Entrepreneurship

Nothing Is Inevitable

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Neither rise nor decline. Pay attention, American-declinist intelligentsia of various stripes:

Is 2011 the year that the India story—carefully buffed for the better part of a decade by boosters and dispassionate observers alike—begins to lose its sheen? If foreign investors are a bellwether, then the answer may well be yes.
 
In January, foreign institutional investors, driven in part by high inflation and the sluggish pace of economic reforms, pulled $900 million out of India’s stock markets. According to the United Nations Conference on Trade and Development, foreign direct investment in India plunged 32% last year to $24 billion, making it Asia’s only large economy to suffer a decline in that period. (China attracted more than four times as much FDI as India in 2010.) A recent survey of 89 fund managers by Morgan Stanley showed that only a quarter of buy-side investors believe that India will beat other emerging markets this year, the glummest outlook in two years.

Sadanand Dhume, WSJ-Asia (via the AEI Enterprise blog.)

America wastes no talent
 
Conventional wisdom holds that America’s global competitiveness is driven by geniuses flocking to its shores and producing breathtaking inventions. But America’s real genius lies not in tapping just genius — but every scrap of talent up and down the scale.

Shikha Dalmia, the Daily (via HotAir.)

 
My father likes to make the same point (“America finds a way to use everybody.”) Some immigrants pay attention, you know. Sometimes better than certain intelligentsia.

Some time back Lexington Green asked, musingly, what exactly drew us all to this corner of the blogosphere known as ChicagoBoyz?

One underlying theme, in my opinion, is how hard it is to create and sustain a prosperous, safe society. Rule of law, a sound moral grounding, a good quality educational system, scientific study, a well-trained and funded military, proper planning and understanding of various logistics, a keen sense of what is possible and what is not, and so on. Wealth, beauty, comfort, kindness, and, well, “goodnesses” of all sorts don’t just happen. It takes effort. It takes thought. It takes understanding.

It takes a lot of hard work. Nothing is inevitable. Neither rise nor decline. We Americans have many advantages. We should cultivate them.

The Right to Earn a Living: A Revolutionary Idea in Tunisia and America

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Revolution against tyranny has blazed across North Africa and Arabia, as President George W. Bush envisioned in his idealistic second inaugural address. The conflagration was lit on December 17, 2010 by Mohamed Bouazizi of Tunisia, who had been denied a license to sell fruits and vegetables from his cart because he didn’t pay a bribe. A policewoman confiscated his vegetable cart and his wares. He was beaten when he protested, and on December 17 the humiliated young man set himself on fire. He died a few weeks later. Contagious demonstrations in Tunisia quickly followed the fateful denial of Mr. Bouazizi’s liberty.

The liberty whose denial inspired the overthrow of regimes in Tunisia, Egypt and, with any luck, Libya was economic liberty, or the right to earn a living. Although that liberty was obviously important to Mr. Bouazizi, the left regards economic liberty, to the extent it regards it as a liberty at all, as a lower order of liberty.

So do the federal courts. Economic regulations get minimal scrutiny under the Equal Protection and Due Process Clauses of the Constitution. The Takings Clause and the Contract Clause, which were intended to protect property rights and contract rights, have been enfeebled by the Supreme Court.

The division between economic liberties and other liberties is not one the Founders of this republic would have understood. Our revolution too was provoked by economic depredations. The interrelation of liberties is hard to miss. Free speech is much more difficult to exercise effectively without property that individuals rather than governments control.

State and local governments do most of the suppressing of the right to earn a living and the confiscating of vegetable carts in the United States. Conservatives who believe in federalism should be careful not to romanticize the states. From the perspective of an entrepreneur, another layer of regulation is no more felicitous merely because it emanated from a state capital.

States require licenses for all manner of innocuous occupations. Although consumer protection is the usual excuse, little is accomplished by occupational licensing beyond preventing people from getting a start or a new start in life and restricting the supply and increasing the cost of a given type of professional.

The District of Columbia, which unfortunately for its residents possesses home rule powers, recently decided to require wildlife control operators (people who trap varmints infesting houses) to be licensed. As is often the case with occupational licenses, wildlife control operators will have to take a class, pass an exam, and pay a fee. But in addition, the legislation eccentrically requires licensed wildlife control operators to capture and remove animals in ways that aren’t lethal, painful, or even “stressful” for the animal.

While states are the primary malefactors when it comes to occupational licensing, the Obama administration, of course, would not want to miss out completely on a means of controlling economic activity. And so the Internal Revenue Service has recently adopted  regulations  requiring tax return preparers who aren’t lawyers or CPAs to obtain a tax preparer identification number and to pay a user fee. The IRS intends to require competency testing and continuing education of tax return preparers.

On a larger scale of licensing, the Obama administration has capriciously denied permits to businesses that want to produce energy. Last month the Environmental Protection Agency vetoed a water permit that the Army Corps of Engineers had granted to a West Virginia coal mine in 2007 after nearly a decade of study.

The administration has imposed a series of unlawful moratoria on drilling in the Gulf of Mexico. Companies servicing offshore oil and gas drilling argued before U.S. District Judge Martin Feldman, a fiery intellectual, that the first moratorium violated the Administrative Procedure Act because it was arbitrary and capricious. Writing that he was “unable to divine or fathom a relationship between the [government’s] findings and the immense scope of the moratorium,” Judge Feldman issued a preliminary injunction against the moratorium.

The Interior Department quickly issued another moratorium, which it withdrew in October. Since then, the administration has imposed a de facto moratorium by not granting any permits for deepwater drilling in the Gulf. Finding those evasions to be in contempt of his preliminary injunction, Judge Feldman ordered the government to pay the companies’ attorneys’ fees. And last week he ordered the Bureau of Ocean Energy Management to act on five pending permit applications within thirty days, saying that the “permitting backlog is increasingly inexcusable.” So far, neither the court’s order nor soaring oil prices have awakened the Bureau of Ocean Energy Management.

Perhaps the ardor for freedom will circle back from the Middle East to the United States without any unemployed miners or offshoremen having to set themselves afire.

Does anybody in Chicago use Direct TV ?

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I live in the mountains east and north of Los Angeles. Last summer, when I bought my house, I ordered Direct TV for television service as the cable company wouldn’t even schedule an installation until the escrow closed. I had no complaints about the TV service until the first snowfall. I had no service for two days. I called Direct TV and was told that snow interferes with the signal (duh !) and there was nothing I could do. I had a satellite dish in New Hampshire in 1994 and 95 and never had this problem. The next time it happened I called and finally got to a technical advisor who told me there was such a thing as a dish heater but Direct TV had nothing to do with them. He did give the URL of several web sites where I could get more information. I found that I would have to install the heater myself and the dish is nearly 20 feet above my upper deck.

Last weekend, when we had more snow, Cindy was atop a seven foot ladder trying to reach the dish with a broom but with no luck. The angle of the dish, which catches more snow, makes it impossible to brush the dish off. It seems to be a pretty common problem and one would think that Direct TV would anticipate these problems in areas with substantial snowfall. Maybe they could supply the dish heaters as an option, especially when the dish is mounted so high. Then the technician could install both. The new dishes also seem to be of a deeper chord and the location may determine the angle of elevation to the satellite. New Hampshire is a higher latitude, as is Chicago, and that dish seemed to be flatter in my recollection.

Does anybody in Greater Chicago use these dishes and do they have problems like this ? I got nowhere with them, and am not about to try to install a heater on the dish, so I finally canceled and will have to pay a substantial early cancellation charge.

The crisis of the intellectual

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I was directed to an excellent post by Walter Russell Mead today. It is on the subject of the American social model and the coming era of tumultuous social unrest as the old welfare state model collapses. Europe is already seeing this collapse as nations like Greece face bankruptcy and England deals with the consequences of severe cutbacks in social spending to avoid it.

The US is facing similar economic consequences if the level of spending is not addressed soon. The 2010 elections show that the people recognize the crisis but the “political class” seems less concerned.

“It’s telling to note that while 65% of mainstream voters believe cutting spending is more important, 72% of the Political Class say the primary emphasis should be on deficit reduction,” Rasmussen said.

“Deficit reduction” is code for raising taxes. Spending is heavily embedded in the culture of the political class.

Mead is concerned that the intellectual demographic, those with advanced degrees and careers denominated by thinking rather than doing, is unable to cope with the new situation.

There’s a lot of work ahead to enable the United States to meet the coming challenges. I’m reasonably confident that we remain the best placed large society on earth to make the right moves. Our culture of enterprise and risk-taking is still strong; a critical mass of Americans still have the values and the characteristics that helped us overcome the challenges of the last two hundred years.

But when I look at the problems we face, I worry. It’s not just that some of our cultural strengths are eroding as both the financial and intellectual elites rush to shed many of the values that made the country great. And it’s not the deficit: we can and will deal with that if we get our policies and politics right. And it’s certainly not the international competition: our geopolitical advantages remain overwhelming and China, India and the EU all face challenges even more daunting than ours and they lack our long tradition of successful, radical but peaceful reform and renewal.

No, what worries me most today is the state of the people who should be the natural leaders of the next American transformation: our intellectuals and professionals. Not all of them, I hasten to say: the United States is still rich in great scholars and daring thinkers. A few of them even blog.

His concern is that the intellectuals seem caught in a mind set that goes back to the 19th century and the Progressive Era.

Since the late nineteenth century most intellectuals have identified progress with the advance of the bureaucratic, redistributionist and administrative state. The government, guided by credentialed intellectuals with scientific training and values, would lead society through the economic and political perils of the day. An ever more powerful state would play an ever larger role in achieving ever greater degrees of affluence and stability for the population at large, redistributing wealth to provide basic sustenance and justice to the poor. The social mission of intellectuals was to build political support for the development of the new order, to provide enlightened guidance based on rational and scientific thought to policymakers, to administer the state through a merit based civil service, and to train new generations of managers and administrators.

It’s interesting that one of the comments, a lengthy one, exactly restates this issue but supports this model and argues with Mead that it is still superior.

Second, there are the related questions of interest and class. Most intellectuals today still live in a guild economy. The learned professions lawyers, doctors, university professors, the clergy of most mainline denominations, and (aspirationally anyway) school teachers and journalists are organized in modern day versions of the medieval guilds. Membership in the guilds is restricted, and the self-regulated guilds do their best to uphold an ideal of service and fairness and also to defend the economic interests of the members. The culture and structure of the learned professions shape the world view of most American intellectuals today, but high on the list of necessary changes our society must make is the restructuring and in many cases the destruction of the guilds. Just as the industrial revolution broke up the manufacturing guilds, the information revolution today is breaking up the knowledge guilds.

He goes on to criticize medicine as a guild but I think he is unaware of the rapid changes going on in medicine today. The image of the family GP is quickly shifting to the multispecialty group with primary care provided by nurse practitioners and physician assistants. Those who want a personal relationship with a primary care physician, or even a favored specialist, will increasingly be required to pay cash for the privilege as many doctors who want to continue this model of practice are dropping out of insurance and Medicare contracts because of the micromanagement and poor reimbursement.

In most of our learned professions and knowledge guilds today, promotion is linked to the needs and aspirations of the guild rather than to society at large. Promotion in the academy is almost universally linked to the production of ever more specialized, theory-rich (and, outside the natural sciences, too often application-poor) texts, pulling the discourse in one discipline after another into increasingly self-referential black holes. We suffer from ‘runaway guilds’: costs skyrocket in medicine, the civil service, education and the law in part because the imperatives of the guilds and the interests of their members too often triumph over the needs and interests of the wider society.

Almost everywhere one looks in American intellectual institutions there is a hypertrophy of the theoretical, galloping credentialism and a withering of the real. In literature, critics and theoreticians erect increasingly complex structures of interpretation and reflection while the general audience for good literature diminishes from year to year. We are moving towards a society in which a tiny but very well credentialed minority obsessively produces arcane and self referential (but carefully peer reviewed) theory about texts that nobody reads.

Once again, costs in medicine are a subject by themselves but the solution does not lie in controlling doctors’ incomes. With respect to the academic institutions, I have personal experience here and will describe some of it. The Humanities have been hollowed out by a trend to both politicize and to leave the subject behind as “critical thinking” goes on to analysis that has little to do with it. The Sokol Hoax is but one example.

The Sokal affair (also known as Sokal’s hoax) was a publishing hoax perpetrated by Alan Sokal, a physics professor at New York University. In 1996, Sokal submitted an article to Social Text, an academic journal of postmodern cultural studies. The submission was an experiment to test the magazine’s intellectual rigor and, specifically, to learn if such a journal would “publish an article liberally salted with nonsense if it (a) sounded good and (b) flattered the editors’ ideological preconceptions.”[1]

The hoax precipitated a furor but did not result in much improvement in such publications. My daughter had personal experience when her freshman courses in English Composition and American History Since 1877 both contained numerous examples of political and “social justice” alteration of the subject matter. For example, she was taught that the pioneers in the west survived by “learning to live like the Native Americans.” The fact is that the pioneers were mostly farmers and ranchers and the Native American tribes of the southwest were hunter gatherer societies who did not use agriculture or animal husbandry. She was also taught that the “Silent Majority” of the 1960s were white people who rejected the Civil Rights Act of 1964. Thus they were racists. Even Wikipedia, no conservative source, disagrees:

The term was popularized (though not first used) by U.S. President Richard Nixon in a November 3, 1969, speech in which he said, “And so tonight—to you, the great silent majority of my fellow Americans—I ask for your support.”[1] In this usage it referred to those Americans who did not join in the large demonstrations against the Vietnam War at the time, who did not join in the counterculture, and who did not participate in public discourse. Nixon along with many others saw this group as being overshadowed in the media by the more vocal minority.

She has since transferred to another college.

The foundational assumptions of American intellectuals as a group are firmly based on the assumptions of the progressive state and the Blue Social Model. Those who run our government agencies, our universities, our foundations, our mainstream media outlets and other key institutions cannot at this point look the future in the face. The world is moving in ways so opposed to their most hallowed assumptions that they simply cannot make sense of it. They resist blindly and uncreatively and, unable to appreciate the extraordinary prospects for human liberation that this change can bring, they are incapable of creative and innovative response.

I think this is the source of the “media bias” so prominently referred to by the Right and by many who are not politically focused. This is why talk radio and Fox News have been such huge successes to the consternation of the political class and their supporters. Charles Krauthammer famously said, “Rupert Murdoch (owner of Fox News) found a niche market that contained 50% of the population.”

The Tea Parties are another manifestation of the frustration of the general population with the political class but also with the intellectual class that seems to be wedded to the first. The university community is, at least in the non-science segment of it, increasingly isolated from the concerns of the society that supports them. CalTech has for many years had a Humanities program to expose science and engineering students to culture. Unfortunately, a student in a large university will find much less culture and much more politics in Humanities departments these days.

A couple of other blog posts are worth reading on this subject. One is here and the other is here. They are both worth reading in full.

The Left and conspiracy theories

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Cross posted on my own blog

Fifty years ago, a book was written about political conspiracy theories. It was called “The Paranoid Style in American Politics.” It was written in 1964 and has been a staple of the left ever since. Its theme was the paranoia of the political right that was looking for communists in the State Department and harassing Hollywood actors and writers. It was specifically directed at Senator Barry Goldwater who was the Republican nominee that year. It is still in print with new material contributed by Sean Wilentz, an Obama supporter and leftist professor of history.

It has been an article of faith on the left that conservatives are paranoid about such subjects as communists (Although defenders of Alger Hiss were disappointed to find him in Soviet archives as a spy) and foreign threats like the Soviet Union and militant Islam. The left now says that they knew all along that the USSR would collapse and Reagan had nothing to do with it. Fortunately for them, You Tube was not around in those days to record speeches to the contrary. The threat of militant Islam is the latest example of a threat dismissed by the left. President Obama has embodied this concept in his “reaching out” to Iran and Syria. Nancy Pelosi even conducted her own diplomacy while Bush was president by visiting Syria to convince them we were a friend. The left does not seem to be discouraged by failure to respond.

Recently, especially since Obama has been president, the conspiracy forces seem to be stronger on the left. The “9/11 truthers” are represented even in the administration. Jones, of course, was too nutty to represent a serious threat but it is suggestive.

Jones’s genius as an ideological entrepreneur was to mine white liberal anxiety — they are quite aware of their own NIMBY hypocrisy — by selling them the “green jobs” shtick to reconcile class/racial guilt with environmental enthusiasm, thus making them feel better about themselves.

That’s why Jones rose so far. That’s why he was such a “progressive” star. That’s why, as top Obama adviser Valerie Jarrett put it, “we’ve been watching him” and were so eager to recruit him to the White House.

In the White House no more. Why? He’s gone for one reason and one reason only. You can’t sign a petition demanding not one but four investigations of the charge that the Bush administration deliberately allowed Sept. 11, 2001 — i.e., collaborated in the worst massacre ever perpetrated on American soil — and be permitted in polite society, let alone have a high-level job in the White House.

He was “outed” and recently had a free lance reporter expelled from a “open to the public” meeting he was holding.

I read leftist blogs to find out what the other side is thinking. Here are some recent examples. In a post about the current struggle over the Bush tax rates, Steve Benen says:

There’s a reasonable case to be made that we’re looking at a cumulative effect. For much of the left, the concessions, many of which seemed wholly unnecessary, are just becoming intolerable. The party’s messaging, tactics, and inability to compromise effectively are just exasperating, and the apparent fact that Republicans will get an extension of a failed tax policy has led some to throw up their arms in disgust and proclaim, “I’ve had it.”

I get that. It’s a sentiment that obviously makes sense.

The Democrats are committed to static analysis of tax effects. A tax cut loses revenue while a tax increase adds revenue. Now why are the Democrats, who have large majorities in both houses of Congress, unable to block this Republican effort to keep tax rates the same? It can’t be good economic policy because Steve Benen said so. What could they do to convince Republicans the Democrat position is the better choice ? Here are some theories.

You’re sending the message the richest of the rich actually control this country, and in order to get a few crumbs for the common man, the rich need to be paid off with borrowed money – money that the common man (and woman), and their children, will be obligated to pay back, with interest. That does not bode well for the future of America.

Posted by: delNorte

So the rich and the corporations control the country. That is probably the most widely accepted conspiracy theory in the country. It is accepted by the left and many independents.

I think it’s a confluence of reasons: 1) It’s a simple issue with little to no nuance. There is no good reason to extend the cuts to the rich (outside of politics). 2) OTOH, the bank bailout and the fin reg are/were very complex issues which did not satisfy anyone’s sense of justice for holding responsible those to blame for the mess we’re in.

Posted by: You Don’t Say

Now, there is another theory. There is no reason to keep the tax rates the same for those with incomes over $250,000 except politics. Here is a person who does not believe that small business creates jobs. I doubt he would be impressed by this video. That business owner makes $300,000 and employes about ten people. Raise his taxes and what happens ? Who cares ?

There is absolutely NO convincing case that extending tax breaks for the super-wealthy is good for the nation; quite the reverse — it signals that the unabated looting of America is now in full swing;

Here’s more the same from another commenter.

What strikes me is there is no discussion of economics and how the economy works. OK. “Trickle Down” doesn’t work. “Tax cuts for the rich” doesn’t work. What does work ? Silence.

This morning, the This Week program on ABC, in its new incarnation with Christiane Amanpour, spent the entire show on DADT. They said not a word about the economy. DADT will not be repealed so why spend an hour on it two days after the unemployment rate went up again to 9/8% ? The political left is bored by economics and the national economy. They are far more interested in social issues like DADT or gay marriage. I can understand this because so many of them are government employees, or academic institution employees or low level employees of private organizations who have nothing to do with managing the business. They don’t know how private business is managed, they have never signed the front of a paycheck, and have no idea how people make decisions about investing because, aside from 401ks, they have no contact with it.

There was an amusing exchange about passports yesterday. It began with this:

Mayor Mike Bloomberg, leader of the Bloomberg faction of the Bloomberg party, was interviewed en route to China, where he was seeking to open diplomatic ties between Cathay and the colorful principality he governs. A quote: “If you look at the U.S., you look at who we’re electing to Congress, to the Senate — they can’t read. I’ll bet you a bunch of these people don’t have passports.”

Imagine that ! People who don’t have passports ! Anyway, the funniest part was a comment that the writer was being interviewed about tea parties by a German journalist. She asked him if he had a passport and he told her that he had lived in Germany as a child. I can’t find the link now and I wish he had asked her if she had ever owned a share of stock. Economic ignorance seems to be requirement for leftist credentials. Not only ignorance but disinterest.