It is the new jet from Cirrus Design, unveiled yesterday at Cirrus headquarters in Duluth, Minn. The single-engine "personal jet" will go 300 knots (345 mph), cover 1,000 nautical miles on a tank of Jet A fuel and seat five adults.

What you’re looking at is a full-scale mock-up. Cirrus has taken close to 200 deposits at $100,000 each. The jet will likely fly within 12 months, though it won’t be FAA-certified and customer-ready until 2010. Purchase price is expected to be $1 million to $1.2 million in 2007 dollars. Cynics are fond of calling mock-ups like these “paper airplanes” and not without reason. Aviation is littered with dreams. The technical challenges, high capital costs and steep regulatory hurdles make it very hard to build and certify a new airplane.

But Cirrus is a company to watch. It has delivered on its cool designs and wild promises before.

Cirrus first began selling FAA-certified airplanes in 1999. Novel features included a composite fiberglass airframe, a glass-panel cockpit and a parachute designed to float the airplane to a safe landing in an emergency. In only eight years, Cirrus piston aircraft sales have surpassed Beechcraft, Mooney, Piper and Cessna. 

Readers of this blog know that I am a happy owner of a 2005 Cirrus SR22.

Just this month I flew my son to Disneyland, myself to Mayo Clinic, and myself again to Colorado for a conference. Plus a handful of local pleasure flights. I do love my Cirrus airplane.

I could go on and on. (Some might say I have already.)

Today's discussion topic won't be on airplanes, but on this:

In your lifetime, what new products have completely reinvented their category and blown you away personally? I would put the Apple Macintosh, the BlackBerry, and Cirrus airplanes in this category. Maybe the iPhone too, though I think I will wait for Gen 2.

Share your enthusiasms! Post below.

One of the great threats to the American and global economies is trade protectionism. The 2006 election that gave Democrats majorities in the House and Senate tipped toward candidates who ran on protectionism. Think of Sherrod Brown, D-Ohio, Jon Tester, D-Mont., and Jim Webb, D-Va.

A virtue of Bill Clinton’s administration was his embrace of free trade. But wife Hillary is a wobbler on trade. To gain favor with the Netroots Left, she is mostly wiggling and wobbling portside, like the trade union Wobblies.

Which is all a great irony. The most iconic hip and progressive company in America is Apple–a poster boy for free trade! Take a look at this Hal Varian column  from today’s New York Times.

Here are Varian's first two paragraphs to get you warmed up:

“Who makes the Apple iPod? Here’s a hint: It is not Apple. The company outsources the entire manufacture of the device to a number of Asian enterprises, among them Asustek, Inventec Appliances and Foxconn.

“But this list of companies isn’t a satisfactory answer either: They only do final assembly. What about the 451 parts that go into the iPod? Where are they made and by whom?”

This is a terrific story of how the global economy works and showers benefits on the majority.

Steve Jobs is a political progressive. A recent Time magazine story says Jobs would like Apple board member Al Gore to run for president. If Gore does run and win, or if any Democrat wins in 2008, I hope politically progressive CEOs like Steve Jobs step up and stop the protectionist drift of their party.

What do you think? Does Apple’s success endorse free trade? Why aren’t more Democratic CEOs opposing their party’s drift toward protectionism? Is Hillary really an anti-trader, or is she just posturing that way to win the Democratic primary? And finally, what would happen to the U.S. economy and stocks if the protectionists took over in 2009?

Post your comments below.

Oops. But don’t expect an apology from U.S. Rep. Sander Levin, D-Mich.

As Larry Kudlow writes today:

“Late last week, [Levin] introduced a bill that essentially would abolish the 15%t capital-gains tax preference for risk investing, and raise it by 20 percentage points to the 35%  corporate and personal rate. This goes beyond an earlier tax attack on a public offering by the Blackstone Group, and would slam into all private partnerships, including buyout funds, hedge funds, venture-capital firms, real estate partnerships, and oil-and-gas deals.”

I hope President Bush vetoes Levin’s bill, if it comes to that. Giving cap gains a tax preference for risk investing is one of the smartest things the U.S. has done during the last 40 years.

The road to salvation started in 1978, when Rep. Bill Steiger, R-Wis.,  introduced H.R. 12111 to lower the capital gains tax rate. America’s economy and  markets were in the dumps in 1978. The case for a lower cap gains rate was best summed by a Wall Street veteran named Edward Greef, who testified on Steiger’s behalf:

"I’ve been in Wall Street since 1933. A reduction in the capital gains tax would unlock billions of dollars, much of which would be reinvested in new or small businesses, thereby creating jobs for hundreds of thousands of people," says Edward R. Greeff, a senior partner in Adams and Peck, a member firm of the New York Stock Exchange."

Time magazine reported the battle between Steiger and the Carter administration:

"Administration officials assert that these glowing predictions rest on unprovable assumptions. Treasury Secretary W. Michael Blumenthal claims that the Steiger amendment would cost the government $2.2 billion in revenue a year. He and other critics insist that there are more effective ways to stimulate investment: reducing the tax on corporate profits, increasing the tax credit that companies get on spending for new plant and equipment, and easing the tax on dividends.

"The main argument against Steiger is ideological: cutting levies so much for the rich would strike a blow at the whole principle of progressive taxation. The Treasury figures that the Steiger amendment would reduce taxes an average of $14,000 for people with incomes of $200,000 a year or more—and exactly 26¢ for people who earn from $15,000 to $20,000 and rarely get a chance for large capital gains."

Familiar class war stuff. But it was countered brilliantly by Richard Rahn, executive director of the American Council for Capital Formation. Rahn said:

"Support for Steiger is coming not from the fat cats but from middle-income people yelling 'I want a chance to make it!' The fat cat can protect his income. But the middle-income guy who still dreams of some day making it wants to know he can do it big."

That was exactly right in 1978. It is right today too. (Sadly, Steiger’s battle against the Carter administration might have killed the young congressman. He died from a heart attack on Dec.  3, 1978, age 40. The “Steiger Amendment” was passed in 1979. It lowered the cap gains rate from 49% to 28%.)

What are your views on cap gains taxes? Should a 15% tax rate apply to the “carried interest” earned by private equity and venture capital firms? In general, is a differential between cap gains taxes and personal income and corporate rates a spur to capital formation and entrepreneurship? If you were America’s tax czar with unlimited powers, what rates would you decree for personal income, corporate and cap gains?

Lots to chew on! Post your comments below.

My Forbes magazine editor, Merrill Vaughn, has vowed to send assassins to California if I don’t e-mail her a finished column today. I’d better get a’hustling.

Thus today’s blog is a short one. I bow to greater talents. Here is a great piece by Ben Stein on modern conservatism’s founder, William F. Buckley Jr. 

Stein’s best lines:

“What would the world be like if there had been no William F. Buckley? I can well recall even as a high schooler that Republicans were considered Midwestern stolid reactionaries with no ideas except to oppose generosity and kindness. I can well recall when being a conservative meant being without ideas and simply in opposition to those who had ideas. Or if conservatives had any ideas, they were just that them who had should continue to have and those who had not should rot.

“Then came William F. Buckley, seemingly out of the forehead of Zeus. He said that conservatives had more ideas and better ideas than leftists. He said that conservatives' ideas comported better with the basic dignity of the human personality than did socialism. He said that man would not only be richer under conservative principles, but happier, more moral and prouder of himself.”

Buckley made it fun to be a conservative. This fun spilled over into his friendships and hobbies. If you are looking for a great summer vacation read, you might try WFB’s first and best sailing book, Airborne.

What is your opinion on Buckley? What is his legacy? He shaped Ronald Reagan’s thinking—did he shape yours? Is there any conservative writing today with Buckley’s intellectual and popular appeal—and influence?

Post your comments below.

Street sentiment has turned palpably sour. Maybe that’s a good thing. So wrote Mark Hulbert yesterday in The New York Times.

Money quote:

“The Hulbert Financial Digest, which has been tracking the investment newsletter industry since 1980, has found that the stock market performs far better, on average, after periods when newsletters are very bearish than when they are quite bullish.

“That’s good news today, because the average newsletter editor who focuses on short-term stock market timing is recommending that his clients allocate just 30.2% of their equity portfolios to stocks, keeping the remainder in cash. By contrast, at the end of November last year, when the Dow industrials were about 8% lower, such editors as a group were advocating an equity exposure of 70.8%. That was more than double the current level and close to the highest allocation that the Hulbert Financial Digest has ever recorded: 79.7%.”

By Hulbert’s analysis, the new bearish mood is good for stocks. Contrarians, Hulbert reminds us, tend to outperform the flock.

More good news, if you’re looking for it: Earnings yields (around the world) remain higher than 10-year government bond yields (around the world). That’s also good for stocks. Combined with a worry wall that just got higher, things look pretty good.

What do you think? Is pessimism among financial newsletter writers good or bad for stocks? Will the contrarians win again? Or will the wisdom of the crowds finally prevail this time?

Are you optimistic or pessimistic about stocks now?

Post your comments below.

Our friend Andy Kessler, once a hugely successful hedge-fund manager himself, thinks so. He writes a scorcher in today's Wall Street Journal.

Juicy quotes:

-- "The dirty secret is that private equity investors really aren't all that good."

-- "Don't mistake financial engineering for company building."

-- "Borrowers chasing yield tend to forget about risk."

-- "Ten-year bonds have been backing up, with yields approaching 5.25%. This surely means money supply growth is slowing."

-- "No one can call a top, but there sure are signs of fatigue … Lenders are feeling stretched and may dry up their bottomless pit of funding."

Elsewhere, Kessler says a one-day, 1,000-point drop in the Dow would not surprise him.

Do you agree? Is such a hiccup imminent? Does Blackstone's IPO signal the top of the private equity boom? Public equities, too?

Post your comments below.

Flight School is where I am headed today. Esther Dyson's third annual powwow on air travel of the future starts tonight and continues tomorrow and Friday in Aspen, Colo., at the Aspen Institute.

I thought it would be fun to fly my Cirrus SR22 to Flight School. So I departed at 7:00 a.m. this morning from the Palo Alto airport. I'm posting this blog while cruising on autopilot at 9,500 feet over Modesto, accompanied by Jan & Dean on XM Satellite Radio. ("Surf City" ... two girls for every guy!)

Soon, I will climb to a cruise altitude of 15,500 feet to clear the highest of the Sierra Nevada Mountains. Route of flight will be dead east over central Nevada and Utah. While over the hamlet of Hanksville, Utah, I will turn northeast and fly toward Moab.

Then, I must make the day's biggest decision: where to land.

First option will be Grand Junction, Colo. The Walker Field airport has two runways, both long, and no terrain issues. Looks like an easy, safe approach. But not very convenient. If I land here, I'll have to rent a car in Grand Junction and drive two hours to Aspen. (Flight time from Palo Alto: 3 hours, 47 minutes. Average ground speed: 176 knots. Fuel used: 56 gallons of 100LL avgas.)

Second option is to slog on another 20 minutes in likely choppy mountain air and land at Rifle, Colo. The Rifle airport has just one runway and moderate terrain issues. Which means that, while landing at Rifle should be safe enough, it could be trickier than landing at Grand Junction. The drive from Rifle to Aspen is one hour. (Flight time from Palo Alto: 4 hours, 7 minutes. Average ground speed: 175 knots. Fuel used: 59 gallons of 100LL avgas.)

Third option is Aspen itself, another 22 minutes beyond Rifle. I've already ruled this out. The Aspen Pitkin Co. airport is surrounded by high mountains on three sides, so it is in something of a box canyon. Not forgiving of pilot mistakes. At all. The Cirrus gang says it is wiser to try Aspen the first time with a knowledgeable co-pilot. Being a chicken pilot myself, I'm ready to believe it. (Flight time from Palo Alto: 4 hours, 29 minutes. Average ground speed: 175 knots. Fuel used: 63 gallons of 100LL avgas.)

Wish me luck.

BONUS BLOG: Google And The Innovator's Dilemma ... Even kings are eventually overthrown, so Robert X. Cringely asks what kind of startup could seriously disrupt Google. Does that startup even exist? And where are the entrepreneurs right now? (Eating sushi in the Google cafeteria, says Cringely.)

BONUS BLOG #2: Buy The U.S. Dollar! ... So says Hong Kong asset manager Marc Faber here. Faber writes, "I only find one depressed and universally despised asset class: the dollar. But a dollar recovery should not be ruled out."

What do you think?

1. On flying, how many air miles a year do you travel? What changes would you personally like to see in air travel? Will small jets and air taxi services form a new business travel option that challenges the large commercial airlines?

2. Does Google have a serious challenger today? Will its first serious threat come from a large company such as Microsoft or a startup?

3. Time to buy the U.S. dollar?

Post your rants, raves and comments below.

Martin Wolf explains how "unfettered finance is fast reshaping the global economy" in today's Financial Times.

Terrific piece. Read it. Save it. Read it again every now and then. It's a wonderful map for navigating the modern world of finance and commerce. Wolf also explains the growing populist backlash.

Some highlights:

Finance has exploded. According to the McKinsey Global Institute, the ratio of global financial assets to annual world output has soared from 109% in 1980 to 316% in 2005. In 2005, the global stock of core financial assets had reached $140 trillion.

If my math is right, that comes to $21,500 per person in the world (assuming 6.5 billion people). This number astonishes me. It explains why today's global liquidity glut may last longer than many economists and investors think it will.

In 1980, bank deposits made up 42% of all financial securities. By 2005, this had fallen to 27%.

The percentage drop in bank deposits is even more dramatic in the U.S. This fact is not widely understood. The resulting confusion leads to such panicked reactions as this one on MSNBC: "People are saving at the lowest level since the Great Depression, and that could be a problem for the millions of baby boomers getting ready to retire. In fact, the Commerce Department reported Thursday that the nation's personal savings rate for all of 2006 was a negative 1%, the worst showing in 73 years. The negative rate means people are spending all of the money they have left after paying taxes--and then some. They are dipping into savings or increasing their borrowing to finance current spending."

Such weepy analysis entirely misses the fact that U.S. households have $56 trillion in assets, or about $25 trillion not counting real estate. Americans are rapidly accumulating wealth, if not "savings" as narrowly defined by bank deposits.

The new capitalism is ever more global. The sum of international financial assets and liabilities owned (and owed) by residents of high-income countries jumped from 50% of aggregate GDP in 1970 to 100% in the mid-1980s and about 330% in 2004.

Again, this is astonishing. It tells us that the world has experienced, in one generation, a boom of productivity and prosperity. Technology and capitalism have met indomitable human ingenuity and the desire for freedom and self-expression. What a magical combination.

What do you think? Is "unfettered finance fast reshaping the global economy" --and is this good or bad for humanity? How should it shape our investment decisions (e.g., do you think the global liquidity glut can dampen recessions and sustain the growth in stocks)? Or ... will all this good news be undone by a populist backlash resulting in new trade restrictions and the re-regulation of financial markets?

Post your thoughts below.

BONUS Blog: Has Steve Jobs Peaked? ... New York magazine's John Heilemann thinks so. He says the Apple iPhone is a defensive maneuver to protect Apple's music download business. I disagree. I think the iPhone will be a hit. I also think there is an emergent 21st-century global phone giant residing in the combination of Apple and Google. (What do you think?)

Yes, but not a raging buy.

As we head into summer, the S&P 500’s price-to-earnings ratio hovers in the 17.5 to 18.0 range, depending on when you take your snapshot. This translates to an earnings yield of 5.56% to 5.71%, higher (but no longer wildly so) than the U.S. 10-Year Treasury yield of 5.14%.

Which means that U.S. stocks are a decent, if not raging, buy. The advance-decline ratio of 1.2 shows breadth.

Still, I think European and Japanese stocks are a better buy now. The Euro Zone 10-year bond yield is 4.626%, and the Japanese 10-year bond yield is 1.985%.

Therefore, if you hanker to put new money in the market but also want to take the summer off and not worry too much, you might look at the iShares MSCI EAFE Index. 

Last week I blogged about my Cirrus flight to Scottsdale, Ariz., for a health checkup at Mayo Clinic. For apparent legal CYA reasons, I had to cancel the colonoscopy.

Fans waiting for a gripping account need not despair! Dallas Mavericks owner Mark Cuban airs his innermost feelings about a recent colonoscopy in his June 14 blog entry. Money quote:

“No where else can you rip off some huge farts and have three nurses and a doctor, while maintaining a very professional demeanor, tell you that you aren't done yet and demand that you let loose a few more.”

Thanks for sharing, Mark.

What do you think? Are U.S. stocks still a buy? Are European and Asian stocks a better buy? (And is Mark Cuban still full of hot air?) Post your thoughts below.

Here is VC alpha dog John Doerr, of Kleiner Perkins Caufield and Byers, speaking at the TED Conference in March. Doerr's speech is on green tech.

So far, so good. Who opposes green tech? I’d love to see cars go twice as far on a gallon of gas without compromising crash-worthiness. I'd love to fly more than 1,000 nautical miles on an 81-gallon tank in my Cirrus airplane--800 miles is my limit now. Each time I go to Asia, I am amazed by hotel energy efficiency. All the lights go off when you take your key card out of the slot and depart the room. When you return to your room and reinsert your key in the slot, the lights awaken. Why can't we do that?

What's not good, and scary, and maybe even manipulative, is how Doerr begins his talk. Pushing all the global warming fear buttons, Doerr outdoes his friend Al Gore. Doerr says: "I don't think we're going to make it." He chokes up while saying this. There is no mistaking Doerr's words and emotions. He really believes Earth is headed for irredeemable climatic catastrophe.

I like and admire John Doerr. His record of VC success is indisputable. What's more, Doerr's startups--Compaq, Sun, Intuit, Amazon and Google--have brought the world a ton of good. In interviews and so forth, Doerr has been generous to me, personally. He has been good to Forbes, too. Here is a piece he wrote, along with Bill Joy, for the Forbes 90th anniversary edition.

What are we to make of Doerr's "I don't think we're going to make it" comment? If I didn't know and respect Doerr, I would insert a sarcastic comment here. But because he's Doerr, and a nice guy as well, I will refrain. (My blog readers can say whatever they want.)

Instead, I will offer two opposing views.

One is a piece by Czech Republic President Vaclav Klaus from today's Financial Times. The title says it all: "What Is at Risk Is Not The Climate But Freedom." Here is the money quote:

As someone who lived under communism for most of his life, I feel obliged to say that I see the biggest threat to freedom, democracy, the market economy and prosperity now in ambitious environmentalism, not in communism. This ideology wants to replace the free and spontaneous evolution of mankind by a sort of central (now global) planning.

The other is a wonderful piece called "Apocaholics Anonymous" by Gary Alexander. This is truly funny--and sage. Send it to friends. (Thank you, Russell Redenbaugh , for sending.)

What do you think of John Doerr's TED speech? Does green tech only work in the context of global warming fear (e.g., "I don't think we're going to make it.") or should it be regarded as any other investment? Is Vaclav Klaus right when he says "ambitious environmentalism" is a threat bigger than communism? And lastly, what did you think about the "Apocaholics Anonymous" piece? (I loved it!)

Post your comments below.