Saturday, October 30, 2010

VP Biden's profound misunderstanding of innovation

"Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive. In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States ... No private enterprise would have done that for another 35 years." —Joe Biden, U.S. Vice President, 10/26/2010

Korea at night

46 Comments:

Anonymous Anonymous said...

This nonsense about innovation should be nominated for the most profound misunderstanding of history ever misconceived since Marx and Engle.

10/30/2010 4:55 PM  
Anonymous Anonymous said...

The government did not pay people $16,000 for every 40 miles of track they laid across the continental United States. Instead the government created bonds to finance a loan that had to be and was repaid by the railroads in full with interest, plus the government received a billion dollar windfall in the form of reduced transportation charges for the mail and military until the mid-twentieth century.

10/30/2010 5:11 PM  
Anonymous Anonymous said...

The privately financed Great Northern Railway was completed in 1893, twenty-four years (not 35 years) after the first transcontinental railroad was completed in 1869.

10/30/2010 5:18 PM  
Anonymous Anonymous said...

The first transcontinental railroad was the vision of Dr. Hartwell Carver and Asa Whitney, and the specific route actually built was the vision of Doc Strong and Theodore Judah, none of whom worked for the government.

Some counterexamples of innovation that has not required government vision or incentive include Nicola Tesla's invention of the polyphase AC electrical power that runs our economy, Thomas Edison's invention of the phonograph, incandescent lightbulb, and motion pictures, Alexander Graham Bell and Elisa Grey's invention of the telephone, Jef Raskin's creation of the Macintosh project at Apple Computer, Inc. Similarly for the laser, transistor, and microchips at places like Bell Labs and Intel.

Shame on you Joe Biden for such a stupid claim. Is this monumental ignorance or anti-free market propaganda? Not sure which is more frightening coming from the Vice President of the United States. Have you no clue as to the source of the wealth of nations, Mr. Biden? Hint: it is neither government vision nor government incentive.

10/30/2010 5:48 PM  
Anonymous Anonymous said...

[Rant] Cause for optimism:

A commentary on the radio today to expect years of malaise because there are no good options for the United States economic woes, only cutting health care for seniors, etc. misses the fundamental difference of what government does versus what the free market does. You can easily and quickly get vastly better results at much lower cost with no "cuts" or rationing by insurance companies or government panels needed.

Medical care and education, for example, because of government involvement, are less effective and enormously more expensive and wasteful than necessary. In a market economy, consumers are cost sensitive, weighing the tradeoff between cost and quality, as they are not now doing because we no longer have a free market. For example, neither cosmetic plastic surgery, nor LASIK eye surgery as an alternative to wearing glasses are covered by insurance. Because they are paid out-of-pocket by patients, their cost has not escalated as has occurred for care paid for by third party payers (a mistake that is an outgrowth of government wage controls during WW II).

Education and Medicine has been broken by the actions of governments, schools, and insurance companies. Parents and teachers will quickly fix education at huge cost savings because they are thrifty, if the interference with the market is removed; same with Medicine if patients and doctors can act freely. Consumers succeed where programs fail. The cost of education and medical care is perhaps 2-4x what it would cost to do a better job if only parents and patients were spending their own money. The ability to easily eliminate this huge wastefulness provides the opportunity to solve our problems. Trust farmers to grow food without being paid not to grow food, etc., etc. – they can do it! The critical thrift+quality mechanism that government and third party payers destroy is that the volume of purchasing decisions and the prices willingly paid and accepted by consumers and providers give the information required to optimize the economy according to the preferences of consumers. Meddle with that and growth slows because central planners (public or private) can't possibly have the necessary knowledge to correctly make the millions of decisions needed for innovation, quality, and efficiency.

Same with the financial woes. Government debasing of the currency, manipulation of interest rates, forcing banks to make ridiculous loans, Ponzi retirement plans, continuing and expanding programs that fail while guaranteeing private mistakes that should fail, sucking investment capital out of the economy as taxes, causing misinvestment due to regulations and endless tax complexities all can be instantly fixed by repealing all these unconstitutional laws and regulations, just as the German economy started to soar after WW II when Ludwig Erhard repealed all the rules over a weekend causing the "German economic miracle." Free markets work spectacularly well starting the instant that the misguided government meddling stops.

[continued below]

10/30/2010 5:57 PM  
Anonymous Anonymous said...

Why are people poor, uneducated, unemployed, etc.? It is because a hundred years ago, the 16th amendment, introduction of fiat currency, etc., grew the government and squandered vast amounts capital that was taxed and inflated out of private investment resulting in a slowing of economic growth and innovation compared to what would have been. Take away that enormous drag with a higher growth rate of the economy compounded over a century, and you see that all of the problems that the government claims it needs to solve, yet never does, would have long since disappeared, absent the ill advised government expansion. There would be no poor or homeless people by now had the income tax and fiat currency not been imposed and the wasteful government grown huge. With no taxes and programs to micromanage, politicians would not have any valuable influence to sell to lobbyists. Shut down all this waste, incompetence, corruption, and misallocation, stop letting government waste our income, let people make their own thrifty decisions, and all the mistakes and misallocations will quickly evaporate as the economy booms even more than it did in the roaring twenties when income taxes were halved to instantly fix the depression of 1920. The easy choice is a quick wild ride while a century of mistakes are swept away in a wave of creative destruction, and quick sharp corrections of excesses periodically thereafter, or endless poverty and misery on the road to serfdom.

Lots of people now understand this, but the media and academia are so hostile to free markets that most everyone is either confused or too intimidated to speak the truth and to act boldly. As someone with a microphone, you play a critical role, so please understand and explain the power of the market, especially now to help the politicians who will be elected next week not to be so timid that they miss the chance to fix what ails us. It is dawning on folks that the ever growing cost of government is a very bad deal. Getting rid of income taxes permanently (replaced by nothing) and dramatically shrinking government to its enumerated constitutional powers, so that you can keep all your money in exchange for eliminating most of what government tries to do but fails miserably, is a deal that keeps looking better and better. Healthcare and education, for example, will as a result rapidly become dramatically better and less costly because we can trust teachers, parents, doctors, and patients who all know what to do, if just given the choice; bureaucrats and politicians need not apply.

It can be done – it has been done before and is not even hard. To varying degrees, New Zealand did it, Estonia did, Hong Kong did, as did the U.S. under Harding, Coolidge, Kennedy, and Reagan. Now it's time for even more dramatic change that amounts to nothing more than recreating the constitutional republic with limited government that the founding fathers carefully crafted, but which has been largely abandoned in stages over the past century. We've already got the best country in the history of the world, so lets just use it as designed, and stop trying to morph the United States into already discredited forms of government that both WW II and the cold war conclusively showed just don't work.

10/30/2010 5:58 PM  
Anonymous Anonymous said...

Do the math: If a century of progressivism (i.e., liberalism also called "progress", "moving forward", or "big government") had not slowed economic growth, everyone would be dramatically more wealthy. For example, if economic growth (of the gross domestic product) has been slowed for a century by as little as 2 1/2% by regulating, taxing, and spending then we all should already be ten times richer than we actually are now. Do you seriously think there would still be poor people in need of government programs if we were all ten times as rich?The real way to "help the poor" is to make them rich! – not to keep them down by government sucking the life blood out of the economy.

11/26/2010 1:47 PM  
Blogger CPRR Discussion Group said...

See additional comments about the mistaken idea of "robber barons."

12/19/2010 2:22 AM  
Anonymous Anonymous said...

" ... A low rate flat tax, spending controls, turning all those programs into defined contribution plans, privatizing all of these assets, selling off Fannie May, Freddie Mac, selling off GM, selling off Chrysler, selling off AIG – you can bring the fiscal situation back into control pretty quickly. You'll get such economic growth that you'll have huge increases in revenue. We can really change America and make it back into the dream that we all really hope that it will be. We can do that." Arthur Laffer

12/25/2010 12:12 AM  
Anonymous Anonymous said...

"If Supermarkets Were Like Public Schools: What if groceries were paid for by taxes, and you were assigned a store based on where you live?" from the Wall Street Journal

5/05/2011 1:17 PM  
Anonymous Anonymous said...

Barack Obama’s pants on fire: President told us a whopper about his mother’s health care
by Milton R. Wolf, M.D.

7/24/2011 10:36 AM  
Anonymous Anonymous said...

See related article, Who makes things happen around here?: Some think it's government; They couldn't be more wrong, by JASON LEWIS.

P.S. Errata: The Central Pacific Railroad never went bankrupt and repaid its loans in full with interest.

9/03/2011 1:59 PM  
Anonymous Anonymous said...

Another breathtakingly wrong world view:

"There is nobody in this country that got rich on his own. You build a factory out there; Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate." —Elizabeth Warren, Harvard University

Professor Warren is claiming that the wealthy who build factories are dependent on government provided infrastructure, while foolishly failing to realize that the same rich folks also disproportionately pay for the cost of government, i.e., pay for the roads and the education.

At the same time she is missing Adam Smith's fundamental point that the wealth of nations arises from specialization (i.e., not trying to do it all yourself) which is more economically efficient.

So she completely misunderstands the significance of the example of specialization she gives, i.e., of building a particular factory, while having others also specialize to do transportation, education, and all the innumerable other supporting tasks.

Professor Warren is wrong about who pays while failing to understand that she is actually illustrating what makes a market economy work (and is undermined by inefficient government wasting vast sums of money doing a poor job of providing infrastructure and education, for example).

10/28/2011 9:55 PM  
Anonymous Anonymous said...

Professor Warren is also fundamentally wrong because when she says "get rich on his own" she is ignoring that the factory owner pays for all the inputs to operate the factory.

After paying for the design and the building and the machines and all the raw materials and paying the salaries of all the workers, the factory owner does own any profit or loss that remains.

If a thief gets to steal the profits, as apparently Dr. Warren thinks is justified, there is no reason for the factory owner to risk her capital to build the factory, to the detriment of the people who would lose their jobs if Dr. Warren's wrongheaded ideas are put into practice.

10/29/2011 12:05 PM  
Anonymous Anonymous said...

Dr. Warren also fails to properly identify that the "nobody in this country that ... build[s] a factory" probably is you, i.e., through your mutual fund, pension, or 401(k) retirement savings.

So she is actually advocating looting the savings that you were depending on to send your kids to college and to fund your retirement.

10/29/2011 12:14 PM  
Anonymous Anonymous said...

How's this for a shocking statistic: According to the FBI, in 2010 there were 12,966 murders in the United States, 50.4% of murder victims were black, and 93% of black murder victims were killed by blacks.

3/30/2012 10:05 PM  
Anonymous Anonymous said...

"We want to create a ... Global Minimum Tax." -Vice President Biden

4/11/2012 8:43 AM  
Anonymous Anonymous said...

Putting people so radical and incompetent in power is how to wreck a country.

4/11/2012 9:27 AM  
Anonymous Anonymous said...

See the video If I wanted America to fail.

5/05/2012 11:39 AM  
Anonymous Anonymous said...

See related article, The 99% Movement Scorns American Creativity.

5/26/2012 9:23 PM  
Anonymous Anonymous said...

"If small-business people say they made it on their own, all they are saying is that nobody else worked seven days a week in their place. Nobody showed up in their place to open the door at 5 in the morning. Nobody did their thinking, and worrying, and sweating for them. After all that work, and in a bad economy, it sure doesn't help to hear from their president that government gets the credit. What they deserve to hear is the truth: Yes, you did build that." —Paul Ryan

9/03/2012 8:36 AM  
Anonymous Anonymous said...

"At the University of Chicago Laboratory Schools, where Rahm Emanuel sends his three children, a full day program for nursery school to grade 5 is $23,526 annually -- $25,326 for grades 6-8. President Barack Obama's daughters also attended "the Lab Schools" when they lived in Chicago."

9/13/2012 3:05 PM  
Anonymous Anonymous said...

"Half of Americans would rather be equal in economic poverty than unequal in economic freedom." —Anonymous

9/21/2012 10:52 AM  
Anonymous Anonymous said...

" ... the middle class has been buried the last four years." —Vice President, Joe Biden, 2012, after almost four years in office

10/03/2012 12:39 PM  
Blogger CPRR Discussion Group said...

It is absolutely incredible what free people can accomplish when not encumbered by stifling bureaucracy.

For example, the Empire State Building was designed in two weeks, built in 410 days, 3 months ahead of schedule, and cost only $24.7 million, 43% under budget!

10/05/2012 11:26 AM  
Anonymous Anonymous said...

"Obama and Biden want to raise taxes by a trillion dollars. – Guess what? Yes we do!" —Joe Biden

10/05/2012 11:31 PM  
Anonymous Anonymous said...

From June, 2009 to September, 2012, 72% of jobs were created in 22 right to work states [where Union membership is not compulsory] with only 40% of the U.S. population. —According to a study quoted by Lou Dobbs

11/13/2012 5:15 PM  
Anonymous Anonymous said...

The finding that the "Wealth of [the] 85 richest people [is] equal to that of poorest 3.5bn" is great cause for optimism. Only eighty-five people, such a small number, can't possibly all together be spending very much on luxury consumption, which almost certainly means that almost all of that "concentrated" wealth is actually being productively invested for the benefit of the rest of us (either temporarily as stocks and bonds, etc., or permanently as charity). Furthermore, it means that the rest of us need to examine what only 85 people are doing right to be so incredibly successful in order to help replicate the success. This seems like a much easier research project than if a much larger group of individuals needed to be studied to learn what productive characteristics, actions, and strategies are most effective. It's also great news that those few individuals are actually able to keep this wealth intact for our benefit and can largely prevent wasteful tax and spent governments from squandering this huge wealth that is benefiting all of us through productive investment and innovation that continues to raise the standard of living for everyone.

1/20/2014 10:31 PM  
Anonymous Anonymous said...

Speaking of wealth and poverty — How to retire early – 35 years early: Here is one guy that seems to have figured it out.

1/20/2014 10:49 PM  
Anonymous Anonymous said...

"This is a big f***ing deal." —Vice President Biden wisper to President Obama during the signing of the Obamacare law.

1/25/2014 8:30 PM  
Anonymous Anonymous said...

The Real Reason College Tuition Costs So Much

Huge increase in government funding of college education has legions of overpaid administrators wasting all the extra money intended for students (and then some) and lying about what has happened to tuition prices, while faculty salaries slump and students/parents are gouged and saddled with debt. (At least that's what I think the article said. Check for yourself.)

4/08/2015 4:24 PM  
Anonymous Anonymous said...

"Here's what has to happen: You have to eradicate the American ghetto. How to you do that? You have to shrink the size of the underclass. We're seeing underclass behaviors on display. We have a permanent underclass in the United States become comfortable with ghetto life. How do we get them out of that comfort zone? ... You go after modern liberalism. Modern liberalism is conduct without borders. It celebrates black underachievement; it makes excuses for this abhorrent behavior that we're seeing in many neighborhoods; it blames others for questionable lifestyle choices like school failure, having kids out of wedlock, not staying constantly employed. So I would start by attacking modern liberalism. Start to shame these behaviors, instead of celebrating them. Make it uncomfortable and then you'll see the underclass behavior start to shrink." —Sheriff David Clarke, Milwaukee County, Wisconsin, 5/28/2015

5/27/2015 10:55 PM  
Anonymous Anonymous said...

Federal sentencing crime statistics:

Illegal Immigrants represent only 3.5% of the United States population but commit 36.7% of the crimes and 12% of the murders.

(U.S. Sentencing Commission, fiscal year 2014.)

7/08/2015 6:21 PM  
Anonymous Anonymous said...

In a new low for civilization, Pope Francis ignorantly described unfettered capitalism as “the dung of the devil,” while utterly failing to understand that, to the contrary, billions of people have been lifted out of poverty and misery, to achieve much better and longer lives than ever before in history by the emergence around the world of market economies where innumerable price sensitive voluntary transactions allow consumers the freedom to direct production according to each person's preferences.

7/14/2015 6:13 PM  
Anonymous Anonymous said...

After his embarrassingly foolish comments about capitalism, asked about economics by journalists, Pope Francis admitted "I don’t understand it very well." No kidding.

7/14/2015 7:13 PM  
Anonymous Anonymous said...

"The only way that you can reduce poverty and increase opportunity is economic growth. That's it! The government can't do it. You need economic growth. And there is one system in the history of the world that produces enough economic growth to meaningfully reduce poverty and meaningfully increase opportunity and that is free market capitalism." —Andy Puzder, CEO of Carl's Jr. and Hardee's

7/18/2015 7:41 PM  
Anonymous Anonymous said...

"Our public school system has destroyed black lives not in the ones and twos, but in whole generations." —Ben Carson, M.D.

8/24/2015 9:09 PM  
Anonymous Anonymous said...

"The Fed is beginning to recognize that 6 years of zero bound interest rates have negative influences on the real economy – it destroys historical business models essential to capitalism such as pension funds, insurance companies, and the willingness to save money itself." —Bill Gross

9/03/2015 1:22 PM  
Anonymous Anonymous said...

Illustrating the huge expense caused by government meddling in health care and education which has prevented the free market from functioning (and the huge cost savings opportunities if this is reverse by instead putting patients and parents in charge of the spending), from 1980 to 2009, inflation rose by 160%, while the cost of health care increased by 400%, and college tuition rose 750%!

1/23/2016 1:10 PM  
Anonymous Anonymous said...

See economic myths.

1/23/2016 1:16 PM  
Anonymous Anonymous said...

See the excellent book, Economics in One Lesson by Henry Hazlitt which is now available online.

2/13/2016 12:48 PM  
Anonymous Anonymous said...

" ... gang leaders who got 13-year-old kids hopped up on crack, and sent them out in the streets to murder other African-American children ... You are defending the people who kill the lives you say matter. Tell the truth. You are defending the people who cause young people to go out and take guns." —President Bill Clinton to "Black Lives Matter" hecklers

4/08/2016 10:55 AM  
Anonymous Anonymous said...

"Officers are at much greater risk from blacks than unarmed blacks are from the police. Over the last decade, an officer’s chance of getting killed by a black has been 18.5 times higher than the chance of an unarmed black getting killed by a cop." Heather Mac Donald, "The Danger of the 'Black Lives Matter' Movement"

5/18/2016 12:17 PM  
Anonymous Anonymous said...

"That's a pet peeve of mine – people who have been successful and don't realize they've been lucky. ... it wasn't nothing you did." —Barack Hussein Obama, II

5/23/2016 4:18 PM  
Anonymous Anonymous said...

"The minimum wage arose in the early 20th century as a Progressive policy designed to screw low-wage workers. Designed."

6/12/2016 6:12 PM  
Anonymous Anonymous said...

"It's over. ... God Save the Queen." —Vice President Joseph Biden, concluding the House of Representatives Certification of the election of Donald J. Trump as President of the United States

1/07/2017 2:13 PM  

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