Summarized very well by Milton Friedman. Wish I had more to add, but I don’t.
Business
Leaving a Trillion on the Table
(I originally posted this in 2006. With the current push toward top-down micromanagement of virtually all aspects of the economy, it seems worth posting again. I should also note that a trillion is probably way too small a number to use for an estimate of the economic value of this technology)
The invention of the transistor was an event of tremendous economic importance. Although there was already a substantial electronics industry, based on the vacuum tube, the transistor gave the field a powerful shot of adrenaline and brought about the creation of vast amounts of new wealth.
As almost everyone knows, the transistor was invented by John Bardeen, Walter Brattain, and William Shockley, all researchers at Bell Laboratories, in 1946. But a recent article in Spectrum suggests that the true history of the transistor is more complex…and interesting not only from the standpoint of the history of technology, but also from the standpoint of economic policy.
The story begins in Germany, during World War II. Owing to short-sighted decisions by the Nazi leadership, Germany’s position in radar technology had fallen behind the capabilities of Britain and of the United States. (Reacting the the prospect of airborne radar, Herman Goering had said “My pilots do not need a cinema on board!”)
But by 1943, even the dullest Nazi could see the advantages that the Allies were obtaining from radar. In February of that year, Goering ordered an intensification of radar research efforts. One of the scientists assigned to radar research was Herbert Matare, who had been an electronics experimenter as a teenager and had gone on the earn a doctorate.
Blogo-Care
During Blogo’s numerous press conferences prior to his impeachment, he hammered on a few themes that I started to think may be a precedent for the nation as a whole.
From his impeachment speech (whole text here):
And then I would say to all of you, think about the things we’ve been able to do together. Health care for all of our kids, first in the nation
In speech after speech and interview after interview he hammered home the “fact” that he had granted insurance coverage to so many in Illinois, through various means.
How has this actually been implemented in Illinois? State payments to medical providers has been dramatically slowed. From this article titled “State Owes Area Health Care Providers Millions”
“This is the worst it’s ever been it’s historically been this way, nursing home providers have had to in this kind of environment in Illinois for quite a long time”
Trade War 2009?
From the Telegraph:
The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects.
The Senate’s version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods.
The inclusion of protectionist measures has quickly raised hackles in Europe.
Catherine Ashton, the EU trade commissioner, said: “We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore.”
Back in the USA, Bill Lane, who is the government affairs director for Caterpillar, is very concerned about the implications of protectionist legislation:
“We are the first to recognise that if the US embraces Buy American then the whole notion of buying national will mestastasize and limit our ability to take part in overseas projects. We are students of history. A major reason a very deep recession turned into the Great Depression was the fact that countries turned inward.”
and
“We would be a primary beneficiary of any type of infrastructure project in the US, but at the same time we are one of the country’s largest exporters”
Caterpillar is of course not the only company for which exports are extremely important. At firms ranging from Boeing (airliners) and GE (locomotives, power turbines, medical equipment) to small manufacturing enterprises, there are millions of jobs which are dependent on the willingness of other countries to buy American products. Too often, politicians portray international trade as something we do almost as a favor to other countries, ignoring the very real benefits that Americans derive from trade.
I believe that manufacturing is very important to this country, and would support rational policy initiatives to help make American manufacturing more competitive. Starting a trade war, though, is not the answer to the problems either of American manufacturing or of the American economy as a whole.
(via PowerLine)
Wisconsin Economic Forecast Luncheon
Yesterday I attended the Wisconsin Economic Forecast Luncheon. I was invited by a financial institution that I work with, who had a table reserved. The purpose of the meeting was to network, and to hear speakers talk about the forecast for the future as far as business goes. I would guess that there were about 500 people there representing all types of business across Wisconsin. There were lawyers, bankers, construction company owners, and many other business represented. Also attending were mayors of some cities, and many state representatives and senators.