Thursday, November 04, 2010


Who said this?

"The only way America succeeds is if businesses are succeeding. The reason we've got an unparalleled standard of living in the history of the world is because we've got a free market that is dynamic and entrepreneurial, and that free market has to be nurtured and cultivated."

A. Ronald Reagan

B. Jack Welch

C. George H.W. Bush

D. Bill Clinton

E. Warren Buffett

F. George W. Bush

G. Barack Obama

Answer (at 47:00).

I wonder if he was reading TigerHawk in August.

UPDATE: Hey, I was just pleased to hear the president say those words. It is worth toggling the video back to 46:00 or so and let it run a few minutes, so that you have the full context. It is more hedged than a statement, say, Milton Friedman would make, quite understandably. And "nurtured and cultivated" probably doesn't mean what we think it means.

We have lived in a mixed system for some time -- not pure, completely unregulated free market capitalism, and not a command economy of the socialist or communist type -- so a dynamic tension always exists regarding the extent of government involvement in the economy, and how regulations should be changed and updated. The metaphor I like to use is: if you're a good basketball player, would you rather always play a pick-up game at the playground (the rules being loosely enforced by the players, and the condition of the court itself not always great), or do you want to play in a real league with decent referees and facilities? Or do you want to play in an more rigid system such as existed for women in the early days of the sport, when the "rules called for six to nine players per team and 11 officials?" Which environment is likely to be better for all participants? In any case, it is helpful if the guy in charge of basketball at least likes the sport of basketball, and recognizes the underlying competitive nature of the game.

As long as we're on the subject of basketball, somebody like John Rogers, the founder of Ariel Capital Management (Princeton Class of 1980, captain of the basketball team, which had a freshman named Craig Robinson on it that year), and an early backer of Barack Obama, could have a staffer write a draft of a speech for the president that would include an acknowledgement of how challenging it is to build a business and adapt to changing circumstances. There are other people like John Rogers in the president's "kitchen cabinet," and he should use that resource to give some rah-rah speeches. At this point, it wouldn't cost him anything, and indeed it could disarm Republicans in the House who are convinced he is anti-business, and it would dovetail with what appears to be a new emphasis on job growth and the economy, and reducing the deficit.


By Blogger Don Cox, at Thu Nov 04, 05:34:00 AM:

The problem is that where companies get very large and have a monopoly or near-monopoly, there is no longer a free market.

At what point do you stop encouraging a business and start limiting its operations (or depradations)?
The other problem is crooked businesses such as Scientology or quack medicine sellers, which may be very successful commercially. Should they be encouraged or discouraged?

It is too simple to say that encouraging any business is automatically good.  

By Anonymous Ignoramus, at Thu Nov 04, 07:58:00 AM:

This hour-long press conference is worth watching, or reading ... Here's the transcript.

You can get an abridged version by just looking at some of the questions that were asked. The answers were mostly BS spin.

Question Number 1 (Ben Feller AP):

Are you willing to concede at all that what happened last night was not just an expression of frustration about the economy, but a fundamental rejection of your agenda?  And given the results, who do you think speaks to the true voice of the American people right now:  you or John Boehner?

Question Number 2 (Hot Chick from NBC):

Just following up on what Ben just talked about, you don’t seem to be reflecting or second-guessing any of the policy decisions you’ve made, instead saying the message the voters were sending was about frustration with the economy or maybe even chalking it up to a failure on your part to communicate effectively. If you’re not reflecting on your policy agenda, is it possible voters can conclude you’re still not getting it? Follow-up Q    Would you still resist the notion that voters rejected the policy choices you made?

Question 3 (Mike Emanuel):

Health care -- as you’re well aware, obviously, a lot of Republicans ran against your health care law.  Some have called for repealing the law.  I’m wondering, sir, if you believe that health care reform that you worked so hard on is in danger at this point, and whether there’s a threat, as a result of this election.

Question 5 (Chip Reid):

Republicans say more than anything else what this election was about was spending.  And they say it will be when hell freezes over that they will accept anything remotely like a stimulus bill or any kind of a proposal you have out there to stimulate job growth through spending.  Do you accept the fact that any kind of spending to create jobs is dead at this point?  And if so, what else can government do to create jobs, which is the number one issue? Follow-up Q    But most of those things that you just called investments they call wasteful spending and they say it’s dead on arrival.  It sounds like -- without their support, you can’t get any of it through.

Q    -- the idea that your policies are taking the country in reverse.  You just reject that idea altogether that your policies could be going in reverse?

Q    Since you seem to be in a reflective mood, do you think you need to hit the reset button with business?  How do you plan to set that reset button with business? ... Follow-up: But do you have new specific proposals to get them off the sidelines and start hiring?

Last Q    How do you respond to those who say the election outcome, at least in part, was voters saying that they see you as out of touch with their personal economic pain?  And are you willing to make any changes in your leadership style?

... Road trip !  

By Blogger randian, at Thu Nov 04, 08:33:00 AM:

The problem is that where companies get very large and have a monopoly or near-monopoly, there is no longer a free market.

And how was that achieved without government aid, either in the form of onerous regulation or outright subsidy? You can't have true monopoly without it. Even Standard Oil and Alcoa, companies often cited in justification of anti-monopoly regulation, were swiftly dropping their prices long before government regulators took action to break them up. They wouldn't be doing that if they actually had monopoly power.  

By Blogger Dawnfire82, at Thu Nov 04, 08:56:00 AM:

"And how was that achieved without government aid, either in the form of onerous regulation or outright subsidy? You can't have true monopoly without it."

Eh, that's not actually true. A single company can, in fact, grow into becoming a dominant firm on its own. AT&T, for instance, as well as Alcoa, Standard Oil, Microsoft, and so on. Utilities are often natural monopolies which beg for, but did not originally have, close government regulation.

There is still Sherman Act Section 2 litigation, and it targets companies that don't have 'government approved' monopolies because the whole premise of such an action is that the monopoly is achieved or maintained illegally (hardly possible when it is held with the blessing of the government).

Alcoa and Standard Oil were attacked under older interpretations of antitrust law that was pro-competitor rather than pro-consumer. Such interpretation is no longer commonly practiced, and certainly not by the Supreme Court.

But just because a company doesn't gouge customers to the maximum doesn't mean they don't have monopoly power, especially if there are significant barriers to the entry of new new competitors to the market (in which case the best pricing scheme is above normal competitive levels, but still low enough to prevent profitable entry by all but the most efficient new or fringe firms).

While the threat of "evil monopolies" is commonly, and drastically, overstated in comparison to reality the threat does in fact exist. But the threat of triple damages and dissolution are things that potential monopolists take very seriously.  

By Anonymous Boludo Tejano, at Thu Nov 04, 09:10:00 AM:

Don Cox:
The problem is that where companies get very large and have a monopoly or near-monopoly, there is no longer a free market.

What happened to the US Steel monopoly?
What happened to the IBM monopoly?
What happened to GM's market dominance, if not monopoly?

No one is on top forever.  

By Blogger Viking Kaj, at Thu Nov 04, 10:36:00 AM:

I've been saying all along that he is not a socialist.

He is a Stalinist kleptocrat. See eg. the Daley machine.

A parasite is only successful if they don't kill the host.

So Barry loves the corporations, as long as he can shake them down.  

By Anonymous Anonymous, at Thu Nov 04, 10:55:00 AM:

"So Barry loves the corporations, as long as he can shake them down."

What does Obama have in common with GE's Jeffrey Immelt, Boeing's Jim McNerney, Honeywell's David Cote, PepsiCo's Indra Nooyi, McGraw-Hill (S&P)'s Terry McGraw III, and United Technologies's Louis Chenevert.

They're all part of the India Trip Touring Party, and they're all part of The Borg.  

By Anonymous Anonymous, at Thu Nov 04, 03:02:00 PM:

Wow, Obama is such a vivid liar.

But then one wonders what Democratic Partisan is not dishonest?

The Clinton Negligence revealed a big fraud to all, with endless lies to the American Public. The lie about the 'end of big government' turned quickly into Hillary's attempt to Nationalize Health Care behind closed doors - coupled with Bill's massive TAX Hike, one of the biggest tax increases in US History.

Democrats lie, and Obama is sounding more desperate every minute. I guess the FREE MARKET - conservative agenda, is the winner in political imagery.

The question is, can we remove all of the Democratic Party's disastrous folly before it is too late?

And will Obama block the sound effort to overturn his personal folly?  

By Anonymous Ignoramus, at Thu Nov 04, 07:57:00 PM:

In this hour-long press conference Obama gave a single obligatory shout-out to "business" "entrepeneurs" and "free markets." It was as sincere as his thanking the ladies in the kitchen.

There's a lot more to plumb in this presser, I submit, including an NBC reporter (she's hot!) telling the President "you're still not getting it." Look at the link above for Answer and jump to 11:07.

Can you say "watershed moment."  

By Blogger Gary Rosen, at Fri Nov 05, 12:37:00 AM:

"It was as sincere as his thanking the ladies in the kitchen."

They cut out the part right afterwards where he says, "Thank you, try the veal".  

By Anonymous JeremiadBullfrog, at Fri Nov 05, 01:57:00 AM:

This is the problem with Obama: He knows what everyone wants to hear and says a little bit to everyone. Remember all the promises for a "net spending decrease" and how he was going to go "line by line" through the budget and how he was going to close Gitmo, etc.? Here again we have something he "sincerely" believes, but how much to you want to bet that the terrible circumstances he "inherited from Bush" are going to cause him to go against his true, heartfelt small government, fiscally conservative principles once again?

There's also the problem of tossing certain words as if they were absolutely good as opposed to conditionally good. For example, "compromise" and "moderate". Who wants to be against compromise and moderation unless they're a livid radical? But these words are empty without a context, and so they can be manipulated to make people feel good about what they think they're getting. This is straight out of Alinsky (cf. we can have reconciliation if it means we get what we want and the other side has to be reconciled to it.) So yes, I'd agree that a great deal hangs upon what he means by "nurtured and cultivated".  

By Blogger Gary Rosen, at Fri Nov 05, 02:30:00 AM:

Jeremiad - that is great. You perfectly expressed how BO operates.  

By Blogger Don Cox, at Fri Nov 05, 05:58:00 AM:

I think what Escort81 says in his update about the mixed economy is exactly right. We have a mixed economy in the US, Canada, Europe, etc; it is constantly changing and evolving as a purely communist economy could not.  

By Anonymous Ignoramus, at Fri Nov 05, 12:08:00 PM:

Re: "We have a mixed economy in the US"

Yes, we have a Mixed Economy. But if you look closely it's now over 50%. It's The Borg.

1) Obama at his recent press conference re: bailouts and Stimulus:

"I think people started looking at all this and it felt as if government was getting much more intrusive into people’s lives than they were accustomed to.  

"Now, the reason was it was an emergency situation.  But I think it’s understandable that folks said to themselves, you know, maybe this is the agenda, as opposed to a response to an emergency.  And that’s something that I think everybody in the White House understood was a danger.  We thought it was necessary, but I’m sympathetic to folks who looked at it and said this is looking like potential overreach."

I invite nerds to parse this ... interesting use of perspective from Obama's "I" Not the first time I've noticed this.

2) Rahm Emanuel: "Never waste a crisis" ... Unvarnished truth. Best quote ever?


Obama's Asia trip is ill-timed, in several respects. I don't fault him for making it, but for him it's still bad timing. He may try to spin it as "Goddam it, I'm humping in India and Korea to win jobs back home." But I don't know that it will play that way. Just look at the US CEOs he'll be hob-knobbing with ... Hope and Change indeed.

What we'll see on parade in India are many of the inner-most members of The Borg. Add in the likes of SEIU Andy Stern and the heads of the UAW etc and you have a fuller collection.

But The Borg has grown beyond its financial base -- too many piglets, not enough teat. If you look at future trajectories this is absolutely clear ... and unsustainable. So they're looking for the non-Borg to make up the difference. Blow me.

This is part of the reason why the Republican party has some identity issues.

"[The Mixed Economy] is constantly changing and evolving as a purely communist economy could not"

Precisely ... or is it?  

By Anonymous daniel noe, at Mon Nov 08, 06:11:00 PM:

That's an interesting way of putting it.  

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