America Isn’T A Corporation

[4588686]

[url="http://www.nytimes.com/2012/01/13/opinion/krugman-america-isnt-a-corporation.html?_r=1&ref=opinion#"]http://www.nytimes.c...=1&ref=opinion#[/url]

By Paul Krugman

[i]“And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A.”[/i]

[color=#000000][font=georgia,]That’s how the fictional Gordon Gekko finished his famous “Greed is good” speech in the 1987 film “Wall Street.” In the movie, Gekko got his comeuppance. But in real life, Gekkoism triumphed, and policy based on the notion that greed is good is a major reason why income has grown so much more rapidly for the richest 1 percent than for the middle class.[/font][/color]
[size=4][color=#000000]Today, however, let’s focus on the rest of that sentence, which compares America to a corporation. This, too, is an idea that has been widely accepted. And it’s the main plank of Mitt Romney’s case that he should be president: In effect, he is asserting that what we need to fix our ailing economy is someone who has been successful in business.[/color]
[color=#000000]In so doing, he has, of course, invited close scrutiny of his business career. And it turns out that there is at least a whiff of Gordon Gekko in his time at Bain Capital, a private equity firm; he was a buyer and seller of businesses, often to the detriment of their employees, rather than someone who ran companies for the long haul. (Also, when will he release his tax returns?) Nor has he helped his credibility by making untenable claims about his role as a “job creator.”[/color]
[color=#000000]But there’s a deeper problem in the whole notion that what this nation needs is a successful businessman as president: America is not, in fact, a corporation. Making good economic policy isn’t at all like maximizing corporate profits. And businessmen — even great businessmen — do not, in general, have any special insights into what it takes to achieve economic recovery.[/color]
[color=#000000]Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company.[/color]
[color=#000000]Most relevant for our current situation, however, is the point that even giant corporations sell the great bulk of what they produce to other people, not to their own employees — whereas even small countries sell most of what they produce to themselves, and big countries like America are overwhelmingly their own main customers.[/color]
[color=#000000]Yes, there’s a global economy. But six out of seven American workers are employed in service industries, which are largely insulated from international competition, and even our manufacturers sell much of their production to the domestic market.[/color]
[color=#000000]And the fact that we mostly sell to ourselves makes an enormous difference when you think about policy.[/color]
[color=#000000]Consider what happens when a business engages in ruthless cost-cutting. From the point of view of the firm’s owners (though not its workers), the more costs that are cut, the better. Any dollars taken off the cost side of the balance sheet are added to the bottom line.[/color]
[color=#000000]But the story is very different when a government slashes spending in the face of a depressed economy. Look at Greece, Spain, and Ireland, all of which have adopted harsh austerity policies. In each case, unemployment soared, because cuts in government spending mainly hit domestic producers. And, in each case, the reduction in budget deficits was much less than expected, because tax receipts fell as output and employment collapsed.[/color]
[color=#000000]Now, to be fair, being a career politician isn’t necessarily a better preparation for managing economic policy than being a businessman. But Mr. Romney is the one claiming that his career makes him especially suited for the presidency. Did I mention that the last businessman to live in the White House was a guy named Herbert Hoover? (Unless you count former President George W. Bush.)[/color]
[color=#000000]And there’s also the question of whether Mr. Romney understands the difference between running a business and managing an economy.[/color]
[color=#000000]Like many observers, I was somewhat startled by his latest defense of his record at Bain — namely, that he did the same thing the Obama administration did when it bailed out the auto industry, laying off workers in the process. One might think that Mr. Romney would rather not talk about a highly successful policy that just about everyone in the Republican Party, including him, denounced at the time.[/color]
[color=#000000]But what really struck me was how Mr. Romney characterized President Obama’s actions: “He did it to try to save the business.” No, he didn’t; he did it to save the industry, and thereby to save jobs that would otherwise have been lost, deepening America’s slump. Does Mr. Romney understand the distinction?[/color]
[color=#000000]America certainly needs better economic policies than it has right now — and while most of the blame for poor policies belongs to Republicans and their scorched-earth opposition to anything constructive, the president has made some important mistakes. But we’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.[/color][/size]

[Lil Red]

gah! tiny print! (which I'm fixing, btw)

[Laudate_Dominum]

Winchester hates Krugman.

[StMichael]

Anyone with a brain dislikes Krugman. Especially after his stating that the Arizona shooting was right wing. Deplorable human being.

[Amppax]

[quote name='StMichael' timestamp='1326486311' post='2368465']
Anyone with a brain dislikes Krugman. [color=#282828][font=helvetica, arial, sans-serif]Especially after his stating that the Arizona shooting was right wing. Deplorable human being. [/font][/color]
[/quote]

I think this is a pretty ridiculous statement. There are plenty of intelligent people who like what he says and agree with him. Just because you don't agree with him, and them, doesn't make them idiots. But it does make you look pretty foolish to say that.

And yes, his assumption that the Arizona shootings were right wing was wrong, and fairly unfair. But deplorable human being? I think that might be a little far.

Before you respond assuming I'm a Krugman fan, I'm not. I just don't like it when people assume people who disagrees with them are fools. Because that is foolish.

Edited January 13, 2012 by Amppax

[4588686]

[quote name='StMichael' timestamp='1326486311' post='2368465']
Deplorable human being.
[/quote]

[img]http://www.cartoonstock.com/lowres/jfa1723l.jpg[/img]

[Socrates]

[quote name='Laudate_Dominum' timestamp='1326480791' post='2368411']
Winchester hates Krugman.
[/quote]
Good to know Winnie's sane.

Btw, where the heck is Winchester? He's been MIA for some time now.

[Socrates]

[quote name='StMichael' timestamp='1326486311' post='2368465']
Anyone with a brain dislikes Krugman. Especially after his stating that the Arizona shooting was right wing. Deplorable human being.
[/quote]
Not to mention his economic ideas are the height of either idiocy or lunacy - I'm not sure which it is.


In Krugman's world, it would seem the main relevant experience to being a good president would be spending beyond-astronomical sums of borrowed money. Apparently 15 trillion in debt is still too miserly.

[Laudate_Dominum]

[quote name='Socrates' timestamp='1326499394' post='2368576']
Good to know Winnie's sane.

Btw, where the heck is Winchester? He's been MIA for some time now.
[/quote]
He must be chastised for failing to post on PM. I will make it so.

[StMichael]

Marxists like him. Statists love him. Only those groups would cite my comment or me as foolish.

But he is a deplorable human being who is clueless as to how a prosperous economy functions. And here is a hint, the government cannot provide prosperity it can only hinder it.

[quote name='Amppax' timestamp='1326492324' post='2368507']
I think this is a pretty ridiculous statement. There are plenty of intelligent people who like what he says and agree with him. Just because you don't agree with him, and them, doesn't make them idiots. But it does make you look pretty foolish to say that.

And yes, his assumption that the Arizona shootings were right wing was wrong, and fairly unfair. But deplorable human being? I think that might be a little far.

Before you respond assuming I'm a Krugman fan, I'm not. I just don't like it when people assume people who disagrees with them are fools. Because that is foolish.
[/quote]

[Amppax]

[quote name='StMichael' timestamp='1326573214' post='2369012']
Marxists like him. Statists love him. Only those groups would cite my comment or me as foolish.

But he is a deplorable human being who is clueless as to how a prosperous economy functions. And here is a hint, the government cannot provide prosperity it can only hinder it.
[/quote]

Thanks for assuming to tell me what you think I believe, I appreciate it. I'm in neither of the groups you mention, so there's that.

I think it is both arrogant and foolish to accuse those you disagree with lacking intelligence. I'm going to stick by that statement, regardless of the fact that I disagree with most of what Krugman says. I think Krugman is an arrogant windbag, but I don't think he's unintelligent.

[4588686]

[quote name='StMichael' timestamp='1326573214' post='2369012']
Marxists like him. Statists love him. Only those groups would cite my comment or me as foolish.

But he is a deplorable human being who is clueless as to how a prosperous economy functions. And here is a hint, the government cannot provide prosperity it can only hinder it.
[/quote]

Well, I'm viscerally opposed to Marxism. I'm a statist in the sense that I'm one of those radicals, like the Founding Fathers and the authors of the Constitution, who believes that states do exist and they are an efficient way of ordering human interactions. And I find your comments pretty foolish. Not the least because they reveal how ignorant of both mainstream economics and Marxist theory you are. Marxist would reject Krughman's analysis entirely as he does embrace the legitimacy of a Capitalist system.

[mod]Edited for personal attack -- ICP[/mod]

[StMichael]

My ignorance is far more in line with the founders than is your self professed intelligence.

The Founders did not create a framing for the statist. Power is from the, begins with and is for the individual, not the state nor central government.

The Modern Liberal believes in the supremacy of the state, thereby rejecting the principles of the Declaration and the order of the civil society, in whole or part. For the Modern Liberal, the individual’s imperfection and personal pursuits impede the objective of a utopian state. In this, Modern Liberalism promotes what French historian Alexis de Tocqueville described as a soft tyranny, which becomes increasingly more oppressive, potentially leading to a hard tyranny (some form of totalitarianism). As the word “liberal” is, in its classical meaning, the opposite of authoritarian, it is more accurate, therefore, to characterize the Modern Liberal as a Statist.

The Founders understood that the greatest threat to liberty is an all-powerful central government, where the few dictate to the many. They also knew that the rule of the mob would lead to anarchy and, in the end, despotism. During the Revolutionary War, the states more or less followed the Articles of Confederation, in which most governing authority remained with the states. After the war, as the Founders labored to establish a new nation, the defects with the Articles became increasingly apparent.

The central government did not have the ability to fund itself. Moreover, states were issuing their own currency, conducting their own foreign policy, and raising their own armies. Trade disputes among the states and with other countries were hampering commerce and threatening national prosperity.

Eventually the Articles were replaced with the Constitution, which granted the federal government enough authority to cultivate, promote, and “secure the Blessings of Liberty to ourselves and our Posterity,” but not enough authority to destroy it all. James Madison, the most influential of the Constitution’s authors, put it best when he wrote in “Federalist 51”:

But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.

For much of American history, the balance between governmental authority and individual liberty was understood and accepted. Federal power was confined to that which was specifically enumerated in the Constitution and no more. And that power was further limited, for it was dispersed among three federal branches—the legislative, executive, and judicial. Beyond that, the power remained with the states and ultimately the people.


[quote name='Hasan' timestamp='1326578977' post='2369092']
Well, I'm viscerally opposed to Marxism. I'm a statist in the sense that I'm one of those radicals, like the Founding Fathers and the authors of the Constitution, who believes that states do exist and they are an efficient way of ordering human interactions. And I find your comments pretty foolish. Not the least because they reveal how ignorant of both mainstream economics and Marxist theory you are. Marxist would reject Krughman's analysis entirely as he does embrace the legitimacy of a Capitalist system.

You are a despairingly ignorant person.
[/quote]

[Lilllabettt]

What's this "deplorable human being" thing? Does he kick dogs, hit babies, not break for squirrels, or something?

[Socrates]

[quote name='Hasan' timestamp='1326578977' post='2369092']
Well, I'm viscerally opposed to Marxism. I'm a statist in the sense that I'm one of those radicals, like the Founding Fathers and the authors of the Constitution, who believes that states do exist and they are an efficient way of ordering human interactions.
[/quote]
The Founding Fathers and the authors of the Constitution, who were fighting for limited government would be horrified by today's bloated and insatiably expanding federal government, which taxes, spends, and involves itself in every aspect of the life of its citizens far beyond the wildest dreams of His Majesty George III. The entire Bill of Rights places [i]limits[/i] on the power of the federal government, rather than granting it expanded powers.

Much less would they support the monstrous expansion of government power and spending advocated by Keynesians like Krugman. Alexander Hamilton, arguably the most "statist" of the founding fathers, adamantly believed that every penny of the national debt should be paid off.

Experience and common sense proves the state very ineffective at ordering economies.