A Quick Question

by Don Boudreaux on September 25, 2011

in Hubris and humility, Politics

Here’s a quick question for anyone who takes seriously politicians’ pronouncements about what particular industries are “vital” or are “of the future” or are “crucial to meeting consumers’ needs”: Why do virtually none of these politicians, when they leave office, found their own non-political firms? Why do virtually none of these politicians, when they leave office, found their own non-political firms – firms that specialize neither in granting clients access to incumbent politicians nor in projects that depend upon getting subsidies or other favors from those same politicians?

This question occurred to me a few days ago upon hearing that former president Bill Clinton was off somewhere talking about something to some group concerned about some issue.  His career now is to make lots of money as a sort of high-brow social healer – to emit platitudes, attend state funerals, and (pardon my switch of imagery) be a show-pony for politically correct causes.  The post-Oval Office careers of every other recent president – to the extent that they haven’t simply retired to the golf course or the study – have been largely the same, with the groups and causes served by their attentions differing only as one former president’s political affiliations differ from those of another former president.

But surely if, say, President Jimmy Carter was as smart and as full of correct foresight as he would have had to be in order for sensible people to take seriously his late-1970s pronouncements on the future of America’s energy economy, he could have made a personal fortune, starting at 12:01pm on 20 January 1981, launching and running an energy company (or, more precisely, a synthetic-energy company).  Yet he didn’t even try.  He selfishly denied to Americans – indeed, to the world – the blessings of synfuels.

Sure, he did other things.  Built houses for poor people.  Visited foreign leaders.  But does the value that Mr. Carter supplied to the world through these deeds come close to the value that Mr. Carter would have supplied had he actually founded and successfully run a company producing ‘alternative’ energy?  Doubtful.

And what of Pres. Obama?  Even if he wins a second term in the White House, he’ll be only 55 years old when he leaves office.  Will he found and run a health-insurance company?  How about a ‘green’ energy firm?  Or will he, perhaps, found and run a firm specializing in offering middle- and low-income Americans better and more fully disclosed access to consumer credit?  Will he create a successful automobile firm?

I’ll bet (seriously) a good deal of money that he’ll do none of these things.  He’ll not even try.  And for good reason: not only does he know nothing about these matters, he knows nothing about finding investors willing to stake their own funds, or about finding skilled workers and managers willing to cooperate together in such upstart enterprises, so that such enterprises become realities with real prospects for success.

He knows no more about the economic matters upon which he pronounces than does a soap-opera actor portraying a physician know about cardiology or obstetrics.

His comparative advantage is as a talking show-pony, to trot out onto the public stage to mouth platitudes, to declaim the splendid ideas of his party, to decry the squalid ideas of the opposing party, and, after he is relieved of the burdens of office, to make millions so that people destitute of critical faculties can get cheap thrills – for which they’ll pay big bucks – by sitting for a few minutes in the same room as a former president of the executive branch of the United States government.

And it will never dawn on any of these people who Oooo! and Ahhh! in the presence of a former president that if that mortal, who once sat at the big desk in the Oval Office, were really as magnificent and wonderful and smart and wise and productively creative as he and his handlers and party apologists made him out to be while he was in office, he is now nothing but a bum wasting his remarkable talents that could be used to found and operate a private firm (or multiple firms!) that actually puts to a genuine market test the ‘big’ ideas in which he expressed such assurance while spending other people’s money.

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{ 194 comments }

vidyohs September 25, 2011 at 12:59 pm

I may disagree with you on minor details once in awhile; but, in this I am 100% in agreement. Thanks for broaching the subject by pointing out a serious truth.

vidyohs September 25, 2011 at 1:05 pm

That being said, I believe that retiring presidents, as ultimate politicians, have all discovered what I did when I was division training and career counselor back in 1968. That was that it is very good career move to appear to care, to appear to be doing something, enough so that actually doing something is the last thing one would want to do…..too much risk in actually doing something.

Rob September 25, 2011 at 4:34 pm

Eh….more a matter of opportunity costs. If ex-Presidents can make big bucks doing the meager things that Don described, why would they not? I mean, if you could earn a living that way, wouldn’t you?

vikingvista September 25, 2011 at 5:58 pm

If they are such business geniuses, why is that the way they are able to make the most money?

Rob September 25, 2011 at 8:46 pm

Dude…be realistic….because it does. If you want to live by Don’t fantasy, so be it. But let’s face it, starting a business requires more work than does giving speeches no matter how smart you are or claim to be.

vikingvista September 25, 2011 at 9:56 pm

Rob,

You keep missing Don’s point. He admits that it does. The fact that it does tells you *what* about their true business acumen in comparison to the business acumen implied by their grand coercive political schemes for business?

Mitch September 25, 2011 at 1:09 pm

Al Gore? Well there are always exceptions, I suppose we should caveat it with politicians who do business with out cronyism.

Don Boudreaux September 25, 2011 at 1:14 pm

Fair point – yes, firms whose success depends upon persuading private investors to put up their own funds and upon consumers voluntarily buying the product(s) at prices that make the firm profitable.

Krishnan September 25, 2011 at 1:25 pm

I seriously doubt Gore risking any of his own monies – ever. We have seen how he has unravelled recently – His modus operandi has been to get appointed to boards of venture firms, become a lobbyist and persuade a few to put THEIR money so he can increase his own wealth …

Has there been ANY politician has become poorer as a result of leaving Government?

jcpederson September 27, 2011 at 12:30 pm

I read that Grant was rather on hard times after leaving office, and his friend Samuel Clemens persuaded him to write his memoirs.

Dan H September 27, 2011 at 12:36 pm

I had no idea Huckleberry Finn was an autobiographical piece! Why wasn’t N-word Jim in Grant’s cabinet?

vidyohs September 25, 2011 at 4:30 pm

I think that it is a stretch to say that Gore produced anything of value to mankind. To call his propaganda film a value one has to view the subject matter as Gore does. Many of us do not.

Gore is a hustler, a huckster, whose self promotion is blatant; but, I see no reason to expect otherwise from him since he grew up in a 100% politically charged atmosphere.

Rob September 25, 2011 at 4:35 pm

But this is sort of a matter of opinion. Lots of companies are in the business of creating products that I do not care for and would never buy, but who am I to say that they should not do it. Because you don’t agree with Gore does not undercut the fact that he is doing something.

SweetLiberty September 25, 2011 at 5:16 pm

But if the something Al Gore is doing is based on intentional misinformation and fraud, then it goes beyond just a company you choose not to purchase their products from. Especially when Gore’s political connections can force his ideas and products down our throats.

g-dub September 25, 2011 at 6:19 pm

But this is sort of a matter of opinion.

I’d want evidence that he’d ever put up an honestly earned dollar of his own.

Yet he still lobbies for government to force behavior. That is not a matter of opinion expressed through a price system (market behavior — people putting their own money where their mouth is). Gore only knows how to destroy or distort the price system. He made a career of it. It is all he really knows.

Mitch September 25, 2011 at 8:42 pm

I think it is stretch to say the gin distiller has any value to mankind. Yet they still produce. It does not matter what you think is of value, it matters that people produce and buy it.

What I object to is the unjust use of regulation of the government. Al Gore does push this, so thus my suggested caveat.

Al Gore has convinced many to buy into his green business. Fine. So long as that remains voluntary, we should hardly object.

Methinks1776 September 25, 2011 at 9:12 pm

I think it is stretch to say the gin distiller has any value to mankind.

Oh I beg to differ!!! :)

Al Gore has convinced many people to buy into his business only because he has convinced them that he will be able to extract rents. He seeks to create a market and a profit for his company through the use of government force. This extraction of rents is the problem, not the voluntary investment of fools.

Mitch September 25, 2011 at 10:52 pm

Hmmm I should have wrote scotch. I rather like gin. But the taste of burnt sod? No thank you.

g-dub September 26, 2011 at 3:09 pm

Hmmm I should have wrote scotch

You’d be even more wrong! :)

Economic Freedom September 26, 2011 at 10:40 pm

@ Mitch

You’re surrounded, Mitch. You’re flanked by Methinks1776 and gin on your left, g-dub and scotch on your right –

– and I’m comin’-at-ya’ front and center with vodka.

Dan J September 27, 2011 at 12:46 am

So long as the investments are voluntary…… There would unlikely be the voluntary investments without the govt securing the investors risks.
Solyndra- govt secured the investors money and stuck taxpayers with the losses.
Al Gore has sold investors on govt going in full throttle. If that falls thru (god willing), I expect that Al Gore will go into hiding.

Make a gin distiller. So long as there is no taxpayer contributions via govt confiscating and then doling out.

Greg Webb September 25, 2011 at 1:17 pm

Why do virtually none of these politicians, when they leave office, found their own non-political firms?

Because they know that their politically-correct ideas are always wrong economically. That is why they call those ideas “politically correct.” If they were really correct, there would be no need to use the word “politically.”

Steve_0 September 25, 2011 at 2:12 pm

Nice.

Darren September 26, 2011 at 2:31 pm

So they are fulfilling a need, to provide emotional support and rationale to others with politically correct ideas and help them maintain their fantasies.

David September 25, 2011 at 1:19 pm

I have no love for Al Gore, but he did do exactly what you are saying politicians don’t do. He hit the road with his powerpoint presentation, picked up a Nobel prize, has his hands in all sorts of cookie jars on the green energy front, and obviously has the ear of many venture capitalists and even Apple, hardly a company looking for government handouts. That seems like a fundamentally different model than the typical Senator walks across the street to the law firm / lobbyist route that most of these guys seem to take.

All that said, I’m not sure why you should cast dispersions on Clinton for being Clinton. He is absolutely great at what he does.

Steve_0 September 25, 2011 at 2:16 pm

“Has his hands in all sorts of cookie jars”. You nailed it.

What profit making business did Al Gore start? Nobel prizes don’t come from customers. I’ve got PowerPoint here on my computer. Whooptie-doo. Al Gore, to my knowledge, has only founded a failing television station, and was involved slightly in a failed radio network.

Did he found Apple, or even offer any substantive market advantage to them? No. Those “green companies” and Apple use Gore merely as a shiny bauble, exactly as Don points out here.

Also, let me repeat myself on the “green” point. Every company that is even slightly connected to the price mechanism is a “green” company.

Pfloyd September 25, 2011 at 2:25 pm

Indeed, Gore is less and example of “putting his money where his mouth is” and has instead worked at putting his mouth where the money is.

Chucklehead September 25, 2011 at 2:42 pm

You nailed it.

Rob September 25, 2011 at 4:36 pm

Semantics

g-dub September 25, 2011 at 9:25 pm

No.

DAB September 27, 2011 at 12:59 pm

Nice!

Mesa Econoguy September 25, 2011 at 2:30 pm

Just to add on, Gore may have started quasi-private (his clout arose from 100% public sector experience, he has no other experience), but his endeavor has oozed well back into the public sector, not only creating the alarmist industry, but utilizing legislative avenues to literally force his agenda on the public.

Chucklehead September 25, 2011 at 3:10 pm

Has anyone been a bigger rent seeker than Al? He makes ADM look like pikers.

Methinks1776 September 25, 2011 at 5:38 pm

Warren Buffet and T-Boone Pickens come to mind as just two examples. I don’t know if they’re bigger, but Warren is pretty damn big.

JoshINHB September 25, 2011 at 8:21 pm

As big a rent seeker as Buffet is, he is also involved in businesses that serve customers and face competition in markets.

Al Gore, not so much.

Methinks1776 September 25, 2011 at 9:13 pm

I would be fine with Warren if he didn’t also seek rents. We agree on the Goracle.

Scott September 26, 2011 at 7:43 am

Is the definition of rent seeker a rich person who you disagree with? Why is Warren Buffet a rent seeker? At least to any degree that should separate him from every wealthy person? He gets really sweet deals from firms but in lots of cases, no one is forcing them to do that. And many of his businesses are just wonderful, Mouser comes to mind. Most firms that buy lots of businesses ruin them, his doesn’t seem to suffer from this disease.

Methinks1776 September 26, 2011 at 7:59 am

I’ll give you two rent seeking examples:

Warren “saved” Goldman by negotiating a deal for new preferred equity with a super high interest rate and an in the money options. I have no problem with that. However, right after he did that, Warren became a champion of TARP. Bailing out Goldman ensured his enormous profits on his trade. He went all out to demand a wealth transfer from your pocket to his. This is not a problem for you?

Warren is all for higher taxes on higher earners. He owns insurance companies that benefit when taxes are higher by selling tax advantaged products to high earners seeking to shelter their investment income. He, a billionaire who has spent a career employing an army of lawyers and accountants to avoid paying an extra penny of taxes, wants to raise taxes on people much poorer than he so that he can corral them into buying products he sells.

I don’t give a damn about his sweet deals. I do give a damn when he uses government to extract rents from us.

HaywoodU September 26, 2011 at 8:02 am

GE? Or should I say Mr. Immelt.

Methinks1776 September 26, 2011 at 8:06 am

Scott,

It seems that Warren and I actually agree on taxes. He reveals his preference for lower taxes through his actions. Like all guileful hypocrites his mouth is disconnected from his actions.

Scott September 26, 2011 at 8:09 am

Well, there is a reason he gave his money to Goldman. They are an incredibly solid firm. It is pretty doubtful they would have gone under, even w/o Tarp. The stuff about Taxes is his opinion not matching his self-interest. I don’t really know what you are talking about on the insurance stuff, are you saying there wouldn’t be a market for the insurance without the government that would probably count but I think would be as speculative as the Sachs deal.
None of this really sounds like rent seeking at some level that is much greater than every businessmen I can think of.

Methinks1776 September 26, 2011 at 10:58 am

Scott,

In 2008 Goldman was on the verge of bankruptcy. It was anything but solid. If it were, it wouldn’t have needed to apply to become a commercial bank, needed TARP or agreed to the shit deal (from Goldman’s perspective) Warren offered it.

The “stuff about taxes” is absolutely his opinion matching his self-interest. He’s a liar.

If you have a thing for Warren and don’t understand what he’s doing or that his influence and ability to seek rent is greater than some guy with a small company, then I can’t help you. You asked me a question and I answered it. I can’t make you understand it.

Anotherphil September 26, 2011 at 10:36 pm

Gore is a politician with sort of capitalist ambititions.

Buffett is a well-regarded (well less so but) capitalist with political aspirations.

Both are opinionated paroxysms in the posterior.

Dan J September 27, 2011 at 12:50 am

T-Boone Pickens abandoned his Windmills across America when he had seen that he wasn’t going to get the subsidies he wanted.

Dan J September 27, 2011 at 12:57 am

The BofA investment. He gets a tax savings. Since the money used to invest in BofA is capital gains, he turns to another inestment and the Cap gains rule means he pays taxes on a portion of gains made from it. He got rich on gaming the system. You better believe any support for higher taxes is to his benefit of making more money.

Invisible Backhand September 25, 2011 at 7:10 pm

Becoming a climate ‘alarmist’ for fame and fortune is like becoming a trappist monk for the sex and drugs. The actual ‘industry’ part is on the denial side. But I suspect you get all your information from Foxnews. I hope as a bond trader or whatever it was you had better research skills.

He is a founder and current chair of the Alliance for Climate Protection, the co-founder and chair of Generation Investment Management, the co-founder and chair of Current TV, a member of the Board of Directors of Apple Inc., and a senior adviser to Google. Gore is also a partner in the venture capital firm, Kleiner Perkins Caufield & Byers, heading that firm’s climate change solutions group. He has served as a visiting professor at Middle Tennessee State University, Columbia University Graduate School of Journalism, Fisk University, and the University of California, Los Angeles.”

Gore also began to work the night shift for The Tennessean as an investigative reporter in 1971. His investigations of corruption among members of Nashville’s Metro Council resulted in the arrest and prosecution of two councilmen for separate offenses.

Fearsome Tycoon September 26, 2011 at 3:45 pm

“Becoming a climate ‘alarmist’ for fame and fortune is like becoming a trappist monk for the sex and drugs.”

Algore’s twin mansions and private jet say otherwise.

Anotherphil September 26, 2011 at 10:39 pm

“Algore’s twin mansions and private jet say otherwise.”

Oh but he bought carbon offsets, to sanitize his hedonism, right?

DAB September 27, 2011 at 1:03 pm

“Oh but he bought carbon offsets, to sanitize his hedonism, right?”

Ha! Right. I think Luther used to call those “indulgences”. :)

Economic Freedom September 26, 2011 at 10:51 pm

Becoming a climate ‘alarmist’ for fame and fortune is like becoming a trappist monk for the sex and drugs.

Unless, of course, the climate crank is Al Gore and the monk is Rasputin.

Krishnan September 25, 2011 at 1:21 pm

This should appear as an OpEd in the WSJ … Better yet, send it to the NYT or WaPo and see them reject it … I cannot imagine the NYT or WaPo being exposed to such painful truths

Seth September 25, 2011 at 1:40 pm

Nice post.

Whenever I stumble into the ‘gov’t must do this or that because private efforts just aren’t enough’ discussion with someone, I first like to ask if they feel strongly about this or that. “Oh yes, of course.”

Then I ask if they have ever researched private efforts that do this or that and if they’ve ever volunteered or donated their own time to helping out this or that.

Whatever is said after that can be summed up, “Of course not.”

Don September 25, 2011 at 2:06 pm

Amen!!

Preach it, Brother!

Steve C. September 25, 2011 at 2:35 pm

What do you do with a President, when he stops being a President?

Historically they became Elder Statesmen. In the post Nixon era they have embarked on second careers. Personally, I’d prefer them to retire to some obscure place, write their memoirs and keep their opinions to themselves. We pay them a pretty nice pension and allowance, plus fund their “monuments to ME”. That should buy us a modicum of silence.

Chucklehead September 25, 2011 at 3:12 pm

Out to pasture, except Clinton, out to stud.

Sam Grove September 25, 2011 at 2:51 pm

This has something to do with how annoying the charge these fiat economists make against free market advocates, that their ideas are too ‘simplistic’, and yet their whole approach to perceived problems in the world should be in dictionaries as an example of “simplistic”, as in:

simplistic: collectivist economics

Miko September 25, 2011 at 3:15 pm

“He selfishly denied to Americans – indeed, to the world – the blessings of synfuels.”

Quite true, but so what? He had enough money and so he decided to spend his retirement from the presidency doing things that he enjoyed rather than things that would primarily benefit you. Surely he should be expected to base his actions on satisfying his own desires rather than on satisfying yours.

Sam Grove September 25, 2011 at 3:19 pm

Do you perceive any sarcasm in Don’s commentary?

I do.

Gil September 25, 2011 at 10:17 pm

I thought the premise is that they can do what they want but not at taxpayers’ expense.

Krishnan September 25, 2011 at 3:41 pm

How about this for a reason?

“As President (or VP or Senator or …) I got to understand our economy and how vital and strong our private sector was. I got to meet titans of industry who told me how they grew their companies and created wealth for their share holders. As President (VP/Senator/??) I also got to know a great deal about how our economy grew and where the opportunities are … After all, remember that it was easy for me to call up the Chairman of the Fed or any Federal Agency and get information I wanted. So, yea, I could have jumped into the private sector and knew that I could convince investors to support me in my ideas and could have made a ton of money – more than I could as an elder statesman. I was concerned as to what people may think that I used my office as President/Senator/dog catcher/ to increase my personal net worth.

You ask – “You are making millions anyway – and are now richer than ever” What is different you ask?

Well, I am working for the public good and not for personal profit – so yea, I do make money, but it is incidental – it is not why I do what I do.

I live for Public Service and the public seems to want to compensate me so well”

OK – now we can all throw up …

MarketJohnson September 25, 2011 at 3:43 pm

Because as a President (especially a Democrat), there will always be people who are wealthy enough and hate your politics enough to not only avoid investing in any idea you have, no matter how profitable, when they can invest in other things and most likely be just as well off, but possibly even invest in rival technologies/companies to intentionally hurt your own company.

This doesn’t explain it all, naturally. There are huge personal incentives to go on the speaking circuit (money, ease of work, free time), not to mention the level of serendipity required for a business venture to outweigh the gains of said speaking circuit. But the idea that Presidents are just a bunch of morons who couldn’t run a liquor store profitably, like some of the other posts have suggested, is ludicrous, even in the case of those as dim as Bush II.

What really surprises me is why someone who clearly has every aspect of the empirical and social science known as economics mastered would sacrifice the huge personal benefits of using that mastery in public service to teach at a public university and blog in his free time. It’s amazing how quickly the world of economics forgets that money isn’t the only driving force in people’s lives (although those with a lot of it are certainly trying their hardest to make it that way; hooray consumerism).

g-dub September 25, 2011 at 5:04 pm

MarketJohnson> There are huge personal incentives to go on the speaking circuit (money, ease of work, free time), not to mention the level of serendipity required for a business venture to outweigh the gains of said speaking circuit.

Just to take off on this, some presidents talk about “shared sacrifice,” which I suspects means something like the altruism of not being “self interested.”

So ex-politicians should not “selfishly deny to Americans” the wonderful ideas they have simply out of self interest. They should share in the sacrifice.

Methinks1776 September 25, 2011 at 5:33 pm

I don’t hate anyone enough to prevent me investing in his idea to make gobs of money. I also don’t hate anyone enough to flush money down the toilet simply to frustrate their much better idea. There aren’t that many stupid people in the world who let personal differences stand in the way of good business. You’re talking out of your poopshoot.

Also, you totally missed the point.

Market Johnson September 25, 2011 at 8:46 pm

There are plenty of people in the world that are like that, especially those that are already so well off financially that it’s little more than a game to them at a certain point. Second, you assume that any president with a single basic idea for a profitable business should immediately and unquestionably be able to make billions off of it or else they know NOTHING about economics and are useless idiots.

As usual, you and those who think like you assume that success is just a matter of trying hard enough, and anyone with enough gumption should be able to make huge fortunes off of an idea, that is, if it’s any good, of course.

You don’t consider the fact that even had every single President we’ve ever had had a blockbuster business idea, it’s highly likely that few if any of them would have come to fruition, as it takes a lot more than just a good idea to make a fortune. The level of success you assume ought to be so easy if they were anything but morons requires proper timing, market conditions, interaction from other companies and products, and an assortment of other factors. And those conditions have gotten progressively rarer considering the speed at which technology changes.

g-dub September 25, 2011 at 9:15 pm

Second, you assume that any president with a single basic idea for a profitable business should immediately and unquestionably be able to make billions off of it or else they know NOTHING about economics and are useless idiots.

WTH?

You missed the point. It is: just for once they ought to put their money where their mouth is, just to prove they aren’t all mouth, and especially when they are quite willing to put other people’s money where their mouth is.

Methinks1776 September 25, 2011 at 9:17 pm

I assume none of those things, but I don’t expect a person who thinks that his life is not impacted by the decision he makes to understand that.

The fact is that none of the ideas they championed with other people’s money were any good. That is why every single president abandoned them after leaving office. And that is the point you cannot get. Not one of them ever even tried.

MarketJohnson September 25, 2011 at 9:48 pm

Do you have a straw man set up in your garage for debate practice? If so, he is serving you well.

Sam Grove September 25, 2011 at 9:46 pm

It’s amazing how quickly the world of economics forgets that money isn’t the only driving force in people’s lives (although those with a lot of it are certainly trying their hardest to make it that way; hooray consumerism).

It’s dismaying how many people think economics is about money.

Ken September 25, 2011 at 5:23 pm

I suppose it’s theoretically possible that someone could have an actually good and potentially profitable idea, coupled with no aptitude whatever for putting it into practice…but I doubt that describes any of the lot Professor Boudreaux has in mind. :-)

It’s a good point, therefore.

Methinks1776 September 25, 2011 at 5:35 pm

Not all innovators are good at business. That’s why they get someone to run the business. A good idea doesn’t have to remain unexplored just because one person doesn’t have all of the skills necessary to bring the innovation to market. Which makes Don’s an especially good point.

Daniel Kuehn September 25, 2011 at 5:39 pm

This is a fallacy of composition, is it not. Just because an industry pays dividends for a community doesn’t mean that everyone taking up that business can get rich over it, right? Not everyone can be successful entrepreneurs, and even people who are successful entrepreneurs can’t always become excessively rich in every industry.

Take online, non-traditional media. Essential for the future? Yes, probably. Something that’s going to be lucrative? No, not necessarily. The two don’t always go hand in hand.

Methinks1776 September 25, 2011 at 5:47 pm

Awesome. If they see no profit in it, then why do they insist on forcing taxpayers to invest in it? If they know they can’t be successful entrepreneurs, then why do they force taxpayers invest in Solyndra? If it’s an awesome idea, invest your own. They don’t have to run it. They don’t.

See, the people who invest their time in online media (like blogging) do it without forcing anyone else to invest in it at the point of a gun. If nobody reads a blog, the blogger stops. The blogger may not become wealthy, but he gets something out of it. If he didn’t he’d stop. We know that non-traditional media is important how? Because it is popular. People “buy it”. We know most green energy isn’t because people don’t.

Daniel Kuehn September 25, 2011 at 5:40 pm

It’s also quite possible that Carter can think something is very important without money-making being his primary goal.

Do you do what you do because it makes you rich, or because you enjoy doing it?

Daniel Kuehn September 25, 2011 at 5:41 pm

Which isn’t to say we walk around in rags doing what we love. It’s only to say that it’s a trade-off and lots of people like doing what they love enough to not pursue something else simply because it will make them money.

Don Boudreaux September 25, 2011 at 5:58 pm

I don’t share your confidence in these charlatans.

Daniel Kuehn September 25, 2011 at 7:15 pm

What charlatans? People who do things they enjoy or find value in doing?

g-dub September 25, 2011 at 7:25 pm

What charlatans?

I’m swag’ing retired politicians.

Daniel Kuehn September 25, 2011 at 8:05 pm

I think that is what he means, but since I wasn’t even talking about politicians in that post (and since I don’t have confidence in them) I had to ask.

g-dub September 26, 2011 at 1:03 pm

You dropped the central element that easily? And then had to ask what might be called an obvious and at a minimum reasonable assumption?

I guess Don first should have asked you if you had dropped the central element in your whimsical follow-post, before he replied. We can’t be too sure WTH we’re talking about. Then, 2000 posts later, cuz all we got is time, we’ll get to the meat.

There is something a little strange about this.

g-dub September 25, 2011 at 6:05 pm

Carter can think something is very important without money-making being his primary goal.

Right but his profound sense of altruism, and experience as a chief executive must lead him to the tough decision of doing the most important thing, even if he doesn’t love it, or money.

…lots of people like doing what they love enough to not pursue something else simply because it will make them money.

Politicians are well known to love what they do: taking other peoples money. A side benefit is not have to worry about making their own money. When they retire, they just work on it a bit more indirectly.

Don Boudreaux September 25, 2011 at 6:54 pm

Daniel: Two things.

(1) If Carter’s ideas were so superb, he need not have kept the billions he would have earned by implementing them. He was always perfectly free to be Gandhi-like if he wished; he could have given away all of the money he earned from proving that his ideas have genuine value.

(2) I have never in my life advocated that A be forced to subsidize the ideas or dreams or schemes of B – even if I happen to believe that B’s ideas are simply divine. (Of course, I’m naturally skeptical of B’s ideas if B advances them under the assumption that taxpayers will be forced to underwrite their implementation.) Until I (or someone who holds positions on this matter very much like my own) starts to demand that others be forced to pony up funds to finance my favorite fantasies, please don’t equate me with a politician. (Just the thought of being lumped in with such vile critters makes my skin crawl.)

Don Boudreaux September 25, 2011 at 7:05 pm

Another thought about Daniel’s proposed excuse for why Jimmy Carter might – out of a magnanimous wish to not sully his person with commercial success – have avoided implementing his ideas in private markets even though, as president, Carter assured millions of Americans that his proposed use of their tax-dollars was wise: Did it not occur to Dr. Carter that, perhaps, the millions of Americans he was willing to force to fund his notions might also, like him, have preferred that their valuable assets be used not for lowly commercial ventures that (ick!) yield profit to those who fund them but, rather, for other pursuits that are more noble if not as profitable and useful?

Daniel Kuehn September 25, 2011 at 7:20 pm

Why would he think commercial success would “sully his person”?!?!? You’re acting bizarre today Don.

g-dub September 25, 2011 at 7:35 pm

Because countless statements by “progressives/liberals” effectively say “commercial success equates to greed” in the mind of a “progressive/liberal” (which Carter is in spades) and thus is a filthy endeavor, as “greed is wrong.”

Since you’re (a) not stupid, you can only be (b) disingenuous. Doing (b) often enough bakes an (a) cake.

Daniel Kuehn September 25, 2011 at 8:08 pm

You forgot (c.) – that you’re either stupid or disingenuous.

There’s another option I prefer – (d.) – that you’re not stupid or disingenuous, you’re simply wrong. Why you and others on here have to leap to the most asshole conclusion you could come up with is beyond me. I don’t know why your brains work like that. I personally doubt your stupid or disingenuous, g-dub – and to my knowledge I’ve never called you either of those things in my life. I do think you can be wrong, and I think this is one of those times.

g-dub September 25, 2011 at 8:45 pm

Was the statement emotive? Perhaps, and maybe probable. Was it easily understandable given all that anyone who hasn’t been asleep for decades knows about the attitudes of “progressives/liberals” about “commercial success?” Yes.

But you frame it as if it was a stretch to even imagine that, and thus say someone is “acting bizarre.” I think you are wrong today.

Daniel Kuehn September 25, 2011 at 9:17 pm

Well I’m glad you think I’m wrong. I’ve never thought of myself as a liberal personally, but I would be more vocal against liberals if I had the impression they thought commercial success was a bad thing.

Daniel Kuehn September 25, 2011 at 9:18 pm

*glad you think I’m wrong as opposed to stupid or disingenuous I mean. I’m neither stupid nor disingenuous and I don’t like people who don’t know me and who won’t even identify themselves calling me that.

g-dub September 25, 2011 at 9:39 pm

Well if I had really wanted to insult you, I would have called you a “liberal.” (The modern bizarre US usage of “liberal.”) But I didn’t and wasn’t implying that, to be clear. Plus, I consider myself a liberal, in the way Hayek used it, but not a “liberal.” It gets confusing.

What seemed apparent to me, may not have been apparent to you. I can admit that while not understanding it.

Perhaps you should get out more.

vidyohs September 26, 2011 at 6:13 am

“I would be more vocal against liberals if I had the impression they thought commercial success was a bad thing.”

I have never said I thought you were stupid. I do know that you are disingenuous as a general rule, and willfully blind as a frequent rule.

Liberals are very much welcoming of commercial success, even the most flaming liberals, such as Michael Moore. Notice none of them run from the money.

In the looney left viewpoint: commercial success for a liberal = good, commercial success for a capitalist = bad.

The Goreacle is just like Moore, nothing of value in this man’s humble opinion.

Wealth for the reclusive Koch brothers is bad, especially if it is used to advance freedom. Wealth for the flamboyant liberals who trample on every sense of decency, including manslaughter/reckless endangerment, Ted Turner, Alex Baldwin, the Kennedy clan, Barbara Strident, Bwaney Fwank, Nancy Pelosi, et. al is good, even if they never spend a penny on liberal causes but just talk liberal causes up.

Fred September 26, 2011 at 8:19 am

“In the looney left viewpoint: commercial success for a liberal = good, commercial success for a capitalist = bad.”

Liberals are hypocrites. It’s that simple.

They have one set of rules for themselves, and another set for anyone who disagrees with them.

Take two people doing the exact same thing and the liberal will judge them differently depending on which camp they belong to.

g-dub September 26, 2011 at 1:06 pm

Vid> …and willfully blind as a frequent rule…

I remained puzzled how DK can be unaware of what seems obvious to me, but I am giving him the benefit of the doubt.

vidyohs September 26, 2011 at 2:41 pm

@g-dub,
Stick with it for awhile and you’ll see that Disingenuous Kuehn (DK) earns his label.

As he self reports here (thinking no one will notice his disingenuousness or blindness), he has never met, seen, or heard a single socialist screed, scripture, or sermon from a flaming looney or a stealth looney, that he couldn’t see some good in or even accept full blown as presented to him.

But, of course………he doesn’t think of himself as a liberal…..no no no. What liberal does? They just all think that they are right, not looney at all.

DK is that stealth liberal (looney, regressive), that first small sip of arsenic that does not kill, but if taken in with followup doses, will eventually overcome the body’s defenses and kill.

Daniel Kuehn September 25, 2011 at 7:20 pm

Is it cause I pushed you on that ATM/PSST point???

Daniel Kuehn September 25, 2011 at 7:18 pm

What makes you think every superb idea is a profitable idea Don?

re: “Until I (or someone who holds positions on this matter very much like my own) starts to demand that others be forced to pony up funds to finance my favorite fantasies, please don’t equate me with a politician.”

You seem to misunderstand what I’m saying. I’m saying everyone does things for reasons other than money. I will continue to equate you with other human beings in that sense, because you could have continue to demonstrate this as well. You’ve got a law degree from a great school. You could have had a lucrative law career. You didn’t. You’re pursuing something you value for reasons entirely independent of your salary. I don’t know why that bothers you (or I guess it just bothers you to admit that we’re all human and have this quality). But tough luck – I’m still going to see you in that light.

g-dub September 25, 2011 at 7:37 pm

What makes you think every superb idea is a profitable idea Don?

It is possible I missed this. Please point out where he said this.

Don Boudreaux September 25, 2011 at 8:08 pm

It’s a burden-of-persuasion thing. A huge burden of persuasion is upon those persons – or ought to be upon those persons – who announce to the world the high quality of their visions for the future but who put nothing much at stake while demanding, ultimately at the point of guns, that others put up funds to finance the implementation of these visions that are announced – visions that are announced by people whose principal achievement is winning electoral office (an achievement that has nearly nothing to do with any of the visions of the future that these successful election-winners assure us are economically sound).

If you believe that people with the power to so command the resources of others are not unduly tempted to be over-confident in the accuracy of their own fortune-telling, then so be it: you have a decidedly different – a far more rosy – understanding of human nature than I have.

Daniel Kuehn September 25, 2011 at 8:11 pm

re: “If you believe that people with the power to so command the resources of others are not unduly tempted to be over-confident in the accuracy of their own fortune-telling

Could you stop making these statements as if I’ve said anything remotely like this, Don? You’re morphing into muirgeo and it’s not pretty.

Don Boudreaux September 25, 2011 at 8:14 pm

Daniel: How else am I to interpret your defense of politicians who announce that they have special insights into the future but who back the implementation of these insights, not chiefly with their own funds, but with funds forcibly extracted from others? Pray tell, what DO you then mean?

Don Boudreaux September 25, 2011 at 8:23 pm

You ask “What makes you think every superb idea is a profitable idea Don?” – implying that I’m unduly harsh to criticize Messrs. Carter, Obama, et al., for assuring the public that the ideas they wish to force others to fund truly are superb.

I respond by saying that “It’s a burden-of-persuasion” matter – meaning: the fact that politicians get to force other people to finance their fancies likely means that politicians over-sell their fancies. When the personal cost of championing X is near-zero (and the personal gain from doing so – say, by successfully duping people who, as voters, are always-too-eager to be duped – is high), there is (1) no reason to believe that X has any merit, and (2) every reason to believe that people with the power to force the funding of X are all-too-likely to abuse that power.

If you do not realize that your position implies the condition under which such abuse is likely to occur, then, well, you don’t realize a fact that appears to me to be undeniable.

Daniel Kuehn September 25, 2011 at 8:36 pm

re: “If you do not realize that your position implies the condition under which such abuse is likely to occur, then, well, you don’t realize a fact that appears to me to be undeniable.”

It seems like I need to make this explicit.

I have never denied that abuse is likely to occur. I have never defended politicians as being above that abuse. I have always recognized this to be a good argument for robust political institutions. I have always been of the opinion that this is the primary reason not to make allocative decisions with government unless there’s a good reason to. You know I think these things, Don. You seem to interpret the fact that I haven’t gone whole-hog libertarian as me thinking that “people with the power to so command the resources of others are not unduly tempted to be over-confident in the accuracy of their own fortune-telling”. If my several year record on Cafe Hayek isn’t enough to show that I don’t think that, then I’m telling you now: I don’t think that.

I’m a pro-market guy that has consistently highlighted the importance of constitutionalism and federalism for ensuring a free, prosperous, and efficient society for precisely the reasons you are highlighting. If you read me as “trusting those charlatans” how the hell do you manage to get along with the rest of the world?

Here’s how I think people who understand economics better than the average politician should get along with the rest of the world: recognize that people aren’t charlatans or hero-worshipers. People just get excited about what they think are good ideas (and in a lot of cases, they are good ideas). Not all of these good ideas are profitable ideas. That’s just life. The market is a very good thing, but the market and nirvana do not coincide. People aren’t dumb – they recognize this. So instead of considering them charlatans, keep pushing the point about the limits (and the pre-requisites) of this allocative mechanism – and the more that message sinks in the better society will be.

Market Johnson September 25, 2011 at 8:51 pm

One of Russ’ podcasts discussed this idea of over-estimating the accuracy of one’s own guesses. Maybe I don’t know you well enough, but my assumption is that you are human too (maybe over-estimating my own accuracy here as well), and that the same bias applies to you.

Daniel Kuehn September 25, 2011 at 8:53 pm

re: “Maybe I don’t know you well enough, but my assumption is that you are human too (maybe over-estimating my own accuracy here as well), and that the same bias applies to you.”

It’s the assumption I’ve always operated on! :)

Fred September 26, 2011 at 8:25 am

“Not all of these good ideas are profitable ideas.”

Translation: not all good ideas are good enough for other people to voluntarily trade the fruits of their labor for that idea.

Meaning that the idea is so good that it must be forced onto these stupid people because they do not know what’s good for them.

Holy hubris Batman!

muirgeo September 26, 2011 at 9:19 am

“A huge burden of persuasion is upon those persons – or ought to be upon those persons – who announce to the world the high quality of their visions for the future but who put nothing much at stake while demanding, ultimately at the point of guns, ”
Don

So in other words if Obama was more like Dick Cheney and pushed fossil fuels as the only component of our energy policy and then proceeded to make millions from Halliburton stocks and Halliburton government contracts then that would be OK…

MAYBE .. the reason Jimmy Carter and Obama will not invest in renewables themselves is because they realize they are poor investments when put up against the massive subsidies of the fossil fuel industry thus making their argument for similar public investment in renewables legitimate.

You conveniently forget that we are not starting with a market system when suggest all new comers should abide by your rules and I guess allow for grandfathering in the current monopolies WHO ARE holding guns to our heads and sending kids to get killed in the Middle East procuring their product.

g-dub September 25, 2011 at 8:29 pm

“I’m saying everyone does things for reasons other than money.”

Given politician’s propensity in “advising” me what to invest in, I am now wondering what the IRS will accept in leiu of legal tender.

Methinks1776 September 25, 2011 at 9:33 pm

People just get excited about what they think are good ideas (and in a lot of cases, they are good ideas). Not all of these good ideas are profitable ideas. That’s just life.

It’s the OPM problem, Danny.

You have every incentive to take much bigger risks with other people’s money than you do with your own. Since the bigger risk you take, the greater the expected reward, if you win you get rich and look like a genius. If you lose, it’s not your money. You simply forgo the incentive comp (either in the form of a political win or in the form of money or both). If you’re a politician, you may be able to still win if you lose by convincing people that the sacrifice was for the greater good.

Politicians are willing to take negative expectancy bets with your money. They are not willing to do so with their own. That Jimmy Carter doesn’t is unimportant. That NONE of them do – especially considering that some, like Bush, were businessmen – is very telling. Why does this not make you suspicious?

g-dub September 25, 2011 at 9:46 pm

If you’re a politician, you may be able to still win if you lose by convincing people that the sacrifice was for the greater good.

They might not need to try that hard. Turn attention to abortion and guns, and fear of organized crime at the border. Then do nothing.

Why does this not make you suspicious?

cuz they’re altruists who luv their work helping human kind! WHY CAN’T YOU PEOPLE JUST GET THIS! lol!

JoshINHB September 25, 2011 at 8:35 pm

Do you do what you do because it makes you rich, or because you enjoy doing it?

That depends upon which aspect of doing you are referring to, does it not? Most of an individual’s behaviors and actions are not monetized at all, let alone profitable.

The activities that earn a living for an individual are obviously done primarily for financial gain. Which is not say that the person does not or cannot enjoy those activities.

Daniel Kuehn September 25, 2011 at 8:39 pm

re: “Most of an individual’s behaviors and actions are not monetized at all, let alone profitable.”

Right! Non-market allocation is all around us. If you look at what gets allocated with markets and what gets allocated using other mechanisms, and think about it like an economist it makes good sense how we’ve approached things. Humans aren’t dumb.

JoshINHB September 25, 2011 at 9:07 pm

I think the point that you are trying to make is that:

Ex presidents freed from the need to make a living thanx to their generous pensions are able to engage in whatever activities they want. And given their nature, that is public advocacy.

Do I have that right?

Daniel Kuehn September 25, 2011 at 9:15 pm

That wasn’t exactly my point, but that seems like it would be a good reason why they’re not concerned about becoming rich.

But their motivations aren’t even what most concern me about this. What most concerns me is this idea that beneficial things are profitable things. That seems to be a very dangerous way to look at the world. Dangerous because it’s simply wrong – not because I have a problem with commercial success.

JoshINHB September 25, 2011 at 9:59 pm

Fair enough.

I interpreted Don’s post as being that ex politicians seek financial gain by advocating for greater government intervention and-or selling the connections that they made in office to lobbyists. With the further observation that they don’t try to use the free exchange of commerce to enact their ideas and help people.

I think that observation is accurate (which may be why I interpreted it that way) and while it doesn’t directly contradict what you just wrote, it is at odds with the thrust of your opinion.

It would be one thing if a former president did pro-bono legal work for, or used their prestige to support individuals and causes that they cared about without being renumerated, but is something else entirely when a former president earns large sums of money by preaching to the choir or lobbying. I’ve not aware of any ex president spending his time exclusively doing the former, though in fairness to Carter he has done a lot of that type of thing.

Don Boudreaux September 25, 2011 at 8:42 pm

Right. I love teaching and writing; I really do. But I’d find another career if my current one paid me much less than it does. At the margin I’m willing to trade off – indeed, have actually traded off (by turning down a job years ago with a high-paying DC law firm) – at the margin some monetary income for job satisfaction and other non-pecuniary benefits that we college professors enjoy (rather scandalously, by the way – for most of our job security is undeserved).

And, importantly, I never announced to the world that it has too few lawyers.

But when the likes of the President of the United States announces that the future of the economy is (say) in “green” industries, but, at the same time, that mortal makes no special commitment of his own funds to the furtherance of any firms in such an industry, there is absolutely no good reason to take that person’s pronouncements seriously. The listener’s presumption should be that he or she is being duped.

Market Johnson September 25, 2011 at 8:58 pm

And so if I became President on a platform of green industries, instituted policy to promote such green industries (because of how important I believe they are), while simultaneously making a fortune on those green industries via investment, what would you or the rest of my political opponents be saying? Well, you’d be saying I used my Presidency to make a fortune, that green industries actually harm the economy because of even the slightest hint of government involvement, and you’d have no more confidence in my ability to predict advantageous courses of action for the country. Re: You’d still hate me because I’m a politician.

What you’re argument is boiling down to here is that the people who decide what technologies and industries our country ought to invest in are the most profitable ones. If that’s the case, Warren Buffet for President!! Oh wait, he supports higher taxes on the rich. I guess that backfired….

Market Johnson September 25, 2011 at 9:01 pm

What your argument boils down to here is that the people who decide what technologies and industries our country ought to invest are the people who have invested in the most profitable ones.*

Market Johnson September 25, 2011 at 9:02 pm

This site needs more edit button

HaywoodU September 26, 2011 at 8:13 am

Consumers decide with their spending habits. It is not top down. Learn the basics.

a_murricun September 25, 2011 at 5:56 pm

BHO’s “talent”? Reading speeches one does not understand may make a great actor. Of course, the best actors understand their speeches, like Reagan, Eastwood, Wayne, etc. Apparently not “smart” enough to fake conviction or sincerity, as Spencer once advised Katherine.

Harking back to BHO’s 60 Minutes interview with Lesley Stahl circa July 2008, one recalls that Michelle had to prompt and/or speak for him several times. “Talent”? Yeah, right. See the strings?

Chucklehead September 25, 2011 at 7:19 pm

“Soros & Obama 6-5-2011;By WEF12

Soros told Obama,; I’ve got a Job for you; I need a Bull Crap Artist who can steal Money too.

Obama told Boss Soros; then you know I’m your Man; I can have the whole Country eating out of my hand.

Soros told Obama: Boy don’t play around; Our Ultimate Goal is to bring the US down.

We’ll gut the Tax Vaults & at the Same time pretend; That it’s George Bush’s fault and that we are their friend.

If unemployment goes up and production goes down; You must make them believe things are turning around.

We’ll raise Gas Prices and Energy too, Every dollar we raise is more Tax Money for you.

We’ll take over the Banks & Private Industry as well; If Patriots get mad, tell them all Go To Hell.

Soros told Obama; Boy, I like your style; Stab your buddy in the back & at the same time Smile.

Obama while you’re at it, let’s bring the Dollar down, So I can make a killing like I did with the pound.

Too bad America, Your time is passed; Obama tells us all we can kiss his ass.

Soros’ New World Order is his primary Goal; It’s in with the New & out with the Old.

Don’t worry Obama, You’ve done your job well, You’ve taken America to the Gates of Hell. “

Adam September 25, 2011 at 6:59 pm

Since when does a President have to be an expert in every sector of government? Pres. Obama’s strength is not as an economist nor businessman — that is why he has advisors and a cabinet.

I’m just a little confused as to why you’re faulting a man, who is not an entrepreneur, nor has ever claimed to be, for not being an entrepreneur….is a prerequisite of presidency running a successful firm?

Don Boudreaux September 25, 2011 at 7:07 pm

I fault him because he proposes that millions of people be forced to fund things that he does not risk significant amounts of his own personal funds to finance.

Adam September 25, 2011 at 7:16 pm

OK…I can certainly understand, but that could be said for just about any policy that any President in history has ever implemented. Should Presidents only go to war if they’d be willing to personally fund it themselves?

g-dub September 25, 2011 at 9:07 pm

Should Presidents only go to war if they’d be willing to personally fund it themselves?

I would have never thought to bucket crony funding for something like Solyndra or automakers in with war making powers.

But I guess I’d say the president should pay part of his/her income in taxes, like the rest of us, to pay for a war, presuming it really was for defense.

If anyone wants to fund Solyndra or car companies, that is his/her own business. We should have no part other than voluntary.

Richard Stands September 25, 2011 at 11:24 pm

They should at least lead the charge into battle.

vikingvista September 26, 2011 at 1:41 am

Now there’s a proposition that might actually get me out to the polls.

muirgeo September 26, 2011 at 12:02 am

Millions of people elected him and want him to subsidize renewables.
He’s doing his job.

If the oil industry wasn’t heavily subsidized then maybe you’d have a point… but it is and you don’t.

brotio September 26, 2011 at 1:10 am

You are a hypocrite crony corporatist.

We want all corporate welfare ended. You only want corporate welfare ended for companies you don’t like.

muirgeo September 26, 2011 at 9:03 am

No you do NOT want all corporate welfare ended. You guys in general support money as free speech and corporate personhood and unlimited campaign donations…. with those positions you have NO way to end all corporate welfare. You’ve obviously not thought this through. You say what should happen or what should be but have NO real world approach to getting us there.

Why does Don constantly rail against any new proposals for alternate energy subsidies but never against the massive subsidies the oil and fossil fuel industry receive. It’s as if he grandfathers in all current subsidies and special breaks but complains about any new proposals even when they are ones the majority prefer.

Fred September 26, 2011 at 12:17 pm

“No you do NOT want all corporate welfare ended.”

Translation: How can I beat you in an argument unless you conform to a straw man I can easily slay?
No you don’t want what you say you want!
You want what I say you want!
And if that doesn’t work I’ll move the goal posts!
I’m muirgeo and while on the outside I am an adult, on the inside I’m a two year old child kicking and screaming about how IT’S JUST NO FAIR!

DAB September 27, 2011 at 1:30 pm

HA! @ Fred. I was just thinking the same thing. When a liberal can’t support his/her counter position, he/she adjusts the original argument so as not to be bothered with the logic. Oh, and also, a few insults to make it all more convincing as in, “You obviously haven’t thought this through.” Translation – “You are obviously too stupid to know what you just stated, so I am changing your original position to a straw man that I can easily knock down.”

JoshINHB September 25, 2011 at 8:49 pm

I’m just a little confused as to why you’re faulting a man, who is not an entrepreneur, nor has ever claimed to be, for not being an entrepreneur….is a prerequisite of presidency running a successful firm?

No, but a prerequisite for presidency is successfully running something, anything, beyond the applicant’s own mouth.

Successfully managing a business, executive electoral office, running a non profit organization or military experience will suffice.

Obama’s self described primary qualification for consideration was community organizing, ie political provocateur. Which, again by his own admission, completely failed to improve the well being of the the community that he organized.

Jim September 25, 2011 at 7:29 pm

This post could be a page out of Atlas Shrugged:)

Invisible Backhand September 25, 2011 at 9:15 pm
Richard Stands September 25, 2011 at 11:36 pm

I’m not a fan of attacking posters as “dumb.” But when a poster boasts about not reading a book because it’s “too long” (and asserts it with a picture of an expression shortened to four letters because “too long” is too long), I find myself pressed to conclude one of two things. That poster is a child (with a commensurate attention span), or that poster is an imbecile.

Perhaps there is another explanation – maybe one that can also be summarized with pictures and abbreviations.

Invisible Backhand September 26, 2011 at 11:23 am
Richard Stands September 26, 2011 at 4:36 pm

OK, given the rejoinder, I can’t know for sure. But it seems that “another explanation” is unlikely to be the answer.

I find it interesting that the same poster who attacks others for not reading the linked articles, takes pride in his ignorance of that which he decries.

Sorry, I don’t have a picture which encapsulates this conclusion.

Crawdad September 26, 2011 at 4:19 pm

Look Richard, IB decided to prove you correct. He’s an imbecile.

Cameron Murray September 25, 2011 at 9:10 pm

Sorry Don, but your argument is misguided. Politicians pronounce industries as vital, or essential to our future, BECAUSE they are uneconomical /unprofitable to operate domestically. Hence, they are exactly the industries you would no get into after you leave office.

The bigger question of why many of these industries is ‘vital’ is fat greater than your narrow assumptions about human behaviour. If the world was guaranteed to be peaceful and able to cooperate to manage debts accruing to each other (Seen Europe lately), then national specialisation of production by each nation to the Nth degree is perfectly okay.

But in the real world, where the threat of conflict is real, and bargaining power exists in various markets, you may very well want a degree of diversity in your domestic industry, lest you be at the mercy of some foreign crackpot government who will stop selling you oil or machinery to exercise their bargaining power.

Hence, there is an ongoing political battle, under the grand umbrella of national defence/independence, to ensure that there are limits to specialisation, and a diverse domestic production base (especially in manufacturing).

Don Boudreaux September 25, 2011 at 9:13 pm

And you think that such as you describe is the principal motivation for politicians to spend other people’s money?

You trust strangers to spend your money far more than I trust them to spend mine.

Cameron Murray September 25, 2011 at 10:16 pm

The defence argument is not THE single principle motivation for political spending, but it is a very strong, and logical, argument for intervention by government to ensure some degree of diversity in domestic economic production. There will always be a degree of pork-barrelling in a democracy.

Given that you trust strangers to defend your money and your freedoms, I suggest that a measure of trust is warranted for those strangers’ decisions to actually fulfill their role.

Your taxonomy of their money and mine is also reveals an irrational degree of idealogical bias. Surely taxes to fund government are a cost for protecting the private rights of citizens? Your private right to have you own money, without needing your own private army, arises from the very government institutional structure that taxes fund. Hence, a tax raising government is a necessary precondition for private ownership itself. One could easily argue that taxes are never your money at all (regardless of the incidence of tax on incomes).

Remember, I do believe that government spending is often wasteful and can be made more efficient, but that doesn’t necessarily logically connect to the argument you presented.

I am still not sure whether you agreed with this proposition -
“Politicians pronounce industries as vital, or essential to our future, BECAUSE they are uneconomical /unprofitable to operate domestically. Hence, they are exactly the industries you would no get into after you leave office.”

It would make your argument seem a little foolish, no?

Stone Glasgow September 25, 2011 at 9:30 pm

Many people believe that a leader with a gun, who forces people to do his bidding results in a better world. They feel that his plans would never materialize without force; that it’s like a surgeon who wields a scalpel, expertly cutting and changing the body, causing temporary injury to ultimately improve the patient’s life. He can do this because he can see the big picture; he can see that the patient will be better off after the surgery.

A former president is like a surgeon without a license and no equipment. How can he be effective in private business without his gun? How can he save the world without his tools?

Denno September 25, 2011 at 10:12 pm

This post has immediately become one of my all time favorites. Thank you Professor Boudreaux. Obviously, the saddest part is not that these politicians would never invest any of their own money or energy in these areas, but that they have the hubris to make the decisions that affect these industries.

Gil September 25, 2011 at 10:18 pm

So, neither do a lot of business people – OPM.

Ken September 27, 2011 at 12:34 am

Gil,

The difference between business people and politicians is that politicians force people to participate in their sketchy investments. Business people have to convince people to invest in their ideas, i.e., people voluntarily invest their own money in private ventures, but politicians for people to invest money in their “public” ventures.

I thought you’d learn this by now. But I guess you’re not interested in actually learning things that don’t confirm your bias.

Regards,
Ken

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Chucklehead September 25, 2011 at 11:42 pm

“a tax raising government is a necessary precondition for private ownership itself.”
No, Not true.

Cameron Murray September 26, 2011 at 1:50 am

How are you going to enforce you private claim to land, or resources then?

vikingvista September 26, 2011 at 3:47 am

Probably much the same way the previous owner did. Now the previous owner might’ve been the sort to to defend his rights solely with guns and ammo, but if you’re talking about a large community of property owners that evolved over a period of time, then it is likely folks would’ve by now discovered the benefits of outsourcing their property defenses, and claims disputes, to firms specializing in those services.

What kind of services could they offer? Well, clever entrepreurs would likely see folks getting in wasteful tussles, presenting bills of sale or contracts, or otherwise presenting their claims, and perhaps settling their disputes in costly, even violent ways. Entrepreneurs could offer to do those tasks for them, and even engage in arbitration if necessary. Heck, just for the benefits of keeping the peace, it’s not hard to imagine the original owners, realtors, buyers, and everyone else who is participating in property transactions, or even property maintenance or usage, insisting upon the use of such services.

Of course, nobody can tell for sure, since one thing we know about markets is that they are dynamic and unpredictable. But between observing how international agreements work (where there is no overlording state), and how private security and dispute resolution work, it’s clear that not much innovation is really required to get the government out of it entirely. Perhaps all that is necessary is for government to stop crowding out such competitive services with their monopoly.

Cameron Murray September 26, 2011 at 9:07 pm

“between observing how international agreements work (where there is no overlording state), and how private security and dispute resolution work, it’s clear that not much innovation is really required to get the government out of it entirely”

If history is any lesson, that is not the reality of the world. Governments are simply the winners of previous wars – the ones who had the biggest army at the time. Look at the lessons from civil wars in Africa – the government must be, almost by definition, the biggest armed force in the country. And if they aren’t, then the biggest armed force will become the government.

And seriously, international agreements? LIke the Antarctic Treaties, where the US and Russia choose to ignore them altogether. Or the wars waged recently by the US (the world’s biggest army) in the middle east – with or without international support?

Maybe your utopian vision of a world could work with private contracted security, but the one I live in, full of real human beings with selfish intention (the very same intention prescribed to be a source of innovation) where power is a very real motivation.

vikingvista September 27, 2011 at 1:16 am

Although a discussion of private national defense would be interesting, and your impression of history is not entirely correct on the matter, I was responding to your question regarding how to “enforce you private claim to land, or resources”. However a country’s larger territorial defenses against outside military invasion is managed, it is both in practice and in theory quite a different service than enforcing private property claims within the country. That is, if you like, for the sake of argument, you can suppose that a national government successfully defends the borders against invasion, but does not provide the services you asked about, leaving it to private organization.

Before we venture off topic, as you curiously desire, into yet another discussion of the false “utopia” bromide, or how you are missing the point about international agreements, would you care to tell me if you agree or disagree with my answer to your question, and why?

Cameron Murray September 27, 2011 at 2:05 am

Disagree. Clearly.

My argument is that a monopoly on coercive force is a prerequisite of government. Therefore, a system of private police, employed by private parties to enforce their private contracts will fall apart as soon as the institution with the most arms realises they can take complete control.

Why wouldn’t the largest domestic armed force take control? That institution then becomes the government.

Your argument that there is an existing owner already implies some kind of institutional arrangement in place, evolved from these dynamics. Who is going to enforce your contract with your private security force? Why wouldn’t they simply take your property if there is no greater force to stop them?

Perhaps you can use some examples of how such private nirvanas have evolved throughout history? Or if not, perhaps consider why.

In any case, we get back to Don’s original point of ‘his’ money being spent by polticians. The money can only be his if there is a government with a monopoly on coercive force in existence to defend private property rights.

vikingvista September 27, 2011 at 3:20 am

“My argument is that a monopoly on coercive force is a prerequisite of government.”

Not so much a prerequisite, as a part of the definition of government (at least government as state). But I essentially agree.

“Therefore, a system of private police, employed by private parties to enforce their private contracts will fall apart as soon as the institution with the most arms realises they can take complete control.”

Therefore? There are some implicit premises you must be using that I am not seeing to make this deduction.

Certainly, a conquering army can conquer. No argument there. And certainly one can at least vaguely imagine all kinds of social dynamics, including some leader somehow managing to organize a successful conquering force, within ANY kind of society.

But that doesn’t explain why the best way to prevent those abuses is to advocate for them. People frequently assert that we should create a beast more to our liking so that we don’t get one not to our liking. But clearly people of that mindset and with the capability of imposing such an authority, need not impose such a beast at all. They already are a large nidus of willing participants. That is, if they aren’t going to impose something upon themselves that is not to their liking, who else possibly could?

The other problem with that view, is that it doesn’t really explain how creating one kind of beast protects you from a worse beast. If there are so many people of a common brutish mindset capable of overpowering everyone else, you have to ask not only (1) why didn’t they get their way to begin with, as discussed above, and (2), what’s to stop them from taking your lesser beast the extra mile to create the worse beast? Clearly such people, as we see everyday in our own government, don’t really care about the pretty words they allegedly swear an oath to. All they care about is how they can expand the power they’ve acquired.

And as with all guaranteed monopolies, there is NO strong incentive to serve the customers. As a monopoly capable of compulsion, “customers” is a less appropriate term than “servants”, with the associated incentives.

“Why wouldn’t the largest domestic armed force take control? That institution then becomes the government.”

Again, one can vaguely imagine anything. But why would you hire a security agency that you feared would take control? You are confusing markets with government right at the outset. You are assuming government dynamics, before you even arrive at your government destination. You can’t do that. In a market, a firm must sell itself. It must appeal to customers. Obviously, it would have to have a way to ease the fears of customers. How might it do that? Again, we are getting into market unpredictability, but there are some examples you can look at. How does the US government prevent some general from launching a nuclear attack? How does a security guard company assure its customers that its guards will not rob their businesses? And of course competition would arise to collect unsatisfied customers, thereby depleting profits from “the scary” security agency.

In other words, the incentive right from the start is to profit by pleasing customers. At what point does that suddenly change into a conquering army?

“Your argument that there is an existing owner already implies some kind of institutional arrangement in place, evolved from these dynamics. Who is going to enforce your contract with your private security force? Why wouldn’t they simply take your property if there is no greater force to stop them?”

See above. They wouldn’t have the power to do so if they began assaulting property owners as a mere startup (nor would they even be a startup without persuading bankers, investors, insurers, employees, landlords, suppliers, etc. of the relevant aspects of their business model). Secrecy of their armed capacity, or anything else threatening to their customers, would unlikely be a strong selling point for their services. And if their existence as a large successful firm was entirely dependent upon a history of satisfying customers (and the numerous other firms they associate with), and peacefully competing, at what point do they manage to turn into a conquering army?

“Perhaps you can use some examples of how such private nirvanas have evolved throughout history?”

I’ve never advocated for any kind of nirvana. Nirvana is a mystical belief for yours, I presume, that I consider to be nonsense. Unless by nirvana, you simply mean death. But then your sentence doesn’t make any sense to me. Perhaps you would be better off directing your question here.

“In any case, we get back to Don’s original point of ‘his’ money being spent by polticians. The money can only be his if there is a government with a monopoly on coercive force in existence to defend private property rights.”

But clearly not even a mystic such as yourself can believe that. Property is ubiquitous throughout history with or without any kind of overlordship. And in spite of Marxian dreams, it always will be. However, what is true is the converse of what you said: a government guarantees the LOSS of property rights. There certainly is not, and probably never has been, a greater violator of property rights than governments. The US government is definitely no exception.

anthonyl September 26, 2011 at 9:33 pm

Living in a violent, dog eat dog world, are we?

Cameron Murray September 27, 2011 at 12:28 am

I hope that’s sarcasm, not ignorance.

muirgeo September 25, 2011 at 11:58 pm

“I fault him because he proposes that millions of people be forced to fund things that he does not risk significant amounts of his own personal funds to finance.”

Don

He represents hundreds of millions of people and was democratically elected to do so. Many of those hundreds of millions of people believe green energy is the way to go for our future. And many of those millions of people don’t believe market forces alone will get us to that green energy future because the fossil fuel industry controls the nature of our energy policy and is itself heavily subsidized.

From a Rasmussen poll;

Sixty-three percent (63%) believe investing in renewable energy sources is a better long-term investment for America than investing in fossil fuels.

http://www.rasmussenreports.com/public_content/politics/current_events/environment_energy/energy_update

If President Obama wasn’t pushing green energy he wouldn’t be doing his jib. Fortunately, not ll of us pour trull believers of the infallibility of markets… and our constitutions set up so ALL people are represented not just the “believers of markets”.

Libt September 26, 2011 at 7:15 am

A poll would probably also show that the majority of people would also like to get free money for doing nothing, how that somehow solves the problem of supply and demand is still beyond me.
If you want to turn the economy into a Spain which is in an utter hole, where fools like you believe that the laws of physics are trumped by the laws of politicians, then spend your OWN money, not my money on it !

muirgeo September 26, 2011 at 9:07 am

You are fooling yourself if you think market forces created our current energy policy.

And if you want to believe stupid things fine but those of us who don’t believe stupid things have a democratic right to oppose the fossil fuel monopolies, their lobbyist, their rent seeking and their massive subsidies and their unpaid for externalities.

SweetLiberty September 26, 2011 at 10:22 am

Muirgeo,

Would you vote to give up Solar, Wind, Ethanol, and all other energy subsidies if fossil fuels were no longer subsidized? I would.

Fred September 26, 2011 at 10:38 am

You’re deviating from the straw man narrative where libertarians are in the pocket of Big Oil, evidenced by their skepticism if AGW and their opposition to “green” subsidies.

Your saying you would vote to end subsidies for Big Oil goes against the very premise of his argument.

SweetLiberty September 26, 2011 at 10:52 am

Fred,

Now let’s not go too far here. I’m perfectly willing to consider any serious offers Big Oil is willing to make to me personally. Let’s start the bidding at $2 million and see where it goes…

Fred September 26, 2011 at 11:11 am

I see. You’re carrying Big Oil‘s water in hopes that they’ll reward you.

That fits into the straw man narrative.

Carry on.

SweetLiberty September 26, 2011 at 12:11 pm

No, no, Big Oil must reward me first – and then I’ll carry their water.

In all seriousness, I don’t believe in any government subsidies for energy – oil or otherwise. I can’t fathom how government Constitutionally justifies such subsidies (unless it’s via the ubiquitous and omnipotent “Commerce Clause” which, as we all know, grants government free reign over everything).

Fred September 26, 2011 at 12:14 pm

The purpose of subsidies is to protect politically favored actors in the market from becoming victims of creative destruction.

The Constitution has nothing to do with it.
It is pure corrupt crony capitalism.
Nothing more. Nothing less.

vikingvista September 26, 2011 at 8:27 pm

“The Constitution has nothing to do with it.”

Other than creating the undefiable monopoly institution that is such a magnet for cronies and the power hungry politicians who both serve and extort them.

muirgeo September 26, 2011 at 10:17 pm

“Would you vote to give up Solar, Wind, Ethanol, and all other energy subsidies if fossil fuels were no longer subsidized? I would.”

That’s a very fair question…. because things are so lop-sided right now I’d say yes. And because we are so dependent on fossil fuels I’d say… much as I dislike our dependence… that you’d have to slowly phase out the fossil fuel subsidies because to do it too quickly would cause economic chaos as the price of gas would skyrocket.

Of course a detailed discussion of what counts as a subsidy would be not so simple or easy to agree on.

brotio September 28, 2011 at 1:03 am

You are fooling yourself if you think market forces created our current energy policy.

Of course market forces didn’t create our current energy policy, you muirdiot. Governments create policies; marketeers try to figure out how to best cope with those policies.

Fossil fuels dominate as an energy supply because only uranium packs a bigger BTU wallop-per-pound, or per-cubic-inch, or by any other measurement.

Fossil fuels are also more portable than other energy supplies. Invent a battery that will take you as far as a 12-gallon tank of gas, and recharge as quickly as you can refuel that tank, and make it as affordable as an internal-combustion engine, and you’ll be on the path to replacing gasoline as a fuel for personal transportation.

anthonyl September 26, 2011 at 9:47 pm

You just made Don’s point.

brotio September 26, 2011 at 1:15 am

If President Obama wasn’t pushing green energy he wouldn’t be doing his jib. Fortunately, not ll of us pour trull believers of the infallibility of markets… and our constitutions set up so ALL people are represented not just the “believers of markets”. – Cardinal Yasafi Torquemuiduck of The Church of Anthropogenic Global Climate Change

Tonight is the measure of whether the country begins, in the state of Wisconsin, a national drive to push back, or whether we have more to go to build a movement of resistance. But resist we much . . . we must . . . and we will much . . . about that . . . be committed – Rev Al Sharpton of The Church of Kill Whitey

ArrowSmith September 26, 2011 at 1:26 am

It’s not the President’s job to push any kind of “energy” you stupid fucktard.

Doc Merlin September 26, 2011 at 5:09 am

“he knows nothing about finding investors willing to stake their own funds”

This I disagree with. Obama is a master fundraiser.

Methinks1776 September 26, 2011 at 10:44 am

Right. He’s successful in getting buyers for the stolen property he’s promising them.

If he can raise capital for a start-up, then you will be correct.

John Dewey September 26, 2011 at 10:19 am

I dislike Jimmy Carter today, though I still greatly appreciate what he did by deregulating the ariline industry in which I’ve devoted most of my adult life.

Based on what I’ve read, I think Jimmy Carter intended to return to the peanut business after his presidency was over. He was a successful businessman in this industry, the one he knew far better than any other.

Jimmy Carter had placed his peanut business in a blind trust during his presidency. That business had been flourishing prior to 1976, but, unknown to Carter, had been badly mismanaged while he was in office. Upon returning to Georgia in 1981, Carter discovered he was $1 million in debt. He believed hius best option at the time was to sell that business, and he did.

As much as I dislike many of Carter’s actions during and after his presidency, I will give him credit for not using his influence as president to benefit the business he still owned.

Don Boudreaux September 26, 2011 at 10:21 am

True dat, John. But Carter knew nothing about synthetic fuels in particular, or the energy industry in general.

And I agree that Carter’s accomplishments on the deregulation front are sadly overlooked.

John Dewey September 26, 2011 at 10:30 am

I agree that Carter was and is clueless about the energy industry. I posted this comment about Carter because I wanted to contrast it with the LBJ comment I just added.

Just so we’re clear, I believe both men have harmed the U.S. economy. But LBJ was the professional and Carter the amateur at government interference in markets.

Don Boudreaux September 26, 2011 at 10:36 am

Yup.

Robert Caro well and truly documents LBJ’s ruthlessness.

John Dewey September 26, 2011 at 10:27 am

LBJ was the opposite of Carter with respect to using his political power for economic gain. LBJ and Lady Bird used his power as an elected offical to first buy radio station KTBC and then “persuade” William Paley to make the station a CBS affiliate.

Later, in the 1950s, the FCC, at LBJ’s urging, granted a single television license to the Austin area. Amazingly, Lady Bird Johnson was the sole applicant for that license (everyone else knew it was pointless to bid). The Johnson’s became wealthy from their TV station, and LBJ regularly summoned CBS executives to the White House when he wished to discuss the relationship between CBS and KTBC.

It should be no surprise that LBJ exited the presidency much wealthier than Jimmy Carter did 12 years later.

Josh September 26, 2011 at 10:47 am

Running a charity means you are not a bum. Clinton is advising Haiti’s leaders on good governance and public policy. He is doing immesurable good for those people.

Further, many people are willing to pay top dollar for excellent public relations and communications experts in order to advance their interests. Most ex presidents work very hard and are sucessfully self employed.

kyle8 September 26, 2011 at 6:43 pm

If Mr Clinton is advising the leaders of Haiti, then I do not expect they will have any positive change in the quality of their governance.

ArrowSmith September 26, 2011 at 10:57 am

BTW my previous “rude” comment directed at muirduck.

KC September 26, 2011 at 11:24 am

A few years ago there was a report that there was ONE sit-down restaurant in all of southeast Washington, D.C. (Denny’s, I believe, the rest were take-outs). I said on the radio at that time that Marion Barry would probably help southeast D.C. restaurants more if he gathered up investments to open a chain of high-quality restaurants in the area rather than remaining in office.

KC September 26, 2011 at 11:26 am

A few years ago there was a report that there was ONE sit-down restaurant in all of southeast Washington, D.C. (Denny’s, I believe, the rest were take-outs). I said on the radio at that time that Marion Barry would probably help southeast D.C. RESIDENTS more if he gathered up investments to open a chain of high-quality restaurants in the area rather than remaining in office.

Josh September 26, 2011 at 11:36 am

I’ve never been there and I thouroughly doubt that is the case

KC September 26, 2011 at 11:41 am

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/12/AR2007041202376.html

Campaigning in Ward 7, Sunny Side Up
By Nikita Stewart
Washington Post Staff Writer
Friday, April 13, 2007

More than 70,000 people live in the District’s Ward 7 .

There’s one sit-down restaurant: Denny’s.

Not that there’s anything wrong with the 24-hour diner, which serves up crispy bacon and juicy sausages in its Grand Slam breakfasts and keeps the refills coming in bottomless cups of coffee.

Dan J September 27, 2011 at 1:18 am

As if Berry really gave a crap. Like Coleman Young of Detroit, he only cared for the easier money taken from taxpayers.

KC September 27, 2011 at 1:57 am

Dan J, one day I was at a D.C. event, ladies were gushing over Mayor-for-Life Marion Barry, I mention to him that it must be nice to be loved like that. He said something like, “Young man, that’s e-a-r-n-e-d.”

I then said, “Yeah, I only give out my own money. I’m sure I would be much more loved if I gave away other people’s money.” He then tried to lecture me about the beauty of public service.

Dan J September 27, 2011 at 2:20 am

Kirkpatrick was another gem in Detroit.

Feeding at the public trough known as the treasury…….

anthonyl September 26, 2011 at 12:18 pm

Their productivity comes from the marketing of ideas.

Vance September 26, 2011 at 5:52 pm

George McGovern opened a B&B, I believe in Vermont back in the 80′s eventually he had to close it. I remember reading some comments he made about not realizing how burdened small business owners are by regulations & he said the experience had been eye-opening. Maybe it should be a requirement before you can be president to operate some small business.

John Dewey September 26, 2011 at 7:31 pm

Thanks for reminding me of McGovern’s epiphany after the failure of his Stratfor Inn in Connecticut. Here’s an excerpt from <A href="http://www.forbes.com/sites/bruceupbin/2011/06/14/how-to-create-jobs-by-george-mcgovern/"<"A Politician’s Dream Is a Businessman’s Nightmare”, by George McGovern, WSJ, June 1992:

In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn’s 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender. … To create job opportunities, we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities”

Dan J September 27, 2011 at 1:14 am

Indeed, the advocates of govt dollars to support and subsidize ventures is because the individuals will not risk their own capital. Assuming many don’t have the seed money needed, they neither can find willing volunteers. People know bad sells when their own properties are at risk.

Jeff Perren September 27, 2011 at 12:07 pm

“Will he found and run a health-insurance company? How about a ‘green’ energy firm? ”

Hahahahhaha! Barack Obama run a for-profit enterprise… that actually turns a profit? Now, that would be a real Progressive miracle.

JVDeLong September 28, 2011 at 11:31 am

They do go into a profit making business – influence peddling. For example:

“The Albright Stonebridge Group is a global strategy company led by former Secretary of State Madeleine Albright and former National Security Advisor Samuel Berger, and former Senator Warren Rudman. The firm is headquartered in Washington, DC with offices or staff in Beijing, Shanghai, São Paulo, New Delhi, Madrid, Berlin, Sydney, Thailand and Moscow.”

It has now added Carol Browner, ex-WH energy czar, and true green fanatic.

Would anyone go to any of these people for their analytical talent or shrewd perspective on the nature of government? I rather doubt it. But foreigners in particular will buy their access.

Don Boudreaux September 28, 2011 at 11:40 am

Yup!

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