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"In the long term, then, an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.”

Yeah, lack of infrastructure. In my opinion that's true of every facet of the worthwhile goals of our national (U.S.) life, from good healthcare to cutting edge science to excellence in education.

Somewhere along the way that same short-sightedness the author discusses of mis-emphasizing short-term profit (e.g. "tax cuts") started bankrupting our future. Now we're reaping what we sowed. Practically every revolutionary advantage we gained over the last century at least (e.g., public health initiatives and sanitation, public education in the early 20th century; establishment of publicly funded research; the space program, the internet) were all collectively funded programs by government - by us - the collective will of a people not held hostage by short-sighted "anti-government" rhetoric.




> held hostage by short-sighted "anti-government" rhetoric.

I think that's part of it, but it's not all of it.

There is a business philosophy in America, so pervasive that most people aren't even aware that there are alternatives. It's the reigning dogma of every MBA program, and the Dell story is a fine example of it.

Another example is the decades-long failure of American car companies. Bob Lutz, who spent decades in the auto industry, tells of fixing a manufacturing defect that was causing a lot of cars to break spectacularly right after the warranty (then 12,000 miles). Not only did he get in trouble for spending a lot on fixing the problem, people were furious that he blew a $50m hole in their expected revenue forecast. Almost any engineer could tell what's wrong with profiting from fixing a problem that you have created. But apparently, surprisingly few American executives can.

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> Somewhere along the way that same short-sightedness the author discusses of mis-emphasizing short-term profit (e.g. "tax cuts") started bankrupting our future. Now we're reaping what we sowed. Practically every revolutionary advantage we gained over the last century at least (e.g., public health initiatives and sanitation, public education in the early 20th century; establishment of publicly funded research; the space program, the internet) were all collectively funded programs by government - by us - the collective will of a people not held hostage by short-sighted "anti-government" rhetoric.

The existence of good govt spending does not imply that govt spending is good.

Right now, the potential good spending is being crowded out by a lot of dumb spending. (That's nothing new - we blew hundreds of billions on Carter's synfuels project.)

That's why public employee pension reform in San Francisco is being driven by folks who like govt. They realize that you can't do good govt spending when 20% of your budget goes to pensions.

The same is true of SS (which is bigger) and ordinary healthcare.

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The existence of good govt spending does not imply that govt spending is good.

Of course, government spending is neither inherently good nor bad.

But the thing to watch is how same cable of rent-seeking corporations that suck-up a good portion of what you aptly-label bad government spending also whips-up the "anti-government" mob when threatened (or simply greedy).

Why is it that an honest-to-God investor in productive enterprises like Warren Buffet can call for higher taxes on the super-rich but the criminal Koch brothers bend all their effort to oppose this? Well, lower taxes for these new American oligarchs is just one piece of their entire campaign of state capture.

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Why is it that an honest-to-God investor in productive enterprises like Warren Buffet can call for higher taxes on the super-rich...

I believe it is unfair to assume that all wealthy people must share the same philosophy as Warren Buffet, just as it's unfair to assume that all members of any other economic class should or do think alike.

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No, but they should be in a higher tax bracket than you and me.

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> Why is it that an honest-to-God investor in productive enterprises like Warren Buffet can call for higher taxes on the super-rich

Careful. Buffet advocates govt policy that puts money in his pocket. (He makes a lot of money off estate taxes, which his estate will never pay.)

> But the thing to watch is how same cable of rent-seeking corporations that suck-up a good portion of what you aptly-label bad government spending also whips-up the "anti-government" mob when threatened (or simply greedy).

Some actual examples would be nice. For example, GE is one of the more successful rent-seekers. Care to provide any examples of it whipping up an anti-govt mob?

Some argue that defense contractors and/or banks are very successful rent-seekers. How about some examples of them whipping up anti-govt mobs?

And no, the Koch brothers have not whipped-up mobs.

BTW - what crimes[1], other than disagreeing with you and having more money, have the Koch's committed? (Yes, I've googled them and read what I found. It's nothing but accusations by political opponents.)

[1] I don't consider violating campaign finance laws as a crime because I believe that the first amendment applies to political speech. And, they're not doing anything wrt politics that Soros didn't do before them so unless you regard him as a criminal....

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>...GE is one of the more successful rent-seekers. Care to provide any examples of it whipping up an anti-govt mob?

From the Wikipedia page for Rick Santelli (http://en.wikipedia.org/wiki/Rick_Santelli):

"Tea Party Patriots wishes to extend a special thank you to Rick Santelli for his rant on February 19, 2009, which started this entire movement. Without Rick's rant, this movement would never have started. Many others will try to take credit but don't be fooled. He was the spark that began this fire."

Santelli was, and is, an editor for CNBC, which in 2009 was owned by General Electric. So an employee of GE, while acting in his capacity as an employee of GE, basically kicked off the Tea Party movement.

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Do you really think that some exec at GE had any role in that?

Note that the tea party has been specifically negative towards GE's rent-seeking.

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"Of course, government spending is neither inherently good nor bad."

True, but it tilts heavily toward waste. You're never as careful with someone else's money as you are with your own.

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Corporations also have executives that drive companies to the ground and yet get handsome bonuses for it. Both government and private enterprise can fall prey to problems of corruption and incompetence.

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That problem is self-correcting as long as it's possible for the company to actually die. It's the governments, heavily entrenched mega-companies, and companies that are "too big to fail" that I'm more worried about.

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It's self correcting in the individual company, but does it at a systematic level? It seems (although this is a case where data would be a lot better than a 'gut feeling') that there are more, and more egregious cases of "executives gone wild" in recent history as compared to, say, the 50ies.

In economics, "other people's money" is called the principal-agent problem, and it's an interesting one.

http://en.wikipedia.org/wiki/Principal-agent_problem

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Corporations (other than large investment banks) aren't able to force taxpayers at gunpoint to continue to finance them when they are corrupt or incompetent, so it seems like that might be a less severe problem.

ooh, ninja downvotes!

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Of course they can. They just have to lobby to remove all the restrictions and oversight that keeps them from being big enough to use themselves as a hostage.

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How is it reasonable for Buffet or anyone else to talk about raising taxes on anyone, when those taxes are used for things like flying twenty C130 Hercules cargo planes, stuffed to the rafters with $100 bills, to Iraq?

Right now, we don't have a tax problem in America. We have a stupidity problem. Stop spending money on stupid shit, and maybe those evil Koch brothers will fall into line with your views on taxation.

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I think you're missing the part where the government spends the same amount on defense regardless of the tax level. The question being batted back and forth between Democrats and Republicans is "raise taxes or print money?"

Still, I agree we need a movement which will kick-out rent-seeking entities out of the spending loop. I wasn't so much agreeing with Buffet as using him as an example.

Also, I have no desire for that Koch brothers to agree with me. I would like them to go to jail but the odds look long.

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I think you're missing the part where the government spends the same amount on defense regardless of the tax level.

And you, in turn, may be missing the point that this is ridiculous.

The question being batted back and forth between Democrats and Republicans is "raise taxes or print money?"

This is called a "false dichotomy." It's an indication that neither "side" has your interests in mind.

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"Practically every revolutionary advantage we gained over the last century at least (e.g., public health initiatives and sanitation, public education in the early 20th century; establishment of publicly funded research; the space program, the internet) were all collectively funded programs by government - by us - the collective will of a people not held hostage by short-sighted "anti-government" rhetoric."

Yeah, like the Wright brothers, Edison, Tesla and Ford discoveries. Public health has nothing to do with some specific men that wanted to put filters on water pipes, like the space program has nothing to do with people that started playing with rockets when they were kids like Von Braun.

The same could be said about education, no private institution has made US better, everything of value has been created from central planning.

And never ever consider Ethernet invention having ANY role whatsoever over Internet.

Let say it clear: Everything of value is created by central planning and monopoly and despotic power over economy!!

The economy is failing because of the evil, the private and evil corporations, because the gov spending near 60% of the money that exist on developed countries, the central banks having a monopoly over the money and gov spending more money on killing that in public services has nothing to do with that.

Because we know politicians have not short term profit mindset like winning elections on a four years basis, they only have our best interest in mind.

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> Yeah, like the Wright brothers, Edison, Tesla and Ford discoveries.

Amusingly enough (or sadly, depending on your perspective), the Wright brothers and Edison are particularly known for their counter-productive attempts at locking their respective markets by unfair practices that badly harmed their businesses in the long term (airplanes, DC power, cinema...).

You're pushing forward the false idea that progress depends on some great spirits. Fortunately this is untrue; weren't it for the Wright brothers and Edison, someone else would have made the very same discoveries at about the same time. In fact it's exactly what actually happened; the airplane, the phonograph, etc. were all invented independently at several places around the world at about the same time (give or leave a few months).

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Regarding tax cuts, I recommending taking another look at the history of American innovation and taxes. When I overview American history I see great innovation and economic growth from 1800 to 1930's, a period of low taxes. I see 1940's to 2010's as beneficiaries of earlier innovations and incremental improvements (but less innovation and growth compared to earlier period) and a time of high taxes.

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