The new Republican mantra

by Pete Talbot

I shrugged it off the first few times I heard it or saw it in print, “government picking winners and losers.”

Now it’s everywhere: Republican debates, news stories, op-ed columns and even comments here at 4&20.

It’s directed at Democrats, for the most part, from President Obama (health care, Solyndra) to Missoula’s City Council (Play Ball Missoula).

The irony is that all parties, in all areas of government, from city councils to state legislatures to Congress and the President, have picked winners and losers.

They’ve subsidized railroads and airlines, oil and coal, highways and electrical distribution systems, NASA, mining and agriculture, baseball, basketball and football teams … it’s a long list.

Winners and losers are chosen by the powers that be all the time. There are no-bid defense department contracts for Halliburton, Raytheon and Blackwater. There are tax code revisions that pick winners and losers. There are decisions on food stamps, Social Security and Medicaid that have winners and losers.

It’s a cool sounding mantra, this “government picking winners and losers,” no doubt generated at some Karl Rove or libertarian think tank using focus groups and polling, and distributed to key leaders in right-wing politics, whence it trickles down.

There are no doubt abuses in this system. But the idea that every aspect of American life should be subject to the invisible hand of the free market is unrealistic and anachronistic. And the Republican cry of “crony capitalism” is about as hypocritical as it gets. The art of crony capitalism has been a mainstay of the Republican Party.

It’s dishonest to call all government spending “socialist” and lay the blame at the feet of Democrats. Picking winners and losers has been going on since the founding fathers and is as American as apple pie.

It just depends on who’s doing the giving and getting the rewards that gets the teeth gnashing and pundits whining.

  1. Don’t forget the auto bailout Pete – thanks to The Great Leader we (you & I) still own 26% of GM, and if we sold ‘our’ stock today we would lose billions.

    Meanwhile, FOMOCO, who wasn’t bailed out, and ran by a Czar, is profitable.

    How do you defend the regime on that part of picking winners and losers ?

    • Have you thought about adult education?

      If you could write more coherent sentences and had better grammar and composition, your rants might be somewhat more persuasive.

      • It’s about substance anonymous ‘Pancho’ – not about how wonderfully PC you can write.

        FYI – I just did the math, and if the US Govt sold off our GM stock today we would lose $28.5 billion dollars. To break even ‘we’ would have to get $53.00 per share, not the $22 it’s at now.

        And if GM took all the cash they have on hand, plus all their profits for the next year, it would almost pay off the shortfall in their pension and health plans.

        Not too good for a company who had their debts erased, got away with paying their bondholders .20 cents on the dollar, and had all government impedments erased, is it?

    • petetalbot

      I have mixed feelings on the auto bailout, Eric.

      It should be noted that Ford didn’t ask for a bailout. I appluad its profitability. It’s the most innovative of the big three and that’s paid off for them.

      And GM and Chrysler (Fiat) have reported profits in the past few quarters. Maybe that GM stock will rise in value.

      I guess we could be paying extended unemployment benefits to autoworkers instead of bailing the industry out.

      Again, winners and losers are in the eye of the beholder.

  2. Timely article. I was trying to find the time to write something about “When Do Gooders Do Bad” in conjunction with this story about GMOs.

    A request from the U.S. embassy in Ecuador for $22,900 to fly five Ecuadorian journalists to the United States “to participate in a one-week biotech tour” to influence public opinion of biotechnology.
    A request from the U.S. embassies in Brazil and Mozambique for $64,590 to hold a trilateral three-day seminar on biotechnology in Maputo, Mozambique.
    A request from the U.S. embassy in Ethiopia for $5,500 to bring biotechnology experts from South Africa, Egypt, Kenya, and possibly the U.S. to a workshop on biotechnology held by the Ethiopian government.

    We have a screwed up crony system whether your friends are on the left or right.

  3. Craig Moore

    Pete, corruption should not be as American as apple pie. Picking winners and losers is not so much as about the pluses and minuses of competing approaches as it is about connections. See the NYT:

    The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google…

  4. Steve W

    GM is profitable, Eric.

    if we sold GM today we wouldn’t lose anywhere near what it cost us to invade and occupy Iraq for 8+ years.

    So i would have to say that you sound penny wise and pound foolish to me, Eric.

  5. ladybug

    Ford may get relatively less government help than GM, but gets plenty. Consider the tax code exemptions for 3/4-ton vehicle purchases, which distorts demand for trucks, SUVs and gasoline. Unlimited expensing of advertising is another break scaled for multi-nationals. Many of these giant gems inhabit the zero-income-tax (or refund) category. Accelerated depreciation, labor/payroll exemptions, etc. all favor the bigs over the vast majority of main street businesses — which in aggregate creates jobs at much higher rates.

  6. I remember a long time ago a professor in a government class offering up that “politics is the process of deciding who gets what.” If a road gets built one place or another, land values are affected. If a fire house gets built in one neighborhood and not another, there are winners and losers. If Montana gets hundreds of ICBM’s, there are winners and losers. And so it goes. I think Pete has it about right.

    Where the wheels come off is when deals are unduly influenced by big money, decisions are made in secret, and, of course, when the inevitable unintended consequences arise. The only countervailing force to that is an active, informed electorate–something whose existence I question every day.

  7. d.g.

    Quote from Pete: ” But the idea that every aspect of American life should be subject to the invisible hand of the free market is unrealistic and anachronistic.” (With endorsement from Geoff). This is the sort of B.S. that has put America where it is: two white “have’s” telling have-not’s to grow up and accept the system as it is. Idealism may be anachronistic to those for whom the alternative is functioning just fine. This allows Missoula the luxurious reputation as a “progressive” “liberal” city when, in fact, we are largely populated by armchair activists and public radio progressives who believe that a): blogging b): writing a check to good causes and c): voting defines a contributing citizen. Didn’t see either of these rational and rationalizing men on Higgins Bridge the night Bush and Cheney bombed Iraq. Didn’t see either marching with Occupy from the Geoffrey Funk fish sculptures to the Missoula Courthouse lawn. Didn’t see either at the debate over the baseball bailout (of course Geoff was compromised by his position on the MFCU Board of Directors,.) Hey, status quo duo: Looking for $600.00 to sponsor a year of recycling at a local gradeschool; pony up???

    • petetalbot

      As usual, d.g., your reading comprehension skills need some honing. No where did I tell the readers “to grow up and accept the system as it is.” I was pointing out the hypocrisy of the right blaming the left for “picking winners and losers.”

      And you’re right, I haven’t made every protest and march held in Missoula. Been to plenty, though; didn’t know you were keeping score.

      As for your sponsor request for recycling money — if it were anyone else asking, I’d be inclined to help them out.

  8. Ingemar Johansson

    Looks like Nancy picked a winner.

    “In early 2008, Nancy Pelosi and her real estate developer husband, Paul, were given an opportunity to buy into a Visa IPO. It was a nearly impossible feat–one that average citizens almost certainly could never achieve. The vast majority of purchase opportunities went to institutional investors, large mutual funds, or pension funds.
    Despite Pelosi’s consistent railing against credit card companies, on March 18, 2008, the Pelosis bought between $1 million and $5 million (politicians do not have to report the exact amounts, only ranges) worth of Visa stock at the IPO price of $44 per share. Two days later, the stock price rocketed to $65 per share, yielding a 50% profit. The Pelosis then bought Visa twice more. By their third purchase on June 4, 2008, Visa was worth $85 per share.”

  9. Pete, I guess I would have more sympathy if just once in a while you’d call out politicians on your side for their equally dishonest horseshit. The president is now setting the meme of “the do-nothing Republican Congress” from which his programs, if he’s not paying attention, aren’t getting a hearing from the Dem Senate. I guess that to be upset with one party’s nonsense and not a general lack of credibility of the political class writ large you might be only listening with one ear.

    Now, my contempt for politicians of all stripes aside, the problem with picking winners and losers – whether intentionally or as an unintended consequence – is a fundamental question of fairness. Let’s look at the auto bailout as an example. In order to get the secured creditors to subordinate their interest to the unions and the government 60% of the bondholders had to agree to be subordinated. The combination of the country’s four largest banks, all recipients of TARP money, were enough to affect that subordination agreement. But there were a few thousand of individuals who had those bonds as their nest eggs. These were little investors and, at the time, a rather large number of them were retired GM workers who had saved well and had faith in their previous employer. We’ll, they got 20 cents on the dollar.

    The federal government could have, but didn’t because of power politics, made an offer from the Treasury to guarantee debtor-in-possession financing for a normal Ch. 11 bankruptcy filing. That would have resulted in the secured creditors getting about 40% return on their bonds and shares of New GM stock. The winners here were the Unions and the Banksters (via TARP and other seemingly associated government largess.) The losers were little guys that did everything right and expected (or at least had the right to expect) that the established legal system would be there to protect their interests. But, no, they got royally screwed. And, let me include Ford as a loser. They have to pay off debt and have a materially poorer capital structure that makes it harder for them to compete because they did the right thing? I would call that fundamentally unfair.

    There will always be those that benefit from government largess and those that are harmed by it. It’s a trade-off. But the history of U.S. industrial policy shows decades of much more failure than success. The government, whether well intentioned or otherwise, isn’t good at forecasting success.

    So, while I agree with you that Republicans need to be reminded of their crony-capitalist history, two wrongs don’t make a right. And I’m sure it’s grating to listen to the disingenuous hyperbole. But it’s also valuable to consider what the implications of the sentiment are. In other words, just because the talking point comes from naifs and scoundrels doesn’t make it incorrect.

  10. petetalbot

    I agree, sort of, Dave that, “the history of U.S. industrial policy shows decades of much more failure than success.” But we probably interpret this differently. The past decades have focused on free trade, which has eroded our manufacturing base and allowed other nations (devoid of labor and environmental laws) to sell us cheap goods. I should also add that many of these countries — China is a good example — have heavily subsidized these start-up manufacturing companies.

    I will definitely agree with you that members of both parties are responsible for this policy.

    I also agree that the small bondholders got screwed in the auto bailout (reminds me a bit of the ‘widows and orphans’ who got screwed in the Montana Power fiasco) but I don’t believe the unions, at least the rank-and-file, prospered under this agreement.

    But ” … the government, whether well intentioned or otherwise, isn’t good at forecasting success … ” doesn’t completely resonate with me. Where it has subsidized programs and industry, it’s a mixed bag. Hell, we wouldn’t have microwaves if it weren’t for our investment in NASA. For every failure, there’s a success story. It could be just random luck but there have been some great things launched by government investment: computers and the Internet, the human genome project, communications and electrification, aviation, nuclear power (perhaps a mixed blessing), pharmaceuticals …

    If I could divine the winners and losers, I’d be sipping margaritas in Mexico instead of shoveling snow in Missoula.

  11. Pete, there’s a big difference between robust funding of basic research and subsidizing what some think is the future. For example, even though TCP/IP was developed by DARPA do you think it at all plausible that the government could have brought the internet to the state it is today. Think of the strides in file compression for streaming video or the robust growth in internet applications. So, I’ll concede a certain role for government that compliments private markets. But it is markets that propel innovation (as opposed to simply invention.)

    Now, as far as trade shipping jobs overseas I have a couple of points that I have to make: First, developing country exports have brought 100’s of million of people in developing economies out of abject poverty. The implication is that if we protect our jobs we do so at their disadvantage. Do they not, too, deserve a higher standard of living afforded them by selling us things that we want. Secondly, the jobs we’ve lost to developing economies pales in comparison to the jobs we’ve lost due to technological innovation. Think about how a single tractor displaced 20 farm workers or the number of retail clerks that are now being displaced by automated internet sales. The U.S., in 2010, manufactured and exported more goods than any time in history. The advent of manufacturing robotics has displaced many times more workers than all of the competing countries combined. For the last 40 years the U.S. has produced roughly 25% of global manufacturing output. But we’ve done it with a reduction in work force of nearly 75% over that same period.

    I don’t want to leave the opinion that I think all of the mis-aptly named “free-trade” agreements are good. To be sure there is as much rent-seeking and crony-capitalism in those treaties as there is in domestic U.S. industrial policy. But that is a problem with trade, it’s a problem with the trade agreements. The entire structure is writing to the benefit of large companies and barriers to small business are large enough that, at the margin, there is no level playing field for small manufacturers.

    So I stand by my instinct that U.S. industrial policy (as separate for funding basic research) is mostly a failure, What I would give full throated support for would be increased spending on basic research as well as tearing down the institutional barriers to small firms entry into the market. But I don’t see how giving tax breaks to the wealthy to buy Chevy Volts (remember the tax break is progressive and favors high income earners), subsidizing corn ethanol, placing tariffs on imported sugar, giving Solyndra enough money to build a palace instead of bare bones factory, and investing in Synfuels (Carter admin) do anything to help workers and improve the lot of Americans.

    And since you included corporate tax breaks as a form of “picking winners and losers” I vote we end that first. And we need to hold the GOP contenders feet to the fire since they’re the ones now popularizing the idea.

  12. petetalbot

    I didn’t realize you had such affection for second and third world workers but you bring up a good point, do you sacrifice a Western standard of living so you can raise people out of poverty in the rest of the world? I’m not opposed to competition from other nations, if it’s a level playing field, but I don’t believe it is. Makes me think of Conrad Burns and the Marianas Islands and the working conditions there.

    I mean, how low can we go? I understand that labor is getting too expensive in China and India now so it’s off to Cambodia and Bangladesh for cheaper, more compliant workers. It just seems like such an unsustainable system. Will jobs finally come back to the U.S. when workers will accept $1/hr. and work 60 hours a week in squalid, unsafe conditions?

    I also find it ironic that dissenters in these new economic powers are pointing to large accumulations of wealth in the hands of a few — nothing new there.

    You’re right that technology has changed workers’ demographics. This has been going on since the Industrial Revolution. You can’t blame technological advancement for our current nine percent unemployment rate, though. It was brought about by a bursting housing bubble that dealt Americans an average 25 percent loss to their net worth – lose that kind of money and you aren’t going to be spending as much on goods and services – continuing the downward spiral.

    The right keeps pointing to the Solyndra debacle as the reason government shouldn’t be subsidizing business. It seems like a lot of venture capitalists and investment firms have taken hits during the past downturns: the dotcom and housing busts, for example. So I’ve got to wonder if the track record of government investment in various industries is any worse than that of private market investments. I’m having a tough time finding any data on this for the U.S. but research on the Japanese government’s heavy subsidization of its industry shows success, although in the long run, it may not have done any better at picking winners and losers than any other government or private investment firm.

    Life’s a crapshoot, I guess. Fortunately, I have my money at Bear Stearns.

  13. Pete, just a couple more points and I’ll stop with the market oriented ideological water torture.

    First, those that know me know that I have much more concern for the truly poor in the world than I do the poor in the U.S. That may sound callous but, from the viewpoint of an alien landing on earth, the problems with U.S. poverty are nearly inconsequential when compared to the problems of the 2 billion people who live on $2/day. Of course I was accused of arguing for slavery by those who couch there opinion of me as a “conservative” (including Jay Stevens) when I wrote this. Nothing could be further from the truth. It also seems that few of my debating partners on the left give me credit when I argue that opening up the U.S. economy to immigrants whose biggest desire is to lift themselves up from abject poverty is based on the absolute moral imerative that they deserve every chance to improve themselves as do Americans.

    I think that, in the modern zeitgeist, there seems to a be a great confusion about the limits of wealth. The CPAP recently had a map that equated the ownership of land to the wealth concentration in this country. But that is a false comparison. Land is fixed and no new land can be created . But wealth isn’t fixed at all. Wealth can be created and destroyed by the efficient use of waste of resources. By your own example, wealth was destroyed by the improper build-up of residential real estate. It was a huge mis-allocations of both capital and labor. That’s what bubbles produce. But (as I pointed out elsewhere) think about the wealth of the average American between 1900 and today. In 1900 the richest didn’t have penicillin, refrigerators, automobiles, telephones and the vast majority of “middle class” Americans at the time didn’t have central heating or indoor plumbing. So it causes the question; the the magnificent wealth of the west reduce the wealth of the third world in terms of standards of living? The data argues quite the contrary. Over the last century more people have been brought out of poverty than the entire world population in 1700. Wealth is not a zero sum game. That’s not to say that at some point if won’t (google Vilfredo Pareto) but I think we’re a long way from it (google Julian Simon.)

    This leads me to your thought of having to sacrifice our western standard of living to help the third world. That seems to me to be a false choice. First, the wealth created in the third world is dependent on their ability to sell more developed countries (what economist call) they’re “consumer surplus.” In order for that to happen there must needs to be “domestic deficit” in some goods or services of the buying economy. Hence, a reduction in western standard of living will retard the wealth creation of developing economies. I know it’s a tired cliche’ but, a rising tide lifts all boats. We support them by improving our own living standard.

    I know this often gets confused under the banner of “economic justice.” And although I think that wealth disparity in the U.S. is a problem (although not as much as problem as it’s portrayed by egalitarians) it’s much different As unfair as wealth disparity is it appears to be a cost of general societal wealth improvement. Few think that the wealth accumulated by Steve Jobs accrued at the expense of others well-being. It accrued because he added value to peoples’ lives. But there is a case for those who have accumulated wealth from enterprises that add nothing (such as traders of naked credit default swaps and those who use government protection exclude competitors) don’t deserve it. I think the question always has to be “did what they earn come from creating value?” The problem is, as always, who is the just arbiter of the deserving or non-deserving?

    I know that the watching the manufacturing sector chase low cost labor appears unsustainable. But I think that’s wrong. By your own example China and India are successful in the rise of wages are they not? And eventually the same rise will be seen Cambodia and Bangladesh (that is, given their own choice.) At that point maybe we’ll see sub-Saharan Africa begin to develop. And maybe at some point it stops with the ultimate Pareto equilibrium. But I doubt it will for a long time. All the while we will create more wealth using fewer resources per dollar of increase (back to Julian Simon which shows my belief that Malthus was wrong. I admit the bias)

    Well, I’m even starting to boor myself but let me say just one thing about venture capital vs industrial policy. It doesn’t make any difference if VC has a better or worse track record than the government (but I’d bet you $1,000 bucks right here that private VC does better) because those investors are making bets with private money which costs taxpayers nothing (at least in theory.) But all of us were forced to invest in Solyndra. So we all have a reason to be unhappy. No one asked us if we wanted to invest. And, as importantly, no one asked our grand kids if they wanted to do so since they’re the ones who ultimately will have to pay off the money borrowed for the investment.

    • Ryan Emmett Morton

      OK, I counted to 20 and would like to hear more before I pass judgment. (That’s about as generous as I get in debate – so don’t expect too much.)

      If venture capital has a better track record than government policies, why don’t more people invest there? And why aren’t they leaving Treasury bonds en masse?

      (Solyndra: Really? Argument by small example in a sea of options? I’d at least have chosen USPS or Amtrak or something that the government actually “runs.” We give money for independent businesses for various policy goals all the time – Halliburton and such.)

      And why did the Asian Tigers (Taiwan, S. Korea, Singapore, and Hong Kong – did I get those right?) who actively used government policy and money to push ahead gained so much wealth in so little time? In S. Korea, the government chose (in a much more literal sense of the word) mobile phones and shipbuilding – and they chose who got to do it. They even created communities for the sole purpose of production… sounds communist when i say it like that. Anyhoo…

      I guess I have trouble believing unfettered capitalism even works let alone is the best way to ensure economic growth and stability – assuming those are worthy goals. Can you give examples of when “the market” really did it better? I like your idea of Apple adding value rather than taking value – though I’m not sure it really went down like that.

  14. Ryan, venture capital is alive and well albeit a smaller community that it once was. The reasons that more people don’t invest in venture are multiple. First, most VC funds are not registered securities thus they are only open to “accredited investors.” An accredited investor, among other things must be:

    # a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;

    # a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year…

    I personally think this is bad law with the good intention of trying to keep unsophisticated people from making bad investment choices. Anyhow, besides that VC is much further up the risk curve than most other investments (save penny stocks perhaps) and therefor requires not only money but a good amount of risk tolerance.

    It should also be noted (but is pretty much ignored) that the top 1% had much more nominal loss as the market crashed in 2008 thus the amount of money available for “risk capital” has been reduced. In the mean time the economic uncertainty has caused a great deal of money to move out of “risk” and into low risk assets such as U.S. Treasuries (which ultimately may prove to have more risk that the market now perceives.)

    Secondly, there are plenty of examples where (more) free markets have been wildly successful. The best are Singapore and Hong Kong I think you’re wrong that there was any significant industrial policy in Singapore ) Think of S. Korea’s success in consumer electronics. I don’t recall any significant government direct investment in that space.

    But I think you’re proposing a false choice in your question, too. There are not “free markets.” There are markets that are more free and markets that are less free (all the way down to planned economies.) Over the arch of history markets have become generally more free. Think of the 18th century when most international trade was really state sponsored mercantilism. As trade was liberalized (and government interference gradually removed) trade became more productive and delivered the benefits of what early classical economist David Ricardo termed as “comparative advantage.” (This was actually first mentioned by Adam Smith and David Hume but wasn’t fully articulated until Ricardo.) As a side note, Paul Krugman (when he was actually a practicing economist) won his Nobel for explaining by sometimes comparative advantage models fail. But it should be noted that Krugman still maintains that the benefits of comparative advantage through trade are the best model for creating societal wealth.

    As for Solyndra v your examples. I’m not sure that the postal service nor Amtrak could be run profitably by the private sector. There are many libertarians that assert they can but I’m not so sure insofar as there seems to be certain aspects of both that qualify as “natural monopolies”. So I think using public/private partnerships as the example of well intended policy gone bad – like Solyndra and Synfuels Corp. are better. In neither of those cases does the natural monopoly characteristics exists. But that’s not to say that neither the USPS of Amtrak wouldn’t benefit from increased competition and more market oriented models.

    Now, to address you last straw man; unfettered capitalism. Being a proponent of free(er) markets is a long way from supporting econo-anarchism. Markets occasionally fail (although the econo-anarchists would call the cure more free markets.) But I’m not of that ilk. I think there is, from time to time, the need for radical market intervention. For example, I would be all in favor of breaking up the top 8 banks in the U.S. so they were no longer too big to fail. I also support much legislation that protects the commons – although I’m willing to accept some trade-off on utilitarian grounds which are seemingly not allowed by hard-core environmentalists. So, I think you would profit by not thinking in such binary fashion. The real questions are where we draw lines and where does government intervention actually impede human progress. But I’ll admit that I probably think those lines should be much less restrictive than you do.

    I think the easier question is to ask how many planned economies have done a great deal to improve the lot on mankind. It’s probably worthy to note that even highly socialized economies, such as Sweden, could not support their socialism without capitalistic underpinnings. It appears to me that it is the capitalism that supports the socialism – not the other way around.

    • Ryan Emmett Morton


      Yeah, that didn’t help. What I’m reading:

      1) Venture capital risk-taking is good (though still suffers from risk-aversion) but government risk taking on companies like Solydra are still worse – for some reason.

      2) Rich people lossed more from the recent recession (are you ignoring the fact that they had more to lose to begin with?); but I’m not sure why I should care.

      3) Freedom of markets is a matter a degrees. OK, so what sort of market freedoms would you like to see? Why would they work? And why are the outcomes their desirable?

      4) Wealth is always good. I’ll leave that alone unless you really need me to parade my snark about on that one.

      5) You call me on “straw man” then finish with a bizarre paragraph on planned economies.

      6) You’re not a “Go Galt” kind of guy. I think…

      Feel free to correct my perceptions.


      I completely disagree about S. Korea not choosing electronics, particularly mobile phones. LG, besides it’s vertical and horizontal market control as local chaebol, enjoyed preference and deference to get ahead along with the others. The government went as far as acknowledging the country’s topography as a key reason they should support the development of the mobile phone market – and they succeeded in producing 3G phones and services years before the West really knew what 3G was.

      I thought of the fourth tiger: Japan. Loads of government choosing there as well.

      • Ryan Emmett Morton

        Spell check doesn’t do anything for grammar and syntax… #Fail.

        “3) Freedom of markets is a matter a degrees. OK, so what sort of market freedoms would you like to see? Why would they work? And why are the outcomes their desirable?” Delete the their for a more pleasurable reading experience.

  15. I didn’t call you a straw man. Maybe you should look up what a straw man argument is. What I said is that you offered a straw man when you said “unfettered captialsim.”

    Secondly, those the invest in VC do so at their own risk, I choose not to and the government has proven less able to do it successfully than private investors who risk their own money, And keep in mind my call for more public money for basic research (before you offer up another straw man.)

    And I didn’t say you should care about how much the rich lost in the recent market correction. I was answering your question why there wasn’t more VC investment and why money has flowed to less risk. Did you forget what you asked.

    I think you don’t know what Go Galt means. Please tell me what Rand was thinking (not that I’m a fan of Objectivism.)

    But I’ll put this back on you.

    Why isn’t wealth good. I’m talking about the wealth of a society not individual wealth? Would mankind be better served if we reverted to a hunter-gatherer society? Tell me why wealth (such as the fact that you own a computer and have access to the internet.) is not good or who should decide how much societal wealth should exist. What standard of living do you suppose is high enough?

    • Ryan Emmett Morton


      You have a reading problem. I said you “called me on straw man” as in you called me out on using a straw man. I did not say you called me a straw man, you ass.

      The risk of VC is FAILURE and people losing their money. At best it supports roller-coaster boom and bust. While short term gains can be gamed out, it tends to cause more havoc than help or even innovation – more ventures fail than succeed.

      Wealth that relies on the suffering of others and the destruction of the environment is short-sighted, unethical, and can’t last.

      Go Galt (I can’t believe I’m dignifying your words with this response): Atlas Shrugged based expression reflecting the story’s more innovative business people and scientists (if I remember correctly) leaving society to pursue a life without the regulating, poverty reducing government. John Galt was the name of the character who spends hundreds of pages describing why they left and what’s wrong with society and why they removed their wealth creating activities from society. Like Atlas holding up the world, they and Galt held up society until they shrugged it off. ::puke:: For the record, I was complimenting your perspective as NOT Randian. Now I wish I hadn’t.

  16. Yes, sometimes I do have a reading problem (I’m a diagnosed dyslexic.) Sorry for misreading.

    I think you misinterpret Rand and her Galt character. Galt’s Gulch was not simply to escape government. It was to escape corporate (in Rand’s words) “looters” who were enabled by government favoritism. Rand had as much antipathy for corporatism as any member of OWS has today. So, if you think not “going Galt” is a complement I think you have Rand wrong. And if going Galt is to escape corporatist looters, count me in.

    You’re answer on wealth is equally inadequate. Do you assume that all wealth “relies on the suffering of others and the destruction of the environment is short-sighted, unethical, and can’t last.”? You’ve avoided the issue entirely of collective (or societal) wealth. You’ve avoided the standard of living question as well.

    • Ryan Emmett Morton

      Don’t hide behind dyslexia. You made a very assertive and insulting point about me. There’s more than dyslexia going on there when you decide to question someone’s intelligence. And for next time, a phrase like ‘unfettered capitalism’ is not a straw man. A straw man requires an actual and complete argument.

      You’re entitled to your opinion about Galt Gulch but escaping government and escaping looters enabled by government are the same bag. Government and what it does (including who and what it favors) are inseparable.

      On wealth, I ONLY incriminate wealth ” that…” Read my post again as writing more is obviously useless. Peace out.

  17. You call that an insult? Jeeze, did you hide under the bed when your mom scolded you for not washing your hands? I apologized for chrissakes. And what I get from you is a display of butt-hurt juvinality.

    Here’s an insult, you’re a whiny hand-wringerwho doesn’t have an answer only a complaint.

  18. Ryan Emmett Morton

    Dave, you can call me anything you want but I did give you answers, I didn’t file any complaint (except about you), and you should know the difference. And don’t pass around comments like “butt-hurt juvinality” and act like that doesn’t apply equally to you. If you don’t like arguing, don’t do it.

  19. petetalbot

    One of my favorite things about blogging is when I can step back from a post and watch articulate people discuss an issue. That was happening here but it’s sort of digressing. It’s not my job to referee but I hope we can stay on topic.

    (Lord knows my passions occasional get the best of me and I write something I later regret. Case in point, Dave; that was a cheap shot I took at your concerns about the poor in the world. I was trying to be humorous and failed.)

    Some final follow-up from me. I’d peg immigration quotas on each country’s efforts to control its birthrate. I’m all for immigration but don’t feel that we have to take everyone from a country that’s cranking out babies faster than a gerbil cranks out pups. But then I’m an anti-overpopulation zealot.

    I think that comparing today’s poverty with that of past centuries is disingenuous. We might be doing better than three hundred years ago but since poverty is still rampant, we obviously haven’t improved on the system that much.

    • But I wasn’t comparing today’s poverty with past centuries. I was comparing today’s wealth. Have we not made the lot of man much better off – at least for a substantial number of them? What do you imagine was the economic mechanism that created such a lift wealth?

      As to your implied limits on immigration. Could, then, one conclude that you think that geographic birthright is a moral construct for survival?

      • Pete Talbot

        No, Dave, I don’t think that geographical birthright is a moral construct for survival. I believe that everyone everywhere should be limiting family size to reduce the strain on this world’s ever shrinking resources.

        Now I’m done. Have at it guys.

  20. No, you didn’t answer the questions you only complained about a consequence of wealth. I don’t think you have it in you. I don’t think you’ve thought about it. If I’m wrong, tell me about the limits of collective wealth and what you propose. Tell us how we lift the miserably poor up.

    • Ryan Emmett Morton

      Collective wealth can’t be separated from individual wealth. It makes no difference if per capita GDP is higher if the miserably poor become poorer and the exceedingly wealthy get wealthier:

      Further, “wealth” doesn’t address how people experience poverty.

      How we lift the miserably poor? I guess that’s the trillion dollar question. So, things I like:

      First, get rid of solutions that have no basis in fact: trickle-down economics; less regulation is better regulation; smaller government budgets are better budgets or the Norwich pathology; and tax breaks create jobs (unless the break is tied to an actual job created – rare).
      Second, we invest in education and social services and provide protections against discrimination so that the experience of poverty can be lessened through empowered people and quality of life oriented aid. Investing in children and mothers have a long history in producing high returns for the very poor here and abroad.
      Third, we raise revenue by eliminating tax breaks for the very wealthy.
      Fourth, we exercise fair trade philosophy for trade agreements to optimize innovation while minimizing or preventing exploitation.
      Fifth, we pursue state owned enterprise and private-public partnerships in markets that produce sustainable jobs and output while replacing extractive, unsustainable industries (solar and wind energy versus oil and natural gas energy).

      That’s not an exhaustive list, but it would be a great start.

  21. Collective wealth can’t be separated from individual wealth.


    What? Are you conflating the distribution of wealth with the collective well-being of of society? These are distinctly two different issues. If the world’s poorest population goes from living on $2/day to $4/day does that not constitute an increase in relative wealth? It still may be pathetic but it’s far less pathetic than $2/day. Tell me how I’m wrong. I’ll concede that an increase in GDP that leave the mean income the same is not an increase in societal wealth. Fortunately that has only happened a few times over the course of the last 200 years. But I’m not arguing for growth for growth’s sake. All I’ve said is that growth is necessary to increase overall (read median) well-being.

    First, get rid of solutions that have no basis in fact: trickle-down economics; less regulation is better regulation; smaller government budgets are better budgets or the Norwich pathology; and tax breaks create jobs (unless the break is tied to an actual job created – rare).

    Insofar as I’ve written that I think poverty in the U.S. is almost inconsequential compared to poverty in developing cultures I think your answer doesn’t address the topic. If I’ve been unclear I apologize. But for the most part your argument he is about what not to but fails to address the what might be problematic with increased regulation even if one broadly supports it.

    Second, we invest in education and social services and provide protections against discrimination so that the experience of poverty can be lessened through empowered people and quality of life oriented aid. Investing in children and mothers have a long history in producing high returns for the very poor here and abroad.

    But we have increased education spending at a much faster rate than anything except health care yet we have seen little (likely no) improvement in educational outcomes. I would ask the question of what expenditures you think would improve education?

    Fourth, we exercise fair trade philosophy for trade agreements to optimize innovation while minimizing or preventing exploitation.

    This comment begs the question. Why do you believe that “fair trade” agreements (which impose a Western values hegemony on disparate non-western cultures) leads either to your stated goal of optimizing innovation and minimizing/preventing exploitation? Could it not be true that if we impose our labor standards on, say, Cambodia they will not be able to comply with those standards and hence we would retard their economic development?

    About your public/private partnership ideal. Let me ask you this: outside of basic research, what public/private partnerships have shown success in terms of creating an increase in median living standards?

    • Ryan Emmett Morton

      Ok. What definition of collective do YOU want to use, Dave?

      Distribution is not related to collective well-being? I guess we’ll have to agree to disagree there. You keep talking about median this and median that. Focusing on increases in that measure of wealth puts us in an unending cycle of growth for growth’s sake and heightens people’s expectations in what they “need.” The experience of poverty doesn’t really end just because the “median” went up.

      Like I said, $2 a day to $4 a day doesn’t address the experience of poverty. That aside, while $2 to $4 a day makes a difference for some of the world’s poorest, $100 to $102 a day is not a remarkable difference. I think the reason is there exists a diminishing return for wealth – in both perception and buying power.

      Um, I’m not sure what you’re saying in your second paragraph, but many policies we utilize in the US materialize in structural adjustment programs in developing countries all over the place. And while they may stabilize some things, people directly suffer from those policies. So, we need to get rid of the those policies supported by those philosophies I cite. Also, I meant Norquist pathology, not Norwich – don’t know where my head was on that.

      On education, many countries spend much on education – yet have different outcomes. Just because NCLB and stuff don’t work here or interfere with allowing public schools to pursue locally valued goals, doesn’t mean less funding will help. Further, the total amount spent doesn’t reflect how funds how distributed between schools. Again, distribution is a key factor. But to directly answer you, Dave, spending on teacher salaries, tech, supplies, activities, and hot lunch (and breakfast) should improve things and certainly reduce the experience of poverty – an important outcome but not measured by math scores directly.

      On fair trade, the goal is never to impose our standards on – Cambodia, really? The goal – from my perspective – is to respect local values, customs, and people through protections against dumping, exploitation, and restrictions on exchange of ideas (patents as well as speech to clarify the breadth I’m suggesting). Although, if Cambodia really enjoyed our labor standards, they would enjoy such a large increase of income I doubt their development would be “retarded.” Further, we can’t presume that development improves their society beyond increased consumption – at the cost of their environment, an all too overlooked part of quality of life.

      On partnerships – basic research? What does that mean? Research and development is just that. There’s no “basic” research. Public universities produce a great deal of patents important to improving quality of life. Public and private entities have long enjoyed invaluable innovation working together and separately. State owned enterprises played a key role in double digit growth in contemporary China. In the US, AmeriCorps and publicly owned utilities (except in Great Falls electricity it seems) have played important roles in securing important services. Development corporations have also invested and produced positive results in housing, business innovation and incubation, and technology.

  22. Apologies for the screwed up formatting. That what I get for trying to debate when I’m working.

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