Miscellaneous And Off Topic Subjects

[Hannibal]

The really big corporations in America aren't interested in innovation

Not from competition, maybe, but they love innovation if it helps them get a leg up or establish a new profitable line of business. Innovation that requires billions of dollars in R&D (e.g. fracking, new cancer treatments) has to come from big corporations.

I'm not sure about that. I'd have to see what amnesty does for voting in the states that matter. Yeah, Bernie would get a big bump in California, but Ohio? Virginia? Maybe Florida, I guess--but even then, small, I'd think.

I think that it's more widespread than you realize. Enough to swing lots of swing states permanently to a Democrat majority. It would also massively increase the electoral share of states like California.

[Wild Hoss]

The really big corporations in America aren't interested in innovation. Eventually all companies reach a point where they seek to protect what they have rather than take risks, an innately conservative strategy. And they can afford to buy candidates to ensure that threats to their market dominance are nipped in the bud

IDK about that, but there is an anti-competitive vibe at the higher levels IMO. Merging is the name of the game...why compete for customers when you can dominate the market share and make your profits by squeezing your customers?

If you compete, you might lose. Then we're falling to earh with our golden parachutes instead of buying private islands. Nobody wants that.

[iam416]

In other news, the Supreme Court stayed Obama's Power Plant Emissions reduction plan. I thought it odd that the EPA took the position that Carbon Dioxide is a pollutant. I don't necessarily disagree/agree with the plan, but I do think it's outside the scope of the CAA.

[Hannibal]

In other news, the Supreme Court stayed Obama's Power Plant Emissions reduction plan. I thought it odd that the EPA took the position that Carbon Dioxide is a pollutant. I don't necessarily disagree/agree with the plan, but I do think it's outside the scope of the CAA.

You mean a President can't just sidestep the legislative process and dictatorially shut down an industry whenever he wants? :-o

[Da Geezer]

This is an outstanding discussion.

Winston Churchill said "if you are not a liberal when you are young, you have no heart. If you are not a conservative when you are old, you have no brain."

I've spent much of my life developing land into subdivisions or site condominiums (which I originated). This led me to litigate "Regulatory Takings" for the past 27 years because of the extraordinary power that regulators apply against entrepreneurs and in favor of Social Justice or Fairness or any other convenient excuse to take property rights. The primacy of law, and the private ownership of real and personal property, have been basically unique to the US for the last 100 years or so.

There is a book called The Entrepreneurial Vocation that discusses this at length. The great entrepreneurs, from Edison to Silicon Valley, have had a special tolerance for risk, and a confidence that not everyone is born with. Money for them is scorekeeping. The entrepreneur wants to win.

This flies in the face of our current educational system where competition is viewed as evil. We have Outcomes Based Education, social promotion, pass/fail classes (and a p/f law school at Yale) and much else. This, in turn, is based on certain postulates of the left: people have equal rights and abilities, human rights mean that men=women, gay=straight, black=white, the rich are greedy, and work is an evil to be tolerated.

[hack]

Talent, I think you can go sector-by-sector through the economy and look at who is feeding at the trough in Washington vs taking risks and reaping rewards in the way that we all should value, but lets just stick to the banking sector for the purpose of brevity. Wall Street got its big win with the repeal of Glass/Steagall. Bailouts for all. The tradeoff used to be if you want a bailout, generally speaking, you have to take deposits and lend to homes and businesses. If you want to do the fancy Wall Street stuff that comes with bigger risk/reward profiles, you weren't allowed to do it with average-joe money.

Now that the limits are off, banks have less to do with entrepreneurs than ever before. It costs a lot to lend to small businesses. You have to have an army of people who understand how to make credit decisions, and they'd rather do it with fewer people and more software. Nothing wrong with that, and banks aren't charities and don't owe societies any favors. But, flipside, if they aren't willing to provide the basic financial-intermediary role they once did, then they shouldn't get bailouts.

Restoring some form of Glass/Steagall, which Bernie pledges to do, would shrink taxpayers' obligations in a crisis scenario, provide an incentive for those banks that do want to adhere to the older model, and increase access to capital for entrepreneurs. For the banks that wish to remain in the high-risk world, they are free to do so, but connected once again to the basic risk/reward calculation, and therefore probably less likely to be bubble prone.

I don't know if Bernie can get that done, and overall I don't know how much of his platform he can implement. Incremental progress may amount to plugging holes, and waiting longer could mean a real change. But if you value entrepreneurship you should value that particular part of Bernie's platform.

[hack]

This flies in the face of our current educational system where competition is viewed as evil. We have Outcomes Based Education, social promotion, pass/fail classes (and a p/f law school at Yale) and much else. This, in turn, is based on certain postulates of the left: people have equal rights and abilities, human rights mean that men=women, gay=straight, black=white, the rich are greedy, and work is an evil to be tolerated.


And, on the right, you have people claiming to be entrepreneurs but in truth reliant on Washington to kneecap potential competitors. You see it on all sides. It's natural, once you have an asset, to protect it from forces of change that could devalue it. Silicon Valley thinks it invented disruption, but this sort of thing has been ongoing for millenia.

[hack]

Hannibal, I owe you a reply. It's coming, but I gotta get some work done already.

[Da Geezer]

In other news, the Supreme Court stayed Obama's Power Plant Emissions reduction plan. I thought it odd that the EPA took the position that Carbon Dioxide is a pollutant. I don't necessarily disagree/agree with the plan, but I do think it's outside the scope of the CAA

.

It is actually more than that. This case is the first case in the history of the US wherein the SC stayed the opinion of a lower federal court before hearing the merits of the underlying case. This resulted from the tremendous damage that is done to people who lose in the lower courts during the time of the original decision to the final SC overturn. Both Federal and State Courts give a wide berth to the government's claim of need in regulation. In the whole 1990's the leading case was Lucas v. South Carolina, wherein the SC held that for there to be a compensable taking, the owner needed to prove a 100% taking. That is no longer law (since 2003), but this court has now said that the closing of coal-fired plants for the 4 years needed to appeal is itself a partial taking.

I'd just be interested if anyone can tell me of an environmental regulation, other than dumping crap into water, that cannot be justified by global warming or global cooling.

[Da Geezer]

And, on the right, you have people claiming to be entrepreneurs but in truth reliant on Washington to kneecap potential competitors. You see it on all sides. It's natural, once you have an asset, to protect it from forces of change that could devalue it. Silicon Valley thinks it invented disruption, but this sort of thing has been ongoing for millenia.

Absolutely true. That is why big banks and big existing industries, by paying whatever it takes to get the government to protect their advantage, are making a good business decision in buying the regulators. Of course, this always assumes the legitimacy of government regulation

[entropy]

The right and the left don't like the gov't when it doesn't support their positions. The gov't is needed when their positions are supported. It's that simple.

[Hannibal]

There's a huge difference between lobbying the government to keep them destroying your business with heavy regulations and lobbying the government for Gimmiedats. I'm fine with the former. WRT to the latter, there is perhaps no worse example right now than the alternative energy industry, which relies entirely on mandates and subsidies.

[hack]

I don't know that it's any more reliant than the conventional energy sector. I genuinely don't know.

As for: This energy that you speak of is the fruit of the robust, mostly laissez-faire American economy that existed in the 80s and 90s. Without this environment there is probably no Google or amazon (at least not in America), and there is no fracking boom that causes gasoline to collapse to under $2/gallon.


Well it all goes back to the internet, for which invention was funded by the DOD. So there's no Google or Amazon without the Pentagon, in truth.

As for fracking, well, that's a good example to talk about. I think the defense of entrepreneurialism would be most effective with a rigorous definition of what an entrepreneur is. Is an invention that marginally increases the availability of a particular commodity valuable? That's a good question. It's value is to some extent political. We protect American shipyards that would close in a day without protective legislation and regulation because if we didn't the DOD would have to go contract with Mitsubishi or Hyundai or some other Pacific Rim conglomerate with state ties. That clearly doesn't make shipyard owners in the US entrepreneurs. Energy producers are not in an industry with such a clear rationale for protection as that one, but it's a shade of grey.

Furthermore how would fracking be valued as a technology and entrepreneurial pursuit without regulators looking the other way on the ingredients of the fluids, or if it was known from the outset how it would destabilize the private property of others via earthquakes and other degradations? Without the ability of frackers to shed those risks from their own cost-benefit analyses, fracking may have never taken off.

So, IMO, when your viability inherently depends on a regulatory outcome that helps you offload risks you created, I don't know that what you are doing is entrepreneurialism in the way that that might be valued. I really don't know.

[hack]

Talent you brought up the idea of how Sanders would kill entrepreneurialism, but the above shipbuilding bit is interesting. Korea is now a wealthy country because of high-tech design and manufacturing. Now from individual entrepreneurs, but because the government picked winners (the bloated conglomerates known as chaebols) and let them do long-term R&D. Now they own the very high-tech world of ocean-going vessels, go toe-to-toe with Apple, etc. etc.

I don't mean to suggest that our government should be in the business of picking winners. We're not suited to the Korea model in that way. But it does suggest that what Americans tend to think of as the right landscape to encourage entrepreneurialism isn't the only way. And, if it were, well, Sanders could end up the worst nightmare you think he is and America would still be where innovation lives. I've seen what other countries try to do to develop their own innovation economies, and even if most of those plans weren't laughable pieces of bullshit they overpaid McKinsey to produce, nobody in this world has the deep-rooted innovation infrastructure the US does. There won't be Stanfords and MITs popping up in other places. There won't be VC firms that get it in the way that Silicon Valley's do. America has such an amazing head start on the rest of the world in this regard that in truth it has plenty of room to recognize its own leverage here. In addition to our own homegrown talent, the best and brightest will always come here to study, and always want to stay on. Innovators lack the ability to credibly say ``we'll pack up and leave for a better business environment''.

[iam416]

Hack:

Banks really aren't in the business of investing with entrepreneurs and start-ups. That's angel funds, then investment groups for Series A.

Banks may not lend enough to small businesses -- like dry cleaners, hardware stores, etc -- but they were never in the business of lending to start ups.

There's also a pretty compelling argument to be made that massive regulation created massive banks. Again, compliance with regulatory scheme gradually squeezed out smaller players.

I don't necessarily disagree with you on your Glass-Steagall stuff, but I don't think it's connected in any way to entrepreneurs/start ups.