Wednesday, August 15, 2012

Americans: No More Business As Usual

There’s been an interesting shift in the political scene in this country. Some would argue that it’s a shift toward populism, but I’m not so sure. I think this is more likely a shift away from the abusive system of the past where taxpayers get turned into piggybanks for the well-connected. Let’s discuss.

The difference between populism and where the public seems to be headed is actually quite dramatic. Populism tends to focus on destroying the current system of privilege, taking from the rich, and implementing policies aimed at remaking society in the name of the public. Because of the extreme nature of populism, it is often borderline violent and it tends to flirt with either anarchy or socialism. I don’t see any of that in the current political environment.

To the contrary, groups like the Tea Party want neither anarchy nor socialism. They don’t envy those who have, nor do they seek to crush the rich. What they want instead is to reshape the government to stop it from being able to do the bidding of the connected. Specifically, they want the government to stop guaranteeing the risks of big business, and they want the government to stop issuing two sets of laws, one which helps the connected and one which simultaneously hinders the unconnected.

This seems to be confirmed by a new poll conducted by Rasmussen. Indeed, this poll showed broad bipartisan opposition to cronyism and strong support for free market policies. Consider these results:
● Only 27% think it is “ever ok for the government to make investments in private companies.”
● 71% believe the private sector is “better than government officials at determining the long-term benefits and potential of new technologies.” Only 11% think the reverse.
● 64% think government money will be wasted if the government backs projects the private sector won’t.
● 66% believe crony connections drive most government contracts.
● Then there’s this: “By a 3-1 margin, voters believe elected politicians routinely provide help to favored companies.”
● And this: “Seven out of ten Americans believe government and big business work together against the rest of us.”
It’s the last couple that tell you what is going on. People saw trillions of dollars poured into the big banks to save them after they made horribly stupid bets on things that the banks themselves created after getting the Clinton Administration to change the law to allow them to take these kinds of risk. They saw how the entire financial system almost collapsed because 3-4 big banks fell apart and they saw how these same banks have returned to record profitability (and record size) while the rest of us get to pick up the tab. They saw how billions were funneled directly to unions through the stimulus bill. They saw how billions more were given to Obama donors under the guise of running “clean energy companies,” which went bankrupt within months of getting the billions. They saw GE lobbying to get nonsensical environmental laws passed and then turned right around and get waivers from those same laws. They saw how hundreds of billions in government contracts have been awarded on no-bid, sole-source contracts to companies that handed over tens of millions in lobbying money. They saw how loopholes were put into the tax code which protected only a handful of companies, or in the case of Charlie Rangel’s friends only one company. They saw bribes and sweetheart deals given for regulatory consideration. . . Chris Dodd and Countywide anyone? They saw average bondholders crushed in GM while the unions made out like thieves. They saw nonunion pension rights terminated. They saw a shakedown of Boeing. They saw attempts to tax and control the internet to protect contributors. And they saw no difference between Bush or Obama on any of this.

It is frankly surprising that people haven’t been more populist in their opinions. Outside of the leftist desire to steal from the rich and their rhetoric about getting even with the banks, the public has been remarkably calm. . . determined to change the game, but calm. And I think it is a real testament to the American public that their response to this pillaging and abuse has not been vindictive, but has been instead to demand the system be fixed so everyone can move on.

I think the Republicans better pay attention to this. I think Romney and Ryan will be great for this country, but they need to realize that the times have changed and the public now pays attention to who is sliding through the backdoor with their hand out. Business as usual must end.

80 comments:

Tennessee Jed said...

those are very good questions to ask, Andrew, and I must admit, I am somewhat puzzled myself as to what exactly is going on. I do think there is a segment of the population who traditionally vote Democratic who may be reacting as populists. I also think Ron Paul struck a nerve during the debates with a libertarian point of view. Lots of people agreed with a lot of what he said, but then he would slip on a foil hat so that you couldn't support him.

I personally agree that the favoring og the big has been a federal government thing and not a political thing. Both parties made it happen in the 90's. I don't think it was purposeful. When things go well for as long as they did, it was almost inevitable. I dislike Wall Street while recognizing it's right to exist. But, who can blame them for their reckless behavior when the government essentially said; no worries, you're too big to fail.

Patti said...

there is definitely change afoot, in direct opposition to obama's hope and change. part of me wonders if we can reverse the tide of takers and get folks back to responsibility for their own. it's going to be a painful road, but ryan gives me true hope. on the other hand, i'm not naive. i will side-eye all politicians until the job is done.

T-Rav said...

Interesting statistics, Andrew, and if Washington actually wants to do something about the system and Americans' mistrust, they'd better take care of it sooner rather than later. Historically, deferring these kinds of demands doesn't work out well.

StanH said...

I know it was coined by Nixon, sorry Lawhawk, but brilliantly pointed out an immutable political truth, the “Silent Majority.” We mind our own business, and follow the rules. Take responsibility for ourselves, and our families. Generous to others, because it’s the right thing to do. Stand when we hear “The Star Spangled Banner,” and proudly display the flag. Honor our soldiers, past and present. Embrace “American Exceptionalism,” understanding how damned hard it is, and was to get here. Very often this Silent Majority rises up, democrat and Republican and settles things down, we are at that point.

Tennessee Jed said...

one other way to look at this is that Americans want to get back to smaller and more local whether it is government or private enterprise. "Bigness" is something of a natural growth of capitalism. However, bigness breeds power and as we know; power corrupts regardless of whether it is the public or private sector.

And you are correct in your assessment that Romney and Ryan better represent a new and better way. Look at Obama. A lot of people bought his hopey changey dialogue only to be deeply disappointed. It is, of course, difficult to get things done with a divided government. Conservatives have not had an opportunity to get things accomplished. The White House does provide a bully pulpit if it is not squandered. I was encouraged by the 2010 election. But unless Romney wins and gets appropriate congressional support, very little will be accomplished. And if the correct things are done, there will be more than a few pissed off major donors if they don't get the traditional special treatment.

Individualist said...

Andrew

Great points.... my thoughts are this

So long as there is confidence that being active in the political process can make changes. So long as Americans have even a dim gleam that the system can fixed. So long as Candidates can be put in place and that voice can speak then this will be the goal of the Tea Party and the goal of the people.

Oddly enough in the black community in Chicago there is a movement that is unusaul among African Americans to date in that the federal democratic hegemony is being challenged.

They were on the Bigs. Calling themselves the New Broke party and claiming to be neither Democrat or Republican they call was that the Rahm Emmanuel was taking 4 million earmarked to help that community and instead was tearing buidlings down.

Reeling with 25% unemployment there mantra was "Violence needs a job" and their solution was that the individuals receive that money directly instead of going to the Chicago machne where they would never see it.

While it is still a ways away from convincing the majority of African americans to look away from the government for support and instead to themselves it is at least a beginning step to independence. They are seeing that the money is not really being spent on their behalf but on chronyism.

As long as people havea voice they will speak out and try to convince people to make changes. It is when the government gets to a point where it can silence that voice when you will see a change from getting back to the constituion change to a call for populism.

In America we still beleive we can make our own money. We are not Europe where it has to be taken from the nobility.

tryanmax said...

I'm okay with the term "populist" in relation to the current political shift, so long as it's understood as "American populism." It's decidedly different from its European cousin who was on display during the Occupy protests. The Tea Party is American populism, but it is not without political precedent, the sudden waking of the American electorate to the need to fix, rather than overthrow, things. It's the kind of populism you get from free and learned people--savvy and canny. Which explains why the leftist champions of European populism want to disrupt the institutions that ensure freedom and learning.

Just my 2¢.

To that end, I am very, very pleased to see that last poll statistic. That proves what I've suspected for a long time. I'm certainly going to tuck that into my cap for the next time I run up against stubborn lefty "independents" who insist I must love "W" b/c I disagree with them on policy. They'll have to acknowledge that independents don't make up 70% of the country and (begrudgingly) accept the possibility that I'm actually arguing in good faith.

As to the 30% who don't believe in gov't/business collusion, I could almost guarantee majority are on the left--those who believe gov't can do no wrong.

AndrewPrice said...

Jed, Agreed. I think a big segment of the Democratic ranks have gone true populist and are into "destroy the system" mode. The rest of the public has gone this other way where you hear all this anger at the system, but the goal seems to be reform rather than replacement, and even though there's anger, there doesn't seem to be a desire to punish or avenge... just to stop the problem and never let it happen again.

Agreed about Paul. He would say a lot of great things and then would suddenly slip on the tin foil and start wondering off into weirdo land.

I agree too that both parties are at fault for letting Big Business use the government against the rest of us. I think it's a function of them needing money and assistance with legislation, and so they get too close to these lobbyists who come prepared with both. But whatever the cause, it needs to stop. Will it? I doubt it. But it needs to.

AndrewPrice said...

Patti, I'm hopefully, which is rare. I think Ryan and Romney both understand that people need to be weened from government. I think they understand that government needs to be made smaller and less relevant in people's lives to free up the economy, free up people's productive energy, and stop the Democrats from buying votes. We'll see, but I'm hopeful. :)

AndrewPrice said...

T-Rav, I thought they were fascinating. And I agree with you wholeheartedly, waiting to fix these things will lead to very bad solutions being impossible. Unfortunately, both parties are remarkably good at ignoring things they think are just a passing phase. This isn't, but I don't know that Washington understand that yet.

AndrewPrice said...

Stan, Well said! And I agree with you about the Silent Majority. That term has always stuck me as a bit silly since these people are clearly out there, but they aren't organized. Now they are organized, and they are organized as the Tea Party.

I think the Tea Party people have set out to reshape the political world. I think they're done listening to promises and they simply plan to replace everyone who was already in the system step by step. The real question becomes what happens if the system stops them? I can't imagine these people going back to just passively paying their taxes and turning the other cheek.

AndrewPrice said...

Jed, I agree with your second part, but disagree with something you said. I don't think Bigness is a function of capitalism. I don't think that at all. In fact, in a capitalistic world, bigness is the surest sign of near death because the victor will always be the smaller, more agile innovators who can outmaneuver the big players. I see bigness as a sign of government interference. Bigness is the result of monopoly power supported by government regulation.

I do agree entirely though about Obama and Romney. I think the biggest disappointment with Obama was actually that people thought he would change the very corrupt system he inherited, but then he didn't -- he just kept right on doing it and only change the name the corrupt players wrote on their bribe checks. I think that is the reason for OWS and why there's sooo much disappointment with him. He really had a chance to change the world and he blew it.

Joel Farnham said...

Andrew,

This is part of what I was trying to say yesterday. No longer can politicians group people into neat little categories and then promise each the moon or a reasonable facsimile. It just won't work anymore. It is the silent majority, made up of citizens who are willing to work for a better life for their children and are NOT willing to give it up because of some politician's desire for power. Nor can they group them according to race, creed, sexual orientation, and sex to figure out who would or how to appeal to them.

One thing that comes to mind, the Main Stream Media (by the time of the election, probably the last hurrah of it's kind) will call us selfish. So be it. I can live with that.

Individualist said...

Bigness is a factor of two things....

Economies of Scale and Barriers to Entry

Economies of Scale occur when one grows to a size that allows one to take advantage of reduced costs by working in bulk (price discounts, assembly lines, scheduling of work and combining training) Although it is not emphasized in the business classes I have taken I beleive the abiity to meet economies of scale reduce as time progresses. Just in time buying, eCommerce, scype and messaging, work flow programs, internet webinars, advanced computing, all o these things allow one to get the benefit of economy with smaller sales volumes.

Barriers to entry are both natural to an industry and imposed. Government tariffs and regulations increase the cost of product development and production. Government contracts or access to land or resources make things more expensive and limit the nubmer of players. Union contracts also impose barriers that make an industry more monopolistic.

But there are natural barriers to entry. Agriculture requires land. Shipping and Rail require significant capital investmeents. Overtime however my theory is that even these can be reduced by technological progress. Containerized shipping has made it easier for independent truckers for instance. Trucks don't have to be loaded the Tractor can simply hook up to the box.

What ends up driving bigness in industry then might be a result of natural capitalistic forces but overtime those should diminish. where it has not or more monopolization has occured I suspect this is due to government intervention in the industry.

AndrewPrice said...

Indi, I think that as long as people believe that they can improve things by going through the system, they will. I am worried what happens once people think the system is against them and they can't improve things. That is the point where bad things happen. It's hard to predict what, but history says terrorism and civil disobedience come first, followed by open revolt. I think the numbers above, the massive size of the Tea Party movement and the progressive movement, and the continuing outrage at the system suggest that we are getting to that point. So while I don't think we're at that point, I do think Washington better pay attention to the warning sounds.

As for blacks, I've long thought the thing conservatives could to do win over blacks is work to give them economic independence from government. You hear that in all the rap music, that they hate being wards of the state, and yet that is all the Democrats keep offering them -- more government dependence, no dignity. Conservatives need to listen to this message and start working to set blacks free. Locate businesses and schools in black communities, hire them as managers, teach them to reinvest with each other and build their communities. Be unabashed in the message: "I'm a conservative and I'm here to offer you a job, a career, independence and dignity."

AndrewPrice said...

tryanmax, There have been populist precedents in the US as well, but they have a mixed history. The abolitionist movement led to a war, though for a good cause. The suffragette movement led to women voting, a good thing. The prohibitionist movement invented gangs. The populist movement of the late 1880s (in response to a corrupt period that is eerily similar to the present one) led to the birth of big government and progressivism. I think the current movement is rather unique in that it's just trying to push the government back in its place.

On the numbers, I'm actually shocked the numbers aren't higher unless people just assumed that their own guy wasn't corrupt. I honestly can't imagine how you could not see the things the government has done year after year and not answer yes to the last two?

tryanmax said...

OT: I just wandered into the breakroom where The View was on. (Nobody watching, thankfully.) They were discussing this thing where Chinese students are using IV drips while cramming in order to study longer without breaks. The alleged ladies (minus Hasselbeck) seemed to be in awe of the idea, or at least were genuinely ruminating over the positives. But I ask you to transport the same scenario to an American private school and guess how they might react. Yikes!

AndrewPrice said...

Joel, That's a nice thought, but I see no evidence that it's right. Yes, if you look only at the Tea Party, then the things you say are true. But beyond them, I see no evidence that anything has changed yet. Blacks will turn out for Obama because he's black. Evangelicals turned out for Santorum because he wasn't a Mormon, and they will turn out for Romney because he's not a Muslim. Young professional women will vote overwhelmingly for Obama. Young people will vote overwhelmingly for Obama. Old people will vote overwhelmingly for Romney. Jews will vote 60%+ for Obama. Hispanics will vote 60%+ for Obama. Whites males will vote 60%+ for Romney. 40+ states are fixed which way they will vote -- half for Obama, half for Romney. Suburban moms remain a swing vote.

I wish things had changed, but they haven't.

AndrewPrice said...

Indi, That's right. Monopolies exist because of some barrier to entry. And over time, history has shown that barriers to entry are collapsing all over the place and there are no real natural monopolies left. That means while companies may have gotten big because they controlled some key factor, they will be undone by technological changes. And since monopolies rarely innovate, their fate is to collapse as new competitors take their business.

The thing that continues to prop up these monopolies in the modern era is government regulation. In fact, I would argue, this has become the goal of most modern legislation, to protect a contributor company.

AndrewPrice said...

tryanmax, My guess is they would be outraged that these poor kids felt such pressure that they needed do twist their bodies just to keep up.

I wonder if they would have been happy if the Chinese kids were taking steroids?

Tennessee Jed said...

Andrew - I think you may have misunderstood my point about "bigness" most likely because I was not particularly clear in making it. The nature of most businesses, particularly publicly held corporations is to maximize earnings for the stockholders. This is usually accomplished through growth, either organic growth or merger/acquisition. We have had different periods in our economic history. There was a time when IBM was a blue chip stock. Right now, we are in a period of rapid technological change.

My notion is that size is a natural part of the business cycle, not the be all and end all. The era of IBM and corporate behemoths lead to the same problems that bedeviled big government {layers of bureaucracy, lack of speed and agility, group think, turf protection, inefficiency.) Fortunately, in an era of rapid technological innovation, we are seeing that as a prescription for extinction. But businesses will try and create sustainable competitive advantage and dominate a market in ways that will make entry by competitors more difficult. Perhaps, a better way of saying it is business does love to increase market share, all other things being equal.

DUQ said...

These numbers do my heart good and they tell me that the Tea Party has a lot of potential friends and allies out there!

LawHawkRFD said...

Americans like bottom-up government and businesses where they can get close to the "top guy." Big government and big business don't bother them much unless they see complicity between the two which harms the average American. The perfect model for big oppressive government working hand-in-hand with rigid big business was Nazi Germany (I.G. Farben, Agfa, Krupp, etc.).

AndrewPrice said...

Jed, I agree with you. And you are right that becoming big and grabbing market share is the goal of business. My point was that while such growth may be possible and may be part of the business cycle, permanent bigness isn't something you will find in a capitalist system. And the reason we are seeing it now is only because Big Business has learned that they can insulate themselves by using the government as a sword against their competitors and a shield against the forces that would normally be their undoing. To me, that's where the problem lies -- these guys aren't capitalists, they use the government as a tool to enrich themselves.

AndrewPrice said...

DUQ, That's an interesting way to look at this. In effect, this tells us that the Tea Party is a massive majority party in America... if they can convince the people who believe as they do to join them!

AndrewPrice said...

Lawhawk, I think that's right, I think it's the complicity which bothers people. It's the idea that the government is using the force of law to help these economic titans control their markets and pillage the rest of us.

Big Business said...

Government save me.......

AndrewPrice said...

Dear Big Business, Your government can't save you forever!

Big Government said...

Leave Big Business alone!!

Leave Britney alone too.

tryanmax said...

Andrew, agreed, American populism is a mixed bag, but that still puts it leagues ahead of European populism. Besides, I'm just throwing language around. Either way, the history books will put the Tea Party in with the other major populist movements, but I think in a strictly American context, it isn't a besmirching descriptor.

AndrewPrice said...

Dear Big Government, you might want to listen to people. They aren't happy with you.

AndrewPrice said...

tryanmax, I agree. I think the Tea Party is a truly American invention with a distinctly American philosophy.

Ed said...

Excellent article! I concur whole-heartedly.

As DUQ said, I think these numbers tell us that there is a vast pool of Americans out there who could be won over and if that happens, the system will change. It's inevitable.

AndrewPrice said...

Thanks Ed. I think this is a huge issue and I think Washington doesn't see it. I think Washington is blind to this because they are stuck in the mindset of conservatives love business (read: big business) and liberals hate Republican business but love other big businesses. So neither one seems to get that it's the incestuous nature of the relationship that has upset so many people.

Ed said...

Andrew, I agree. I think it's interesting that liberals talk about how much they hate "business" but then they really only aim their hate at a handful of big businesses and they crawl into bed with the rest.

T-Rav said...

Andrew, as a small point of order, I don't know if the abolitionist movement can properly be described as "populist." Some segments of the Northern population supported it, including recent German immigrants and evangelicals, but it tended to be something that only the intellectual elite (the same elite involved in the temperance movement, the suffrage movement, etc.) was really committed to full-time. Even in New England, on the eve of the Civil War, at least a plurality of the population was indifferent if not hostile to the movement, and the announcement of the Emancipation Proclamation caused massive desertions in some Union regiments. So it wasn't really a movement with broad-based, common-man support.

The late 19th century version, though--yeah, that was pretty popular, and yeah, it did endorse things like a progressive income tax and other features of Big Government (plus some even more radical things, like government ownership of transportation and communication, which thankfully never saw the light of day).

T-Rav said...

Dear Big Business and Big Government, go take a long walk off a short pier. Kthxbai.

Tennessee Jed said...

Andrew - I agree with you what we have today is crony capitalism via industry lobbyists, PAC's etc. And because of your statement that bigness is not a "permanent" part of a capitalist system, I can agree with that statement as well. But bigness can and does play a significant part in a capitalist system relatively devoid of government interference. Prior to 1913, the age of the robber barons was one of the longest and most stable business environments in history. This was the age of industrialization. Cars replaced horse and buggies and guys like Henry Ford became huge because he learned to mass produce. Right now, we are in a lean and mean technology oriented economy where small and innovative wins. It hasn't always been that way, but it doesn't mean we won't go through a similar environment again. I do believe in some of the anti-trust functions of government

AndrewPrice said...

Ed, Frankly, that's made people even more cynical. Basically, we have a right-wing party which is openly beholden to big business and a left-wing party which is sneaky about being beholden to big business. That's the sort of thing which leaves the public with nowhere to turn.

AndrewPrice said...

T-Rav, That's true, but they still ended up being "popular" movement, i.e. from the outside (public) in (into the system) rather than being things generated within the government and pushed onto the public. And certainly none of them ever had majority support, they just enough to force their will upon the system.

That's what makes me think the system is underestimating the Tea Party. They think the Tea Party only has 33% support and thus isn't dangerous, but that's more support than most of these movements had.

AndrewPrice said...

T-Rav, "Kthxbai" indeed! ;)

AndrewPrice said...

Jed, That's true, but don't underestimate the power of government in helping those robber barons. Many got rich exploiting government contracts. Most used government regulation to keep out competitors and smother consumers. A whole host of them got rich because of land grants from Uncle Sam followed by insider information about where the government would next build a railroad or whatnot. In fact, many of the Fortune 500 can trace their roots to land grants given during that era.

The robber baron age fit hand in glove with the Gilded Age, which was the most corrupt period in our history and few of them succeeded without using the government extensively. And that is what spawned the progressives (trust busters) who wanted to break the power these companies had seized and were maintaining through the government.

AndrewPrice said...

Folks, I'll be back soon. Please keep commenting, I'll respond when I get back.


... talk amongst yourselves. ;)

T-Rav said...

What most liberals refuse to acknowledge is that the first extensive regulations of business, beginning shortly before World War I, were instigated and even written by the leaders of big businesses--the Rockefellers, the Morgans, the Carnegies--who wanted to crush their smaller competitors. The reasoning was simple: They could afford things like health inspections and penalties, the up-and-comers couldn't. The same thing happened during FDR's New Deal with the NRA (not that NRA).

T-Rav said...

Hmmm...maybe the youth vote's not as locked up as you think, Andrew. According to Zogby, Obama's lead among 18-to-29 year olds is down to eight points (!) 49 percent, versus 41 percent for Romney. The GOP doesn't need to win the category; if they can just keep the margin within single digits, Obama's officially in a corner.

tryanmax said...

The comments have really got my brain turning. Here are just a few things that crossed my mind:
_____

Andrew said, "...a function of them needing money and assistance with legislation..."
Is there a way to compel lawmakers to actually write their own legislation? As T-Rav points out, a huge part of the problem is corporate-written bills that never get scrutinized by Congress before passage. I realize what it is I'm asking for, but is there any way to stop or at least limit that practice? (Besides voter diligence, which is the ideal, of course.)
_____

RE: Bigness -- I learned recently that the very first corporations in Europe were established to achieve a specific goal and were given a set expiration date. I don't know enough about the history of corporations to know when or why that changed, but it doesn't strike me as an inherently bad idea. Thoughts? Explanation?
_____

Indie, I'm surprised you had to come to that on your own. It was right in the textbook I studied from that technology reduces entry barriers. If you want to talk about imposed barriers, check this out.
_____

Andrew, your point about winning over blacks to conservatism ties in with a thought that occurred to me the other day. Gov't meddling in education has led to a state where businesses are unwilling to train. I'm not saying a person shouldn't have to make themselves marketable by attaining some general/basic job skills on their own. But it has gotten to the point where those hiring seek out-of-the-box specialists. When they can't find exactly what they're looking for, they press for a gov't incentive/program to train people to their niche needs. And what do you suppose happens when those freshly minted specialists outlive the niche? They are downsized and sent back to the gov't training program.

Individualist said...

Tyranmax

Your link is exactly how it works.....

Regarding the redcution in barriers to entry. We were told how in the past technology had eliminated some barriers but there was never any attempt to track it.

I am assuming that going into the future the natural barriers will be slowly whittled away. There are natural barriers by the way.

The Railroads will probably always be four regional based competitors in the US and it is doubtful anyone will ever start a new railroad.

What may happen is hover technology will eliminate the need for railroads some time in the distance future but until then a natural oligopoly will exist.

However much of the consolidating of railroads in the 20th cetury was due to government regulation so... there you go

tryanmax said...

Indie, I totally recognize the reality of natural barriers. But it is technology that overcomes them. Look at the printing industry. Formerly, if you wanted to make the jump from copy-shop to full-scale printer, you had to make the leap and by a multi-thousand dollar offset press. The advance in digital printing technology not only brings high quality reproduction down on a more affordable scale, but also provides several stepping stones across the old chasm.

AndrewPrice said...

T-Rav, That's true about Big Business and the first extensive regulation of business. A lot of it, I don't mind. I think a lot of it was needed to stabilize society and prevent us from becoming something like Brazil where you have a really rich class and then a really poor class and little in between.

The problem is when those regulations go beyond making the system better and cross over into rigging the game for a small group of players. That's what's going on today wholesale and it needs to stop.

AndrewPrice said...

T-Rav, I think I mentioned that yesterday about the youth vote, though I'm too lazy to check. :)

I think Obama will win the youth vote ultimately, but not nearly by as much as he did in 2008. It's not that they're changing, it's that they aren't excited and so turnout will be skewed.

AndrewPrice said...

tryanmax,

On making them draft their own legislation, the short answer is no. Legislators aren't smart enough to write their own and also aren't expert in the things they legislate. So what they do is they turn to their favorite lobbyists (industry or public interest groups) and ask them to give them completed legislation. Then they hand it to their staffers who work it into its final form. Asking legislators to do this themselves would result in intensely incompetent legislation. Plus, I'm not sure how you would enforce it?

---

The history of corporations is rather lengthy and they have been meant for different purposes. Having them expire really serves no purpose. And any purpose it does serve would be gotten around easily... form over substance.

---

That's true. But unlike Europe, one thing Americans are very good at is reinventing themselves. When a job goes away here, people move on and find something else, they don't wait for the job to come back -- unless they're union.

AndrewPrice said...

Indi, Also the biggest competitor for railroads is trucks. That's why they've fought hard against letting truckers drive 2-3 trailers simultaneously.

Railroads, by the way, are intensely regulated. Everything about them is determined by the government.

AndrewPrice said...

tryanmax, I think there are almost no natural barriers left at this point. There is almost nothing that can't be done somewhere else or in some other way which competes.

Koshcat said...

I guess I am just not as optimistic as the rest of you. People have complained and continue to complain about this and other practices by the government. But, when it comes to effecting them personally, they balk. Just watch what happens if someone suggest closing a military base or eliminate farm subsides. One could try to phase these out but as soon as someone else gets elected they are jacked right back up. The government will stop this as soon as we make it clear we want it to stop.

Tennessee Jed said...

Andrew - l.o.l., you are starting to sound like Obama. "don't underestimate the power of the government in helping those robber barons" ;) "Henry Ford, you din't build dat . . . somewhere you had a friendly land grant or teacher that helped you out!" I don't underestimate the corruption or sweetheart deals, but I would think that was dwarfed by the basic success of those companies. Unhindered, capitalism creates wealth unequaled by any economic system ever devised. But, it does absolutely runs in cycles, and it definitely tends to concentrate wealth into the hands of the winners (including their investors.)

If a company can produce a return on equity that surpasses everybody else, it will grow. That's capitalism. And, as you rightly point out, usually lose it's soul and mojo by doing so. But, that was never really my intent . . . e.g. to get into a long discussion of what is actually a minor point to the larger discussion. :)

Individualist said...

Andrew

You are right they are regulated andf that regulation is probably what allowed the big four to take over.

however I beleive in the railroad industry the oligopolization of the railroads would have continued anyways without the government. The difference I think would be that there might be 20 separate railroads in the largest class and that most of these would be regional to one or two of six regions of the country.

As it is the Railroads have a company they have set up called Rail something or other - I forget. This company provides several services but the main one is to aknowledge when each railroads equipment crosses the others tracks and records the charge back and forth to settle the amounts owed to and from.

Railroads are the one industry that I think creeate naturals oligopolization with the exception of maybe utilities but even they are going away. Shipping comes a close second but I beleive shipping is in the state it is in due to the competing tariff regulation of major countries and cabotage law.

tryanmax said...

RE: legislation, I was afraid of that.

RE: job training, again, I'm not saying people don't have a responsibility to endow themselves with skills to make themselves employable and to adapt those skills to changing markets. I'm only pointing out that gov't has done a lot to distort the education/training aspect of that, in many cases at the urging of big companies.

Certainly, a discussion could be had over who bears responsibility for the cost of job training. I contend that, on certain occasions, the cost of labor includes the cost of training, such as particular scarcity. I base this on the principle that, if you cannot acquire it, you then must create it. But in no situation do I see that responsibility falling to the government.

AndrewPrice said...

Koshcat, Sadly, I'm not ultra-optimistic on this either. I think the evidence is in place for some massive change on the horizon, but I don't know if the system will be smart enough to see it and provide a good change or if things will get ugly first, or if this will all just peter out. I just don't know. We're standing at a crossroads.

AndrewPrice said...

Jed, That may sounds like Obama, but I meant it in a bad way -- he means it in a good way. It would have been interesting to see how our nation would have grown without this corruption, but that's purely academic as it didn't happen. Our history is what it is.

And I certainly don't think that big is impossible -- look at Microsoft as an example. But permanently big requires more than capitalism, and that's my point. There's nothing wrong with companies striving to become big and to earn market share. It's when they start cutting deals with the government to keep that market share that problems arise.

AndrewPrice said...

Indi, I think you're right that rails would have consolidated with or without the government because it doesn't make a lot of sense to have a bunch of different companies in that kind of market.

But don't forget, which railroads may themselves be oligopolies, they lack market power because of competition from other sources -- trucks, contain shipping, cars, air freight.

AndrewPrice said...

tryanmax,

I agree that the government has distorted job training. And now the traditional colleges (not-for-profit education) are trying to use the government to distort it again by making for-profit college persona-non-grata in the education world... because they've been too successful at stealing students.

On the cost of labor, I think the reason is that because firing people creates other burdens on society, employers are required to contribute into unemployment. Unemployment then uses those funds to support people who lose their jobs and to offer training to get people back to work quicker. I'm not bothered by the system except that 99 weeks is too much and the whole training system is poorly managed.

tryanmax said...

Andrew, and that leads into a whole other discussion about how the unemployment system can be optimized and, once optimized, does it provide sufficient benefit in that state? For my part, I got nuthin'

BevfromNYC said...

Is anyone aware that Obama has 22 days to drop Biden from the ticket? And if he does and choosed Clinton, we're screwed? Biden is gaffing all over the place probably to set up the change. He has bee fairly quiet all summer until this week when he's been blundering every other sentence. And WTF is Palin shooting her mouth off about how they should replace him with Hillary Clinton???

Sorry, I just had a panic attack...

StanH said...

“…what happens if the system stops them?” I don’t think it will. The ballot box will still work, the trick is staying focused for a decade of elections, not just 2010,12. If not, it could get very dangerous for a while.

AndrewPrice said...

Bev, I'm writing about that right now for tomorrow actually. :)

AndrewPrice said...

tryanmax, Yeah, that's a whole different discussion... which we should pass on today.

AndrewPrice said...

Stan, Hopefully. But the deck is stacked against them.

Tennessee Jed said...

I just don't see Hillary taking it, to be honest. Too risky this year. Are there that many Hillary lovers who weren't going to vote for Obama who will get energized? I could see Billary laying in the weeds for four years. I don't see any rising young Democrat stars. Better for her to hope Romney doesn't hit a home run in his first term and be "drafted" to take him down.

T-Rav said...

In more poll news, here's this swing-state survey that came out today. I'm linking it from HotAir, because the breakdown is interesting: LINK

Long story short, we may be seeing the first signs of an upward spike for Romney/Ryan.

EricP said...

Agreed about the Hillary suggestion panic, Bev, at least initially, but when's the last time the left did anything but scoff at Palin? Seems like she ultimately gave no credence to their doing what they likely should with Biden's gaffe-o-meter off the charts this week. "Put Hillary on the VP ticket? But Palin said it's a good idea and we all know how stupid she is." Crazy enough it just might work.

AndrewPrice said...

T-Rav, That's good news indeed and I think it's coming. In an odd sort of way, Ryan seems to have added a seal of approval to the ticket. I'm not quite sure why that is, maybe because Romney's first big decision was such a home run, but whatever the reason, it's working.

I also saw Ryan referred to as our First Generation X VP today, which I think may excite younger people a good deal.

AndrewPrice said...

Eric, Jed and Bev, I can't see Hillary taking the job because she gains nothing from it except four more years of abuse. Better to let Obama fail and then swoop in in 2016.

BevfromNYC said...

Andrew - What about Bill Clinton?

AndrewPrice said...

Huh? Arg. Don't say that. He's desperate enough for attention that he might do it!

Joel Farnham said...

Here's a thought, we are lucky Obama picked industries for his crony capitalism that aren't successful, and the one he did pick that could be successful he forced on them a vehicle that no one wanted.

On picking Hillary, he could do it, except I still think he remembers Vince Foster. A suicide that never was investigated properly.

AndrewPrice said...

Now now Joel, you know Vince Foster shot himself and as a last dying gasp transported himself to the park. ;)

I think Obama wouldn't pick Hillary because he's sexist, because he would be afraid she would be more popular than he is, and because he just doesn't like her.

Good point about his cronyism. He really made bad choices which make him look bad all around.

T-Rav said...

"Now now Joel, you know Vince Foster shot himself and as a last dying gasp transported himself to the park."

Much like those political enemies of Rahm Emanuel's and the rest of the Chicago political machine who wound up committing suicide by shooting themselves in the back of the head.

As far as a change in VP, I suppose an alternate theory is that Hillary might accept a request to replace Biden for the same reason Andrew Cuomo would--in case of a second Obama term, each would want to edge out the other as de facto successor come 2016. But I guess it depends on how likely either thinks that scenario is.

AndrewPrice said...

T-Rav, I'm sure most people really prefer to shoot themselves in the back of the head when they commit suicide. ;)

Hold on, someone from Chicago just brought a pizza to my door... funny, I don't recall ordering a pi--

AndrewPrice said...

P.S. I'm not changing my Thursday article just because you people are talking about it now. You'll all just have to repeat you comments! :p

DUQ said...

We'll repeat our comments only we invert them all! :)

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