Eli Dourado on how the sausage of technology policy is made, the relationship between total factor productivity and technological progress, airships, and more. Eli is an economist, regulatory hacker, and a senior research fellow at the Center for Growth and Opportunity at Utah State University. In the past, he was the head of global policy at Boom Supersonic where he navigated the thicket of regulations on supersonic flight. Before that, he directed the technology policy program at the Mercatus Center at George Mason University.. Eli’s Website Eli on Twitter Transcript audio_only [00:00:00] In this conversation, Eli Durado. And I talk about how the sausage of technology policy has made the relationship between total factor productivity and technological progress, airships, and more Eli is an economist regulatory, hacker, and senior research fellow at the center for growth and opportunity at Utah state university. In the past, he was the head of global policy at boom supersonic, [00:01:00] where he navigated the thicket of regulations on superstar. Before that he directed the technology policy program at the Mercatus center at George Mason university. I wanted to talk to Eli because it feels like there's a gap between the people who understand how technology works and the people who understand how the government works. And Isla is one of those rare folks who understands both. So without further ado my conversation with Eli Dorado. So just jump directly into it. When you were on a policy team, what do you actually do? Well that depends on which policy team you're on. Right. So, so in my career you mean, do you mean the, in sort of like the, the public policy or like the research center think tanks kind of space or in, in, in a company because I've done both. Yeah, exactly. Oh, I didn't even realize that you do like that. It's like different things. So so like, I guess, like, let's start with [00:02:00] Boom. You're you're on a policy team at a technology company and. Yeah. Yeah. So when I, when I started at boom so we had a problem. Right. Which was like, we needed to know what landing and takeoff noise standard we could design too. Right. Like, so, so we needed to know like how loud the airplane could be. And how, how quiet it had to be. Right. And, and as a big trade off on, on aircraft performance depending on that. And so when I joined up with boom, like FAA had a, what's called a policy statement. Right. Which is, you know, some degree of binding, but not really right. Like that they had published back in 2008 that said, you know, we don't have standards for supersonic airplanes, but you know, like when we do create them they, you know, they're during the subsonic portion of flight, we anticipate the subsidy Arctic standards. Right. So, so for, [00:03:00] for, for landing and takeoff, which is like the big thing that we are concerned about, like that's all subsonic. So we, you know, so that sort of the FAA is like going in position was like, well, the subsonic standards apply to, to boom. And so I kind of like joined up in early 2017 and sort of my job was like, let's figure out a way for that, not to be the case. Right. And so it was, it was basically, you know, look at all the different look at the space of actors and try to figure out a way for that, not to be true. And so, and so that's like kind of what I did. I started, you know, started talking with Congress with FAA. I started figuring out what levers we could push, what, what what angles we could Work work with to ensure that that, that we have we've got to a different place, different answer in the end. And, and so the, like, so basically it's just like this completely bespoke process of [00:04:00] totally like, even trying to figure out like what the constraints you're under are. Exactly. Right. So, so yeah, so it was, there's like a bunch of different, different aspects of that question, right? So there will you know, there's, there is statute, you know, congressional laws passed by Congress that had a bearing on the answer to that question that I went back to like the 1970s. And before there w you know, there was the FAA policy statement. There was, of course the FAA team, which you had to develop, you know you know, relationships with and, and, and, and sort of work with you have the industry association, right. That we remember of that Had different companies, you know, in addition, you know, in addition to boom, there, there were a bunch of other companies Ariane, which is no longer operating. We had Gulf stream, which no longer has a supersonic program. Or actually they didn't Edward admitted to having it announced really dead. They, you know, there was, you know, GE and rolls Royce. And so you had all these companies like coming together, you know, sort of under the, [00:05:00] under the watchful eye of Boeing, of course also. And, and so like the industry association had to have a position on things, and then you had like the international aspect of it. So you had a, there's a UN agency called Oko that sort of coordinates aviation standards among all the different countries you had the European regulators who did not like this idea that there were American startups doing Supersonics because, because the European companies weren't going to do it. And so they wanted to squash everything and they were like, no, no subsonic standards totally applied. Right. And so so that was, that's really the. The environment that, you know, sort of, I came into and I was like, okay, I've got to figure out, you know, I've got to figure out, build a team and, and, and figure out an approach here. And and, and try to try to make it not be the case that the subsonic centers apply. So we, so, you know, basically we tried a bunch of things at first, right. Like we tried to like, get our industry association, like all geared up for like, okay, well, we've gotta, we gotta fight this and they didn't want to do that. Right. So like, like [00:06:00] the other people didn't want to do that. Right. We tried a bunch of different angles in terms of, you know, we, we, what we ended up doing w w we got Congress to get excited about it and sort of, they, they started to, you know, there was a. Sort of a draft bill that had some, some very forward-leaning supersonic language that we, we you know, worked with Congress on it never passed in exactly that form, but it passed later in the 2018 FAA reauthorization. And then the thing that actually kind of ended up working was I had this idea in late 2017 was, well, you know, what. The, the sub the subsonic standard changes at the end of this year. Right. So, so so the end of 2017, so I was like, well, let's apply for type certification this year. Right. So we applied, like, we are nowhere close to an airplane. Right. And know we're close. Right. Right. And I was like, well, let's just, let's just, let's just like, screw it. We're going to apply like, like in 2017. And I had to like, get the execs to sign off on that. Right. We're going to do it, but we did. [00:07:00] So by the end of, I think December, 2017, we applied, I of course, you know, talk to my FFA colleagues and told them like, Hey, we're going to apply. Just so you know, they're like, well, that raises a whole bunch of questions. And, and that sort of got it, got them working down this path where they were like, well, you only have under part 36 of the FAA rules. You only have five years to to keep that noise standard. If, if you apply today and you're probably not gonna be done in five years. And I was like, that's true. We're probably not going to be done in five years, but we think that part 36 doesn't apply to us at all right. The way it's written. And then they went back and then they looked at it and they were like, oh, Part 36 doesn't apply to them like they're right. Like, you know, Eli's the first person in the history of Supersonics three per 36 and very closely. Right. And so and so then they went back and they like talked to their lawyers and, you know, they, I think came up with a new position in a new legal interpretation [00:08:00] w basically a memo that, that was, that was published that was like, okay, the subsonic standards don't apply and we don't have standards. We can start making some standards. And if we don't have one at any time for any particular applicant, we can make one for that applicant. We can, it's called the rule of particular applicability. So that kind of, once we got that, then in early 2018, like that kind of solved their problem. Like, and I think in in at least th th the domestic part didn't solve the international part, like from, from from Europe and so on. So. I mean, I, so, so if you think about like, what do you do on a policy team? Like you figure out like how, you know, how, how do you solve the problem that you have, that, that you were, that you were hired hard to fix and you just try things, try things until something works. It's part of the answer. Yeah. That's I mean, that's, I really appreciate you going into that level of detail because it's like the sort of like affordances of these things seem incredibly opaque. And just [00:09:00] for, for context, the subsonic standards are the standards that do not a lot, like that set a very like low noise bar. It's very stringent. I mean, the modern, the modern standards are pretty stringent. Like it used to be like, you couldn't, you couldn't basically like stand on a runway and have a conversation while plane's taken off these days. Like, I mean, it's, it's, it's gotten very, very impressive, but they, you know, the, the modern planes have gotten that way because they have high bypass ratios and the engines like big, big fans that move a lot of air around the engine core, not through it. Right. And so so that is, you know, that's just not workable when you're kind of trying to push that big fan through, you know, through the air at mock you know, 2.2 is what we were doing now. Now it's 1.7 that boom. But but but anyway, that's that, you know, that, that just doesn't work as a solution. So that's why, you know, it had to be different. Right. Right. And then did you say it's 30 S