Thursday, July 19, 2012

Pathos of the Political Operative

This post will be brief, but to the point. Paul Krugman no longer discusses economics in his column, as apparently the hard work of coordinating his writing with Barack Obama's re-election campaign means that "economics" will be passed off as little more than a demand that the government go on a tax-borrow-print-spend binge.

In his latest column, he vociferously defends Obama's latest "you didn't build that" speech, which really was nothing less than a declaration of war against entrepreneurship. (Oh, I forgot. Many, many years ago, Krugman had a post on entrepreneurship in which he tried to interpret it from a macro viewpoint, claiming that there was little or no entrepreneurship during the 1980s.Gee, I wonder if Krugman is just trying once again to be a political operative, not an economist.)

Reading Krugman's caricature of how people have responded (he wants us to believe that entrepreneurs and the "superrich" are one and the same) to Obama's attack on free markets (his claim that any success is always the result of some sort of government-enforced collectivism), I wonder how Krugman then is justified in claiming that Obama has "created jobs." Please explain to me how that is done. Did Obama risk his own financial capital? No. He took money from taxpayers and gave it to political contributors, and then called it "job creation," and Krugman is right there with him. (Anyone who will defend the taxpayer-funded fiasco called Solyndra really is no economist.)

No one is going to say that a single individual builds an entire business; however, success comes about through mutually-beneficial cooperation, but that is not what Obama and Krugman are saying. Instead, they are appealing to collectivist thinking. Furthermore, his comments about Hoover Dam and the Golden Gate Bridge demonstrated his own ignorance about the private firms that actually built these projects.

Unfortunately, neither Obama nor Krugman understand even a whit about the role entrepreneurs have played in the economic growth of this country and in the world. But, then, Krugman's MIT mentor, Paul Samuelson, believed that communism was producing a magnificent economy in the Soviet Union. Like Krugman, Samuelson never let facts get in his way.

23 comments:

Anonymous said...

Oh dear God, what a blatantly strawman post. Why can't you be a political operative and an economist? You seem to do it very well since it is impossible to separate Austrian Economics from an inexplicable political conception of the role of the state and the power of democratic consensus.

Neither Krugman or Obama has ever said that innovation was the result of collectivist of government action. You are the one who jumped to that conclusion from the simple insight that those who claim they "did it all alone" are without a doubt part and parcel of a broader social, political, and economic world that has at some point HELPED enable them to succeed. You can't do it without people taking risks, but people don't take risks without that broader support system.

Even you write that " success comes about through mutually-beneficial cooperation" - well what exactly do you mean, and how is that any different from what Obama, Krugman, or Elizabeth Warren have been saying.

And if you want some better analysis I suggest reading -

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/19/the-debate-we-should-be-having-over-you-didnt-build-that/

And http://www.newyorker.com/online/blogs/newsdesk/2012/07/romney-obama-inventions-and-government-money.html

Or are those too "liberally biased" for you?

Bob Roddis said...

Here in Michigan, we have our version of "public investment". It's called DETROIT.

http://tinyurl.com/727wfoa

Oh, and where would Steve Jobs have been without going to his precious PUBLIC HIGH SCHOOL, well known in Hollywood films as centers of deep intellectual achievement.

And then the government creates The Fed so it can fund our entry in WWI, followed by the Fed-induced Great Depression, both of which lead to WWII and we're supposed to be so thankful for a few spin-off inventions from the Great Slaughterfests.

Bob Roddis said...

I know it's bad form to call the other side cultists, but……

http://tinyurl.com/cjabolw

Anonymous said...

Then your lovely rehash of the echo chamber warping of what Solyndra was all about. A year later have any charges been made? Has any evidence of criminal activity been established? Has the money set aside (through a program established by GWB) come at the serious expense of other major interests (big oil, big farm, big defense)? Just pathetic. You give real crony capitalism and real tyranny a bad name.

Anonymous said...

http://grist.org/politics/2011-11-10-the-latest-solyndra-silliness/

ALima said...

Taxes are not cooperation

Mike M said...

Anonymous said...

“Even you write that " success comes about through mutually-beneficial cooperation" - well what exactly do you mean, and how is that any different from what Obama, Krugman, or Elizabeth Warren have been saying.”

One is VOLUNTARY the other isn’t.
To paraphrase a bit from Shawshank Redemption; How can you be so obtuse?

Dune said...

Anderson simply believes that some entrepreneurs (namely in the 1%) are more equal than others. Therefore, all of diatribes are guided towards protection for this already entrenched group (which tends to spend more time raising Super PAC money and taking lawmakers on trips to Israel than being productive).

For someone so seemingly supportive of entrepreneurship, this is a strikingly one dimensional view of what creates success.

Is there not an argument that universal healthcare, for instance, frees a middle-class, would-be entrepreneur to leave his 9-5 and begin his own business? Or that sharp deleveraging at the state level destroys otherwise solid small businesses? While he regularly criticizes Krugman, Anderson's only mention of entrepreneurs is in the context of the wealthy elite or within the corporate structure itself.

Anonymous said...

"One is VOLUNTARY the other isn’t.
To paraphrase a bit from Shawshank Redemption; How can you be so obtuse?"

First, I am not sure if that is what Anderson was referring to exactly. Second, as I mentioned, now instead of arguing about the economics you are arguing about the politics. So you concede that nothing is "built by yourself," but you just don't like the idea of democratic consensus? So you agree that there is not such thing as a self-made man, but you just don't like where that support is coming from?

Anonymous said...

@Dune

Anderson's understanding of entrepreneurs is just so utterly naive. He particularly confuses entrepreneur with innovator, and a lot of the data does that as well. Labor department statistics consider anyone who starts a taxi company an entrepreneur, but Anderson is thinking about individuals who are behind billion dollar industries. They are not only entrepreneurs, but innovators.

And how can anyone credibly say that any of those people are self-made, or that Obama has stifled that type of ingenuity by calling for a return to tax rates from the 1990s, mild financial sector regulation, public-private healthcare, and a stronger EPA?

I mean has the number of patents all of a sudden declined precipitously? There were 520,277 patents filed in 2010. There were 485,312 filed in 2008.

William B Swift said...

You're a little late to this show; here's a response I posted to another blog last Tuesday:

>Every one who achieves anything builds on the accomplishments of other people

This is mostly an excuse. The prior accomplishments of others are readily available for almost anyone to build on. Having more resources available (money or time) makes it easier, but even the poorest person can read at the library and put their knowledge to use, if they were willing to work. (And if the local government thugs didn’t shut them down for lack of paperwork and protection money, sorry, I mean permits.)

Anonymous said...

My god that is a horrible response! First, where is all this institutional knowledge deposited? You mention a library for crying out loud!

And the argument is not that you build on the accomplishments of others, but that you are inextricably a socially embedded creature. I have an idea for a better light bulb. But, to develop that idea I benefited from a long list of benefits that I did not pay for directly (from my upbringing to the clean air I breath). So when I secure the funding and build my new light bulb factory I cannot credibly say that I built this all on my own. I am not denying the importance of entrepreneurship and innovation (it takes someone to have that spark to consider a new light bulb), but let us not overstate things, which Anderson does.

As far as the "onerous" burden of government regulation and permits. I am personally a small business owner, and at times it is frustrating to comply (for me in particular with Department of Transportation Commercial Vehicle requirements). But I am smart enough to realize that a) that is mypoic and b) it is really not impacting the business in any significant manner.

It is not like regulations are invented out of thin air! They have precedent behind them. Could there be archaic regulation? Of course, but that does not deny the idea of regulation. I mean the Cuyahoga River was on fire for crying out loud!

Mike M said...

Dune said:
“Anderson simply believes that some entrepreneurs (namely in the 1%) are more equal than others."

Really? I don’t recall him slicing and dice into categories. You appear the only one trying to obscure the issue with trying to divide and distort.

“Is there not an argument that universal healthcare, for instance, frees a middle-class, would-be entrepreneur to leave his 9-5 and begin his own business?"

Brilliant Idea! Let’s take your logic further shall we. If “we” (somebody needs to define this “we” guy) provide the middle class healthcare, food, housing, clothing, transportation etc., just think of the creative entrepreneurial energy that will flow as a result. Why “we” will be the envy of the world. Its genius!

Mike M said...

Anonymous said @ July 20, 2012 2:37 PM

Wow you are truly gifted. Apparently you possess the ability to conduct a Vulcan Mind Meld from great distances. You think you can actually tell me what I am thinking. You should take that act on tour. You’ll make a fortune.

First: I’m happy to take politics out of a discussion about economics as soon as politics gets out of economics. That is a different proposition than Krugman who uses the cover of “economics” to advance a political agenda. Can you understand the distinction?

Second: The questions in your second paragraph are just plain, how shall I say it,…stupid.

Of course nobody builds anything by themselves. Whatever public infrastructure might be utilized in my business I helped PAY for. Whatever private resources I tapped into to run and grow my business, I PAID for.

Consensus democracy absent a proper Constitution that protects individual liberties and property rights is nothing but mob rule evolving to a kleptocracy. So no, without those protections, I don’t like the idea of democratic consensus. Why would you?

Finally you have twisted the concept of “self-made man.” Put 10 people in a controlled environment giving them all the same resources and opportunities and some will create and some will languish. That is nature of man.

Anonymous said...

Man you are a moron. It was YOU who tried to impute something from what Anderson wrote. I merely noted that.

Your argument is primarily political! It is about the basis of social provision. Your "economics" advocates for a much clearer political agenda than anything Krugman writes about. It calls for a social order that has never existed in human history. Besides, Anderson's critique of Krugman's political leanings completely ignores his blog writings.

You have a very limited view of what enables you to succeed. There is much much more to it than paying taxes to MAINTAIN roads and bridges. The notion that Steve Jobs could have launched the ipad without years of accumulated research and innovation (funded publicly and privately), a stable political environment, clean air and good health is ridiculous. And that is a very partial list. While I respect you paying taxes to pay for infrastructure, you are actually advocating for not paying those taxes anymore.

Your view of consensus democracy and our constitutional order simply highlights your radicalism, which is not shared by the majority in this country. You give real tyranny a bad name.

And finally that pitiful example of ten people in a room who are magically GIVEN resources! And since you are looking at some sort of magical state of nature, I assume you accept a scenario where one person simply kills the others and keeps all the resources to himself?

Mike M said...

Well Anonymous where does one begin with the vacuous rant of yours.

1st. I didn’t input Anderson. It was just thinking critically about his comments. Nice job on the name calling by the way. My criticism is directed at your logic and flawed philosophy. Not you as an individual. But I understand when you run out of intellectual arguments, name calling is all you have left. So you’re forgiven.

2nd It’s not my “economics.” Nice putting that in quotes as it reveals your passive aggressive attitude toward any philosophy that is non-statist. I find the Austrian viewpoint more aligned with the reality and natural order of human behavior. It is not without its flaws since anything created by man has flaws.
And what social order is that you refer to? Liberty? The ability to live in an environment with maximum liberty and minimum coercion? There was a period in time when slavery always existed “human history.” Would you have argued not evolving beyond that?

3rd I know EXACTLY what it takes to succeed and what failure feels like. When you run a business and live with it 24/7/365 you are completely connected to every nuance. Don’t you dare try and preach to any business owner they don’t know what it takes.
Without capital allocation, risk taking, ingenuity, drive and ambition, any alleged accumulated research and innovation is meaningless. It’s a dead asset. Meat rotting on the shelf.
And how is seeking an environment with minimal government in the economy the same thing as not paying taxes for infrastructure? I said no such thing. BTW is government the only way those things can be done?

4th Radicalism? Apparently you have no understanding of Constitutional history at all. Ever read the Federalist Papers? Any of them? Understand them? Even know what they are?

5th The ten people example was an illustration. Now you’re taking obtuse to a whole new level. The ridiculous comment about one person killing the others for the resources demonstrates you are completely devoid of all understanding of the concept of individual rights and respect for the same.

Do yourself a favor and read The Law by Bastiat. In fact read it 3or 4 times.

Anonymous said...

Man its like shooting fish in a barrel. You are truly grabbing at straws here.

1)The "Chronology of Insults" starts with you @ 11:48 calling me obtuse. Then at 2:37 you imply that I am stupid. But don't let facts get in the way of your fantasy world.

2)My placing economics in parentheses is the equivalent aggressiveness you take toward any other attitude but your own. However, in the context of my comment it was with regard to the debate over economics vs politics. Your statement above just confirms that your economics is simply derivative of your politics, which is why I placed the word economics in parentheses to begin with. You don't really have an economic theory, you have a political theory.

3)You accuse me of patronizing while responding with perhaps the most patronizing comment on here! For the record, I have run a successful small business for over a decade (see my other comments here). I understand the regulations I must comply with and the taxes I must pay. But I am also not myopic about it.

Regardless, you have not really addressed the point but simply recoiled into ideology. I NEVER denied that economic well-being does not depend on individual initiative and risk taking. I NEVER said that there are not alternative ways of securing common resources outside of government. You, however, seem to deny that both a robust investment into public institutions and a public funded socio-political environment facilitate such risk-taking.

Nor have you shown how the current government has impeded risk taking or business creation in any serious manner.

4)I have read every single one of them. Have you? BTW if you now support the idea of public funding of infrastructure, how do you square that with your prior association of taxation with tyranny? You can't have your cake and eat it too.

5)I think my comment on YOUR example is insightful since you presuppose a political and social structure to begin with (people are grouped and are GIVEN resources). Then your simplistic understanding of "natural rights" also presupposes a social contract or some political arrangement to protect them. Is all this established on mutual respect, love and understanding? Sounds hippiesh to me! Go back and read your Hobbes. Or better yet, go back and read your Bastiat!

Mike M said...

Anonymous, you really struggle with critical thinking through distinctions.

intelligent people can at times be obtuse and say stupid things. I said you were being obtuse and said something stupid. Got the difference? Or are you in a transitory temporary state of hypersensitivity that prohibits your otherwise fully functioning intellect from recognizing that? Notice I want to be careful, lest you think I am calling you hypersensitive versus a temporary condition all humans suffer from at times.

2) I have both an economic and political theory. Until such time as politics removes itself from economics back to a minimalist constitutional role, the two must be addressed coincidently. I take a "aggressive" position against anyone that suggests or advances a policy that I as an individual should be subordinate to the collective by force.

3) if you ran a business then you should know better. Unless your business was state dependent.

How would one read and tie together your other comments as you post under anonymous. At least some associate a name here.

I don't deny that "public funded socio-political environment facilitate such risk-taking. "
My point was that such activity beyond securing public safety, individual and property rights is where the problems start. See the difference?

You said "Nor have you shown how the current government has impeded risk taking or business creation in any serious manner. "

How can someone who allegedly run a business possibly say such a thing?
It is disturbing how many entrepreneurs and equity people I know that are on the precipice of "going Galt." They won't state it publicly, but if you know them well enough, one on one they will express it. Now people might arrogantly wave their hand and say so what others will fill in. First, don't be so sure about that. Second what opportunities have been lost because these folks have taken themselves out of the game.

4) every single one? No. Most ? Yes along with a significant about of collateral material bout the subject.
As for the squaring question, you're really having difficulty discriminating the differences between paying for the proper Constitutional role of government and the monster that exists today.

5) your example continues to be stupid. Your EXAMPLE I said. Re-read #1 so you don't get upset. You further compound it with your "mutual respect, love and understanding" comment. I've cited several times the role of a proper Constitution and how it can secure the foundation for a properly functioning economy. You continue to dismiss thinking its political ideology.

Hiram J Goldstein II said...

Mike, don't argue with Marxist name-callers. They're not capable of critical thought, or they wouldn't be spouting off Marxist nonsense to begin with.

Anonymous said...

I still don't see how saying that what I say is stupid is any different, but if your intention was not insult my apologies.

I have no problem with you having a political theory, I just wish that Anderson would stop hiding behind this shield that he is an economist while Krugman is a political advocate. He is both, and so are you and Anderson. I happen to fundamentally disagree with your political premises. I find it utopian, hyperbolic, ignorant of democratic discourse, and a radical revisionist (and impractical) reading of the constitution.

Now the fact that my personal experience of running a business, which really is not state dependent, should really be eye opening for you. I just don't see the "intrusive state" as really impacting my business. It is more of a nuisance, and once I think a little deeper about it I am glad to comply with most regulations. That does not mean I think that all regulation is still useful. You know what did impact my business? Low demand due to the recession.

And once again, by bringing up "equity guys" you are perpetuating a very narrow conception of the entrepreneur.

You are also equivocating now between saying that you support public infrastructure and now you support a minimal state that simply enforces property rights and public safety. That just brings us back to a political argument whether a state that simply enforces property rights (without some prior equalization of conditions) could ever become a reality or work.

Your claim that the current state is a "monster" is a matter of judgment. I find your constitutional interpretation narrow and in fact very much departed from most of the founder's intent. Not that the founder's had everything figured out either.

And it was your example of ten people in a room, each allowed to pursue their own interest given a limited amount of resources handed to them. It is not a stupid point. It still presupposes some form of political or social community to begin with where judgments are made about the proper distribution and protection of resources - whether through the divvying of property rights or by some other criteria. The point is, again, that Austrians are primarily political advocates.

No need to call me a Marxist (what ever that means). We simply have a disagreement over what is the proper foundation for social and political order and a different view of what our current state actually is - a safety net/insurance provider or a predator? Democratic or coercive?

Mike M said...

Anonymous,

" I happen to fundamentally disagree with your political premises. I find it utopian, hyperbolic, ignorant of democratic discourse, and a radical revisionist (and impractical) reading of the constitution."

I'm not sure you understand my political premise enough to render an opinion. As for the reading of the Constitution, I find it amusing that an adherence to the core fundamental philosophy of the founders would be described as "revisionist" or departing from their intent.

If you have as you claim studied Constitutional history and the philosophy ( not just USSC history) and still make the above assertion of my position is a revisionist departure, the you have violated the principle of non-contradiction. A thing can't be A and non A at the same time.

My reference to equity guys is the private equity sector, not just entrepreneurs.

BTW I'm not "equivocating" as you allege. It's about drawing a line and distinction. Discriminate the difference.

Just to be clear I didn't call you a Marxist. I don't know if you are or aren't.

You said: "We simply have a disagreement over what is the proper foundation for social and political order and a different view of what our current state actually is..."

You got that right. I value the individual above the collective. You are happy to subordinate the individual to the collective under the guise of benevolence.

Anonymous said...

Entrepreneur tends to more closely resemble "rip-off artist with more seed money behind themselves than the originator" in this country … so why all the ivory-tower treatment of the vaunted unicorn entrepreneur class?

I, too, wrote about Krugman's latest and I also have issues with the man, though not the same as Anderson -- who I'm sure is a nice guy and he probably finds it quite difficult to separate himself from the terminstic screens and self-affirming logic bundled up in the high-priest class of the neoliberal status quo.

http://frustratedhypocrite.wordpress.com/2012/07/21/take-krugman-as-you-like-but/

Anonymous said...

Entrepreneur tends to more closely resemble "rip-off artist with more seed money behind themselves than the originator" in this country … so why all the ivory-tower treatment of the vaunted unicorn entrepreneur class?

Yeah, and most of the fake enterpreneurs get money from the... government. Which is precisely Anderson's point.