - a resurgence of advertising support for traditional (as opposed to Web based) - publications has been spotted in the business news. Most recently, an article appeared in Editors Only that concluded: "Contrary to all the buzz, online will not obliterate every print edition. Some publications will be online, some in print, some in both. In the end, success will lie in the coexistence of print and online. That's the real

future. That's the end of the rainbow."

This trend squares with apocryphal reports we've been receiving that advertising support for print-based trade magazines, specifically, is stabilizing, although at a diminished level. According to one marketing executive at a major vendor of measurement and control equipment, "Online advertising is effective for generating leads for sales of specific products, but print advertising is necessary to build brand awareness."

We do know that, aside from search engines, the most successful websites are online catalogs, such as Amazon.com, through which visitors can comparison shop, and purchase actual products online. But, that's not what traditional print magazines do best. Advertisers supported print magazines based on their percieved positions as authoritative suppliers of information readers seek. The theory was that when a reader saw an ad in a respected magazine, they tended to view the advertiser as a leader in their field, and their products as more desirable than those of vendors. That theory held up well for several hundred years.

The Internet, however, has not developed the same kind of respect. With the proliferation of social media, which visitors know perfectly well does not adhere to the same kind of journalistic standards we expect from print publications. In fact, everyone knows that Internet content is replete with misinformation, disinformation, and out-and-out lies, in addition to well researched and thought out reports and analysis. The doctrine of caveat emptor, literally "buyer beware" is the order of the day when viewing online material.

Under those conditions, it is much more difficult for a vendor to build brand awareness, and respect through advertising. Print magazines spent a great deal of effort to earn reputations as reliable suppliers of information. Online publications have, generally, not. In fact, social networking media seem to go to great lengths to earn the opposite reputation: that anyone can say anything, whether it has basis in truth, or not.

We suggest that a new model for magazine publishing - which a number of publications have been developing - is the blueprint for the future. These publications combine printed and online content. The print versions provide in-depth analysis that provides an authoritative backdrop for display advertisements that promote vendor company brands. The online versions provide rapidly updated news, reviews, and trends information that provide a compelling backdrop for product-related advertisements. Advertising in these publications is not an either/or proposition. Advertisers are encouraged to purchase combined programs that place image-building ads in print, and ads for specific products in online outlets. Perhaps this, or something very much like it, is what's really at the end of the rainbow.

Ice cliff, Barne Glacier, Antarctica Source: University of Washington

This entry's title is a line from Roadhouse Blues, sung by Doors lead vocalist Jim Morrison. I think of it every time I find someone making important decisions about what to do now based on what they think is going to happen in the future. Of course, such behavior is the closest there is in Zen Buddhism to a sin. Non-buddhists, in general, don't have any idea what a horrible thing it is to sacrifice what you have today in order to secure some reward in an imagined future, so they do it, and even feel proud of it.

Eeeyyyeewww!

A case in point is the perenially stalled movement to curb carbon emissions to avoid global warming. The Intergovernmental Panel on Climate Change (IPCC) in 2007 claimed: "Warming of the climate system is unequivocal ... ." It goes on to detail a raft of dire consequences if we don't heed their warning, and make drastic changes to our lifestyles and energy infrastructure.

So, let's hypothesize a future in which governments of the world gang together, and force their citizens (remember, this is just an hypothesis) to conserve energy by, for example, installing gadgets that won't let you dry your clothes before 10:00 pm, drop your thermostats to, say, 65 degrees in winter and raise them to 80 degrees in summer. They mandate use of electric vehicles that won't go over 55 mph, and can't go farther than 30 miles before recharging (thus limiting personal travel to a radius of 15 miles), and many other good ideas.

Let's say that this goes on for two generations, or about 40 years, at which time the sky is clear and blue, and it's damn cold by anyone's standards. So, roughly 5 billion people have been miserable for forty years (that's one year for each of Ali Babba's thieves) in order to avoid a climate catastrophe that nobody knows would have happened, anyway.

Then, an asteroid falls on 'em and wipes 'em all out.

Is this good planning? Is it based on good science?

The answer to both questions is "No."

I'll leave as an exercise for the reader to figure out why it's bad planning. It is, and that's why the "Green" movement has been stillborn all these years. While everyone is willing to go along with the ideas that global warming is "unequivocal," that it's bad, and that something must be done. Nobody believes it enough to take action based on it.

It's bad science because of the use of the word "unequivocal" in the report summary.

No scientist worthy of the title would use the word "unequivocal." Any sentence containing the word, without a counterbalancing negative (such as in "No scientific theory is unequivocal."), is prima facie not a scientific statement.

On July 5, 1687, Sir Isaac Newton published Philosophiae Naturalis Principia Mathematica, a three-volume book that was the seminal work for the science of physics. Nearly three centuries later, Albert Einstein published his special theory of relativity, which, among other things, showed that Newton had, after all, gotten it wrong. He followed that up ten years later, in 1915 with his general relativity theory, which pointed out how Newton got it wrong.

It's now 95 years later, and we're still trying to figure out what's wrong with Einstein's theory. We know he got it wrong, we just don't know what's wrong with it. So far, it's the second most successful scientific theory of all time.

The honor of being the single most successful theory ever elucidated goes to Darwin's theory of evolution by natural selection. On November 24, 1859, Charles Darwin turned the discipline of life science on its head by publishing a little tome entitled On the Origin of Species. It's now over 150 years later, and we still call it the "theory of evolution" despite its proven success. Scientists (the real scientists, not the pseudoscientists that creationists like to quote) realize that there's probably something wrong with it, but so far nobody's been able to get a whiff of what that might be.

In science, no statement is ever unequivocal. It's only the best idea we have at the time. So, if it's unequivocal, it's not science.

Signs of global warming

A flurry (pun intended) of articles in today's issue of The Wall Street Journal prompted me to drop another post about the controversy surrounding climate change research and efforts to curb global warming. Readers who have followed my posts here and in the Ask Charlie blog I wrote for Control Engineering know that I'm no fan of the IPCC report upon which most of the current nonsense is based. It's not that I think that there's anything wrong with the basic thesis that dumping loads of carbon dioxide into the atmosphere will likely ratchet up global temperatures, my problem is that so much of the so-called research, and especially the conclusions drawn therefrom, are prima facie so much politically motivated dreck (or to use the proper Yiddish spelling drek).

As I see it, there are two basic problems. First, the conclusions are based on a sophmoric physical model. Second, who ever said that higher global temperatures would be a bad thing, anyway?

The theory of global warming is based on a simple physical model - the greenhouse model - which is, in turn, based on the solid physics of radiative heat transfer. Specifically, it starts with the observation that the opacity of most atmospheric gasses is wavelength dependent. That is, while most of these gasses appear transparent to visible light, they are more opaque (sometimes very opaque) to infrared wavelengths.

So, the radiative power flux of sunlight, a large fraction of which comes at visible wavelengths, gets through the atmosphere to warm the ground. The warm ground tries to radiate that power back out at lower wavelengths (basically, the color temperature of sunlight is about 6,000 K, while that of radiation from the ground is about 300 K). The infrared, however, is absorbed by the dense lower atmosphere. Ergo, the ground and lower atmosphere, which are roughly in thermal equilibrium, get warmer. Increasing the density of the more infrared-absorbtive gasses, especially carbon dioxide, (so the theory goes) will necessarily increase the infrared absorbtion, and lead to higher temperatures.

We teach this model as an example in second-semester freshman physics. It's simple, easy to understand, and illustrates the mathematics of radiative heat transfer (which is what we're trying to do in freshman physics). The only problem is that the model is dead wrong. The real world is vastly more complicated. The difference is so extreme that any conclusions drawn from the greenhouse model are unlikely to correspond to anything in the real world.

One of the biggest problems is that meteorologists have known for decades that the weather system is chaotic. Weather patterns cannot be reliably predicted for a time scale longer than about a week. Weather, of course, is critical to radiative heat transfer, so asking a climate model that uses radiative heat transfer to predict anything beyond about a week is simply stupid. Other parts of the climate system are similarly chaotic, such as solar flux variability, making the prediction of future climate via computer models an exercise in futility. It is of academic interest, but of academic interest only.

Moving on to the second problem, who says global warming is a bad thing, anyway? The medieval warm period (look it up) ushered in an age of prosperity, cultural advancement, and generally really good times. It was followed by the the Little Ice Age, which brought with it famine, plague, and death. Who th' heck wants that?

Lessons from history, and prehistory uniformly lead to the syllogism:

cooler = bad;

warmer = good.

You do the math.

First, I want to thank the large number of readers who have taken the time to add comments to my blog. I've been blogging for about three years now, and this is the highest volume of comments, and the kindest words in them, that I've ever encountered. It's very encouraging.

Second, I should apologize for being lazy about adding new posts. I've been busy with books. The third edition of my How-To book entitled How to Set Up Your Motorcycle Workshop is coming out momentarily (it was supposed to be out in mid-January, but the publisher warned me it would be delayed at the printer). I have a collection of short stories entitled Shakedown Blues, which is just out. I'm also hammering hard and heavy on the keyboard with my first full novel, provisionally entitled Red. I hope to have Red out sometime in the second quarter of 2010. I'll have more to say about these books later in this post.

The main subject of this posting, however, is blogging itself. I've received multiple requests for advice about blogging. Now, I do not consider myself an expert. Lots of other folks have blogs that generate a lot more traffic than mine. But, I've been at it awhile, so here goes.

Blogging is basically another in a long list of publishing methods. It fills a niche between social networking, and professionally produced news websites. Professional journalists treat blogging as the online equivalent of newspaper or magazine editorial writing. That is, they commit to a regular deadline schedule, and write more-or-less to a set length. Usually, they draft the copy for their postings using a word processor (WP), such as Microsoft Word (I use the Open Source equivalent: OpenOffice Writer). They revise and polish articles extensively in their WP, and transfer them to the blogging software for publication. I do a final polish in the blogging software, where I can see what the final result will look like, and then hit the "publish" button.

Blogging software was developed a few years ago to make it easier for journalists, who are generally not web experts, to create copy for Internet publication. I believe the original idea was to make it possible for journalists to bang out short, highly formatted articles quickly. The folks who wrote the software imagined that writers would type their articles directly into the blogging software, skipping the word processing step.

That goes to show that blogging software developers had no clue as to how professional writers work. Professional writers start by spending a pile of time researching what they're going to write, so they know what facts they'll use, and have organized and checked them beforehand. By the time they pull out the electronic equivalent of a blank sheet of paper, they already have a clear idea of what the article will be about, what facts they will include, what will be their "lead" (which is the first few sentences designed to pique the reader's interest). They also have a pretty clear outline in their heads.

They then bang out copy based on that plan. The idea is to avoid writer's block by typing whatever comes into their heads, no matter how inane, confused, or inappropriate. Then, they go back and revise the article to make sure it's clear, concise, interesting, and complete. They especially try to weed out extraneous material that shouldn't have been included, anyway. Finally, they go back to check for typos, spelling errors, bad sentence structures, and so forth. All this work is best done using fully functional word processing software. Blogging software just isn't up to the task.

Once the writer is happy with his or her manuscript in Word format, he or she can transfer it to the blogging software. The blogging software provides, usually, a window for entering the title, and another for entering the text. It also provides a WYSIWYG (what you see is what you get) view of the posting as it will appear on the website, and some means of adding images.

Professional writers are all familiar with the effect that text seems different when seen in its final form. It's a strange phenomenon where, when you look at the final copy in a letter, magazine, book, or whatever, you always see things that you wish you'd done differently. Typos appear out of nowhere. Sentences that looked great in the manuscript seem clumsy in the final form, and so forth. So, professionals always look at a final proof of their articles as the readers will see them before releasing them on an unsuspecting world. Blogging software provides that opportunity.

Another thing blogging software does is pre-format the article. The writer doesn't have to think about where to put the ads, where to put the navigation bar, what type face to use for the title, and so forth. That's all done ahead of time by a layout designer (who might be the author some time in the past), and enforced by the software itself. The author only has to worry about the words.

Don't agonize over what blogging software to use. All the blogging software I've used, and I've used four different systems, does pretty much the same thing, can be used pretty much the same way, and produces pretty much the same result. For this blog, I chose MoveableType for its compatibility with Google AdSense. I wanted to run Google ads, so I made sure the blogging software worked well with them.

I do not, generally, design my own layout, or set up the software. I hired a professional team through my Internet service provider (ISP) to set it all up and make sure it worked. I then did some minor tweaking to the blog's look and feel. I could do that because forty years ago I made the commitment to learn computer programming, and fifteen years ago I made the effort to learn how to build websites using HTML (the programming language of websites), and seven or eight years ago I taught myself how to write PHP (a language folks use to control all the fancy databases and such needed for interactive websites). Tweaking blog formats is a dawdle after that.

Most bloggers, who don't have the programming background, just use the templates the blogging software provides. That's what it's for, anyway.

So, that's a rundown on what it takes to write a blog. To be successful, you should post at least two entries a week. More is better. The most successful bloggers post every day. Some even post more than once a day.

I find that my readers prefer longer posts. I know bloggers, however, who post a few lines once or twice a day. I feel they'd be better off on Facebook or Twitter, but that's just my opinion.

Changing the subject, I promised to provide a little more information about my books for those readers who might be interested.

For some reason, the third edition of How to Set Up Your Motorcycle Workshop was delayed. It was supposed to come off the printing press by 15 January, but still isn't out. You can, however, preorder it on Amazon.com, Barnes and Noble, and other online booksellers. A few collector copies of the first and second editions are also available online for exhorbitant prices. Most motorcycle hobbyists are familiar with the book, but I think it might be of interest to more general readers who just like reading my stuff.

Shakedown Blues is a collection of motorcycle touring stories written originally for enthusiast magazines. I think they'd also be interesting to more general readers who like reading about road trips. Stealing an idea from Herman Melville, I've embedded the stories themselves in explanatory chapters that would be of interest to general readers, and to folks interested in some of what goes on behind the scenes at national magazine editorial departments.

The novel I'm working on now, Red, involves a transcontinental motorcycle trip; a six-foot three-inch red head with a chip on her shoulder; a mysterious biker with apparently limitless resources and a Zen attitude; an evil step father; and a lost gold mine. The title refers to our heroine's nickname, which she got for the color of her hair, and those cute little freckles she has all over ... . The story includes elements of science fiction, a murder mystery, sex, a love story (or four), more sex, eastern philosophy, a look behind the scenes at the biker lifestyle, a peek into how engineers develop advanced technology, and some hair-raising adventure. Did I mention the sex?

It'll be out in a few months, if I ever finish writing the thing.

Business cycles are driven by a macroeconomic feedback mechanism that has a multi-year cycle time. Employment is one of the last economic metrics to show recovery because the process starts with unmet demand for goods and services, and only ends with jobs.

In every economic downturn, Chicken-Little pundits squawk about how we can't have a sustainable recovery until employment figures show improvement. Any investor, and here I use the word "investor" in its broadest sense to include those who put resources to work, not just those who invest in stocks and bonds, who listens to this drivel is destined to fail, and fail disasterously.

Macroeconomics - the study of large-scale economic trends affecting an economy as a whole - is based feedback loops that drive business activity. These loops describe causal relationships between economic factors affecting business. For example, an increase in production levels generally pushes employment up. Each of these causal relationships involve a time delay. So, when production levels increase, especially from a depressed level, employment does not rise until production levels exceed capacity at the current employment level. This takes time, as does the process of hiring new employees.

These delays are what cause business cycles in the first place. If we use, say, buggywhip manufacture as a hypothetical example, we might say that it takes 18 months for the buggywhip business to respond to a sudden change in the overall demand for buggywhips. So, if New York City should pass a law banning motorized vehicles, so all the Yellow Cabs in the city had to be replaced by horse-drawn surries overnight, that would ratchet up demand for buggywhips. Because it takes 18 months for buggywhip manufacturers to respond, actual sales of buggywhips would not stabilize at a level reflecting the new demand until a year and a half later.

Business cycles occur because it is not possible for businesses to precisely meet demand. In the buggywhip example, assume that there are two buggywhip manufacturers in business at the time the New York law passes. They will both attempt to grab more than their fair share of the enormous new market. Part of driving sales is assuring customers that you can actually deliver the goods ordered. So, both manufacturers will expand production faster than necessary to just meet demand. In addition, during that first 18 months, it will be clear that the established manufacturers won't be able to meet demand. Outside entrepreneurs will see this as an opportunity to jump in to the expanding market, by starting rival buggywhip manufacturing operations.

The result is that some 18 months after the new law passes, worldwide buggywhip manufacturing capacity will greatly exceed demand. Inventories of unsold buggywhips will expand. Buggywhip prices will fall. Marginal buggywhip manufacturers will fail. Buggywhip production capacity will drop. By three years into the process, we'd be back to having inadequate production capacity to meet demand, and the whole thing would start over again.

Boom and bust cycles like that are not some aberration, or the result of faulty business strategies, or some market inefficiency that politicians can erase by passing laws, it's how things inevitably work. In fact, most complex systems, such as economies, consist of multiple such cycles that operate on multiple time scales. Basically, they're all chaotic systems, which is why long term charts of practically every economic indicator - from long-term jobs trends to prices for individual stocks - look like profiles of the Andes Mountains. They're all fractals, which is the pattern most often associated with chaotic systems.

Economic expansions, recessions, depressions, and recoveries are actually just business-cycle components. As any Taoist sage could tell you, whenever the economy is expanding, you know that a contraction is on its way. Similarly, a depression always presages a recovery. It's inevitable. The Great Depression of the 1930s was, when looked at from a longer perspective, just a particularly deep bottom of the overall business cycle. The huge expansion we experienced during the 1990s was, conversely, a particularly robust phase of the overall business cycle.

This latest contraction, which started about 2005, and will probably not completely play out until 2015, was another particularly nasty dip in the more or less regular cycle. It's as inevitable as the tide.

So, getting back to jobs data, and the usual panicky predictions of a so-called "jobless recovery," the reason employment data have not significantly improved is that it's just too early in the process for it to show up. Those who ask: "How can sales recover when employment is down?" simply don't understand how the business cycle works. Sales aren't driven by jobs, it's the other way around, with a significant time lag between.

Jobs are driven by production requirements. As any industrial engineer could tell you, production is driven by inventories, not by demand. Demand is an intangible that is very difficult to predict or measure. Inventory levels, on the other hand, are easily measured and better reflect a company's ability to sell the products it makes.

In the real business world, the first thing to recover after a recession is demand. It begins to recover when end users have had their belts cinched so tight for so long, that they have no choice but to by new stuff. Demand for food starts to rise, for example, when pantries start to look bare. It makes no difference whether the family bread-winner has a job or not, when there's nothing for dinner, somebody makes a run to the store. Even if you have to beg a cup of sugar from the neighbors, that sends the neighbors off to the store for more sugar, increasing the demand for sugar. Therein lies the disconnect between jobs and demand.

Demand seems to have hit bottom about six months ago. Since then, we've been working off inventory that built up at the start of the downturn, when production still exceeded demand. Next, production has to rise (pulled by further increases in demand) until it exceeds capacity at the present depressed employment levels. Only then will employment figures begin to rise.

Don't look for employment metrics to turn up until at least the end of the first quarter 2010. The reason it hasn't happened yet is that it's just too darn early.

With the global economy generally in recovery mode, nearly half of respondents to a survey conducted by Control Engineering magazine in partnership with Morgan Stanley expect sales of industrial automation equipment to increase in 2010 Source: Control Engineering.

Over the next week or so, I hope to share with you results of studies pointing the directions we can expect technology trends likely will take next year, and in the decade ahead. The good news for Americans, and for many national economies around the world, is that the recovery is exactly on track. Yammering about "jobless recovery" and doubts over the U.S. economy's ability to expand until full employment returns simply demonstrate the commentators' ignorance of how economies work.

Garden variety depressions, which is what we've experienced over the past five years, take many years to play out. Calendar year 2008 saw the acute contraction phase, but things had been unraveling since late 2005. After a contraction, comes a bottoming, followed by an expansion phase.

Economic recoveries - that is the bottoming and expansion phases of a dip in economic activity - start with stock markets, which anticipate the turn around in general economic conditions by some months. The reason stock markets anticipate recoveries is that investment professionals, unlike media commentators, do understand economics, and recognize harbingers of business improvement long before the improvement happens. Just as meteorologists know that when days start getting longer, Spring is just a few months away, investors know that economic harbingers, such as inventory levels stabilizing at high levels, pre-announce changes in economic trends by several months, and stock prices rise as these investors put themselves in a position to capitalize on the new trend.

After stock prices hit bottom and begin to rise, we start seeing signs that the downward pressure on business activity begins to ease off. High inventory levels, for example, begin to drop. Productivity begins to rise as businesses streamline to cut costs. Later, these more efficient businesses begin reporting better than anticipated earnings on still-falling revenue. Still months later, revenues begin to rise as individuals and businesses can no longer put off purchases that have been delayed since the beginning of the downturn. More months later, employment figures, which conventional wisdom seems to think should lead the recovery despite the fact that it never happens, begin to recover as the productivity gains of a few months ago prove insufficient to meet the growing demand for goods and services. Finally, very late in the recovery, large capital investments, such as in real estate, reach their bottoms and start to recover.

At present, the U.S. economy, as well as that of most of the world, is recovering nicely. Trends in measures like corporate earnings are showing the correct patterns in the correct order and with the anticipated timing. Even the jobless numbers are tracking exactly as they're supposed to. Back at the end of 2008, when the depth of the dip became apparent, knowledgeable pundits were able to predict that the unemployment rate would reach just above 10%, which is just what it did, and begin to recover in late 2009, which it also has done.

By the way, don't listen to all that emotional drivel about some fictional "real" unemployment rate being something like 18% instead of the published 10% level. "The unemployment rate" is a real, clearly defined metric that we use to compare one time period with another. The "real unemployment rate" that Chicken-Little types yammer on about is poorly defined and very difficult to measure, so it's useless as an economic metric. It's only use is to give fear merchants something to shoot their mouths off about to their poorly educated audiences.

One extremely useful metric that can provide prescience about general industrial trends is expectations among industrial automation buyers and sellers about their purchases and sales (respectively) in the coming year.

To determine whether the market for industrial automation equipment was beginning to ascend from the depths of this latest downturn, or were destined to remain mired in the muck at the bottom of the pit for awhile longer, our friends at Control Engineering magazine in partnership with analysts at financial services leader Morgan Stanley surveyed participants in the industrial automation market. The reason to look especially at sentiment in this market is that factory automation is arguably the most important trend in industrial technology of the late 20th and early 21st Centuries.

Early in the 20th Century, factory automation was generally non-existent. We (or more accurately, our ancestors) simply did not have the tools available to automate production facilities in any meaningful way.

By the middle of the 21st Century, on the other hand, we anticipate that factories will run essentially fully automatically. That is, there will be no production tasks that are not done by automated machinery. Humans will generally hold supervisory positions. There will be CEOs, managers, engineers, maintenance technicians, and such like, but the population of assembly line workers, for example, will drop to more or less nil.

So, unlike the situation a few decades ago, perhaps the best measure of industrial activity available at the start of the second decade of this century is the level of activity in the industrial automation sector. That is what the survey set out to study, and that is why it's the first thing we looking at as we peer into our crystal ball.

"I'm happy to report that the survey does, indeed, offer more than few rays of hope," wrote David Greenfield, Control Engineering's editorial director, when reporting the survey findings in his article entitled 2010 Global Automation Industry Outlook. "Overall, the findings appear to indicate that a bottom in the market has been reached, pricing is holding firm, and that customers remain loyal - all positive signs for global automation players."

Greenfield cited four key findings of the survey:

1. The automation market has already bottomed; modest growth will return in 2010;

2. There is no evidence of a price war in automation equipment;

3. There is limited differentiation between the spending outlooks for process versus discrete industries;

4. While highly cyclical, automation is a good business to invest in over the long term.

It is important to note that the second finding belies the fear that inflation might be a an immediate threat. Despite concerns over accommodative monetary policies around the world, this survey shows no sign of inflation's return in the immediate future. It's axiomatic that for inflation to appear, prices must rise. This survey of a significant sector of the economy shows no hint of rapidly rising prices.

Greenfield pointed out that the near-term trend in demand for automation equipment appears brighter than it did in early in 2009 because of the percentage of respondents expecting demand to increase, more budgets going up or staying level versus retreating, and increasing demand to replace aging equipment. In addition, pricing appears to be stabilizing in the near term. Few respondents expect to see prices fall, but neither are they expecting out-of-the-ordinary upward price moves by suppliers to help offset losses in the past year.

These results are exactly what we would expect at this stage of the present economic recovery. Pundits prophesying a double dip, an L-shaped recovery, or any similar pattern find no support for their views in this important economic indicator.

The dilemma with healthcare reform partly stems from our unwillingness to throw our neighbors to the wolves. Source: Selling Among Wolves.

The good news this week is the trend in healthcare reform. It looks like the U.S. Legislature is once again finding itself incapable of passing meaningful healthcare-reform legislation. If this trend continues, what we'll be left with sometime next year is legislation that makes just enough change to allow the President and Congress to claim a victory, but not enough to make any real difference. This is not surprising, since it's been the same story for every major effort taken up by the current crop of Senators and Representatives.

It's good news because it means the Federal Government will at least do no harm. Or, at least no harm that can't easily be undone in the future.

We actually can't fault Congress for failing in fact, even if they find a way to succeed in headlines. There's a basic flaw in our health care system that can't be fixed. It's actually a flaw in the philosophical underpinnings of our society: we are incapable of applying the 95/5 rule from systems engineering to many of our social problems. We're seeing it in healthcare simply because that's the part of our social infrastructure that has most obviously run into a brick wall.

The 95/5 rule, like many systems engineering principles, sounds precise and quantitative, but isn't. It belongs in the realm of fuzzy logic, which only a few academics, and practically nobody else, understands. Unfortunately, nearly all decisions human beings are asked to make must be made using fuzzy logic. Fortunately, the ability to do fuzzy-logic analysis accurately and at blinding speed is one of the human brain's greatest strengths. Even better, the recognition of both fuzzy logic's importance and humans' aptitude for it is growing rapidly.

The 95/5 rule is just one expression of the fuzzy proposition that, as progress is made in any cumulative effort, gains become ever more difficult to achieve. (To the fuzzy-logic mavens out there: I know I've not couched this proposition in any rigorous way, but to do so would require a lot of verbiage that only you and I would want to read. Everyone else would go away, and thus miss out on today's exciting episode.)

The rule is an extreme version of the more familiar 80/20 rule, which says that 80% of the effort must be expended to achieve the last 20% of the gain. Conversely, the first 20% of the effort generally achieves 80% of the gain. Stated more generally, and more accurately, the effort needed to make further gains increases roughly exponentially with the gains already made. More fuzzily: you reach a point of diminishing returns.

Use the 95/5 rule when you've already blown past the 80% level. The next stop, of course, is the 99/1 rule that says you'll need 99% of the already-expended effort to get the next 1% gain. We try not to go there.

How this applies to healthcare is the simple statement that the easy gains have already been made. The reason healthcare costs are rising so rapidly is that we are now trying to push healthcare well past the point of diminishing returns. The Quixotic goal is highlighted by Pres. Obama's stated goal of providing health insurance for every dang American regardless of their ability to walk through the woods without bumping into trees.

Basically, we're trying to keep medical progress moving along a linear track. Ergo, the cost is rising exponentially.

In a misguided attempt to "fix the problem," most of us have, instead, tried to fix the blame on a boogeyman: the health insurance system. The theory seems to be that, if we can come up with a clever enough formula for health insurance, the cost of healthcare will take care of itself. This seems to be the tack Congress is taking, and, thank God, it isn't working. The cost of healthcare is taking care of itself, alright; it's expanding to take over the Universe!

In future blog entries, I hope to take a look at why medical progress is hitting a wall, and why we're fundamentally unable to deal with the situation. By way of a preview:

Medical progress is hitting a wall because most of the medical conditions that killed off our ancestors have already been eradicated. That was the easy stuff - requiring only a half dozen millennia to complete. Now, all we have to do is the hard stuff.

Human society can't deal with the problem because our basic moral and ethical assumptions don't allow us to throw our fellow human beings to the wolves.

To be sure, I do not have an answer. Like almost everyone else on the planet, I'm not ready to walk up to another human being, whether a loved one or stranger, look them in the eye, and say: "You're too old/sick/feeble/whatever to live. Go die!"

I know a lot of people willing to consider it as a philosophical exercise, but not-a-one who could bring themselves to do it in fact. Well, except maybe some inmates of institutions for the criminally insane.

Therein lies our dilemma.