The Obama Concert

I share James’ view that the first part of the speech could have been delivered by any previous candidate. About the only place the speech differed is that Obama is clearly a more gifted public speaker than Kerry or even Gore. The speech is the same old stuff we’ve heard before. There are more people unemployed, income is down, more people don’t have health care than before Bush, and elect me and I’ll make the economy dance like a puppeteer makes a marionette dance. And since you are part of the economy I’ll make you dance too. Meh. No thanks.

And I’m getting so sick of hearing this magic energy pony (using James’ term). If it was the case that these technologies could generate profits right now then firms would be entering these new markets. Even if, as Dave Schuler pointed out, that firms are holding back in the expectation that the government will subsidize initial investments, this only points out the perversion of government involvement in the economy. The government has to subsidize even profitable industries?

And what is this nonsense that a firm has a responsibility to employ people. I’m sorry, but a firm exists for the purpose of generating profits. No profits, no firm and no employment. And what exactly are the “rules of the road” for a firm? To sacrifice profitability for workers welfare? Do that long enough and soon there wont be a firm to employ the workers. And what about the responsibility of people to fend for themselves, make the right decisions and not expect government to bail them out? I guess that is too much to ask. If you keep bailing people out, then you will keep having people make bad decisions. After all the downside has been reduced or even eliminated. Have too many kids, no problem we’ll increase taxes on those who didn’t. Can’t afford or decide not to have health care? No problem we’ll increase taxes on those who can?

And what is it with this “each of us has the freedom to make of our lives what we will…” baloney? If I make the right decision and don’t treat my house like an ATM machine getting home equity loan after home equity loan to fund trips and large ticket purchases. If I don’t try to get a house that is beyond my means to afford and also made sure to lock in at a good interest rate why should I be punished if some other bonehead down the street doesn’t? How come I have to stop making of my life what I will to help the fool? Yes it is nice to be compassionate and help out others, but just because I made smart decisions doesn’t mean I am in a position to help others. But here comes Barack Obama telling me I have to help these people whether I can afford to or not.

This is the same old mealy-mouthed crap we’ve gotten in the past. Do Democrats understand the problems of incentives? I’m pretty sure they do which makes all of this kind of blather rather cynical and manipulative.

Oh, and yeah 43 minutes? Get that man an editor!

FILED UNDER: Campaign 2008, Politicians, US Politics,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Jeffrey W. Baker says:

    The fact that profitable companies haven’t entered the renewable energy business is evidence only of market failure, nothing else. The market, as we have seen a half-dozen times this year alone, is completely incapable of predicting anything. If you want any kind of forward-looking policy, you have to use the power of government to distort — yes, distort used in the positive sense! — the market in order to achieve the desirable outcome. If left to pure doctrinaire market forces, nothing would ever get done in the world, and the economy would be unable to escape a local maximum condition. With planning, regulation, and market distortion the economy can escape a local maximum to reach a higher operating point.

  2. Steve Verdon says:

    Market failure? I’m not sure about that. Oil and gas prices are still quite high, yet these green technologies still whine for more subsidies.

    The market, as we have seen a half-dozen times this year alone, is completely incapable of predicting anything.

    Uhhmmm, no, the market doesn’t predict anything, people look at the information the market provides via prices and make predictions.

    If you want any kind of forward-looking policy, you have to use the power of government to distort — yes, distort used in the positive sense! — the market in order to achieve the desirable outcome.

    The literature on time inconsistency argues against you. But hey, what to Nobel Prize winning economists know anyways.

    If left to pure doctrinaire market forces, nothing would ever get done in the world, and the economy would be unable to escape a local maximum condition.

    This is a joke right? Nothing would ever get done. Hyperbole much?

    With planning, regulation, and market distortion the economy can escape a local maximum to reach a higher operating point.

    Yes it worked so well with the former Soviet Union and former Eastern Block countries. Why look at them now, they are all blowing the doors off of the U.S. and have higher….oh never mind. Then lets look at China…oh…yeah not so good either. Guess you got me here. Or not.

  3. Jeffrey W. Baker says:

    Good points, Steve. There is no philosophy that lies between full-on socialism and 100% unsupervised capitalism.

    You can’t be arguing today that markets don’t fail. The consumer credit market is the perfect example. Left totally unregulated, it embarked on a runaway mission to ruin itself. Or look at agriculture. During the 90s the growers of hops all went out of business because the price didn’t support the business. Now the price of hops is through the roof, the brewers are all screwed, and people are scrambling to get back into the hops growing business. Pure, distilled market failure.

    Markets are stupid and frequently misbehave. The only signal it produces is the clearing price, and that signal isn’t everything we need to know. We have to look forward, to use our brains to ask the questions the market doesn’t answer. If we act on this market signal, will we be able to feed ourselves in five years? If we act on this market signal, will we have any energy production ten years from now? These questions are important and they must be asked, and answered, to keep society from collapsing. Blind slavery to the price signal doesn’t work.

  4. Brett says:

    The government has to subsidize even profitable industries?

    Yeah, too bad individual economic viability isn’t the only thing that the government makes its decisions by. By your logic, we should let even vital defense industries go under even if they are slightly less than the most profitable, even though the cost of not having those components could cause considerable pain (economic and otherwise) in the near and far future.

    Yes it worked so well with the former Soviet Union and former Eastern Block countries. Why look at them now, they are all blowing the doors off of the U.S. and have higher….oh never mind. Then lets look at China…oh…yeah not so good either. Guess you got me here. Or not.

    I guess somebody should tell Denmark. Silly welfare-happy Danes, thinking they have 2.8% unemployment and 1.8% real GDP growth (slightly less than the United States’ 2.2%, but then Denmark doesn’t have 4.6% unemployment with it and vastly greater inequality.)

    es it is nice to be compassionate and help out others, but just because I made smart decisions doesn’t mean I am in a position to help others. But here comes Barack Obama telling me I have to help these people whether I can afford to or not.

    This is why I’m not a libertarian. Does it honestly not occur to you that there can be worse economic consequences from not helping the idiots once in a while rather than sitting pretty on your smug little pedestal? But then, I’m not surprised; you seem to judge almost everything even a government does by whether or not it improves the profitability of private business.

  5. Steve Verdon says:

    But then, I’m not surprised; you seem to judge almost everything even a government does by whether or not it improves the profitability of private business.

    Quite wrong, I judge government whether it tends to make people better off or worse off and how it does this. Making people who make good decisions worse off to make people who made stupid decisions better off is simply perverse. Both from an incentive stand-point and from an ethical/equity stand-point.

    Oh and the OECD puts the unemployment rate in Denmark at 3.7% and 3.3% for 2007 and 2008 respectively. Even if we apply the maximal adjustment noted in footnote 2 (just to give you the benefit of the doubt), that becomes 2.7% and 2.3%, so it depends on how you measure it in some regards. Also, the economy appears (as does the U.S. economy) to be slowing with projected growth for 2009 being 0.6%. Also, it is believed that the Danish employment rate is well below NAIRU meaning problems with inflation down the road. If we were really into that planning thing you seem to espouse we need to put some of those employed people out of work.