The Things Obama Says….
This recent speech from President Obama really bothered me. Specifically, two big things jumped out. I’ll dive in briefly:
1) The first comment that bothered me was this one which implies that the Clinton surplus was a good thing:
“So I’m going to reduce the deficit in a balanced way. We’ve already made a trillion dollars’ worth of cuts. We can make another trillion or trillion-two, and what we then do is ask for the wealthy to pay a little bit more. (Applause.) And, by the way, we’ve tried that before — a guy named Bill Clinton did it. We created 23 million new jobs, turned a deficit into a surplus, and rich people did just fine. We created a lot of millionaires.”
If you just finished section 6 in Understanding the Modern Monetary System then you understand a lot more about the monetary system than Barack Obama. Because once you understand sector balance economics you understand that the three sectors (public, private and foreign) must always add up to zero. So, since we have a foreign sector that equates to a 4% demand leakage, and a public sector that is running a 8% deficit that leaves the private with a 4% surplus. Not bad. But it’s also obviously not great since the private sector remains burdened by excessive debt and is trying to crawl out of this debt hole.
More frightening is the idea that getting back to a budget surplus is somehow a good thing. As if the government needs to “tighten its belt strap” just like a household does because it might go bankrupt. Of course, the government doesn’t have a solvency constraint so the entire analogy is void of value. So when the public sector gets back to that surplus range we end up having a 4% demand leakage from the foreign sector and a 4% deficit for the private sector (see the image below). This is precisely what led up to the crisis and helped contribute to the current economic malaise. It is not what we need right now! In a deleveraging cycle within a nation running a trade deficit the private sector needs helps deleveraging. And since the public sector has no solvency constraint it is the only sector that can provide the deficit that is necessary to ease this burden. Otherwise, we risk repeating the mistakes of the late 90′s that caused this whole mess to begin with!
2) The second part that irked me was this comment:
“There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”
Again, if you just finished reading the MR paper then you understand economics better than President Obama. You know that supply and demand are two sides of the same coin. You know that there can’t be a growing economy without strong demand for goods and services. But you also understand that better goods and services don’t just magically appear from nothing. Yes, we are all in this together and we all rely on one another. There is no such thing as someone who is purely “self made”. But let’s not go on saying crazy things like “If you’ve got a business — you didn’t build that.” Only a man who didn’t ever build a business could say such a thing. Because building a business is hard work. I know. I am in the process of doing it right now. Somebody else doesn’t make that happen. Somebody else might have helped make that happen. But somebody else didn’t make that happen.
If you’ve digested this piece you understand how entrepreneurs are the backbone of our economy. They take risks in the desire to generate a profit that streamline our economy. Essentially giving us more time to do more things by making our lives more efficient. This creates more demand in the future, improves living standards and helps us grow the economy (and yes, it helps create jobs!). And it takes someone with initiative, vision and the desire to take on that risk to build a business. Yes, I am building my company with other people, but it’s my vision. It’s me who is taking the capital risk. And that’s how the process of entrepreneurship works. Of course we rely on the demand of customers and we need help in many different ways to build that vision. But ultimately it starts with that person who is willing to take the risk to offer goods and services that will hopefully be in high demand. If what I build fails then I am the one who takes the loss. Not the government. Not society. Me. So it’s wrong to say “you didn’t build that”. Because I am building that. And if it comes crumbling down I am certain that Obama will not say “well, we built that so here’s a bailout for your efforts”. No, I will be crushed. More importantly, it’s damn hard work and it costs a lot of money and it’s an enormous risk. I’m not the first person who has gone through this process and I am certainly not the most innovative or important entrepreneur (far from it!), but it’s patently absurd to downplay the importance of the entrepreneur in our economy or imply that there isn’t a large degree of individual drive, motivation, initiative and creativity that goes into the process of evolving an economy. Yes, we’re all in this together, but without this individualism we’re destined for stagnancy in living standards.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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78 Comments
Cullen, Amen. First time commenter here, but I’ve built and since sold a moderately large company. It was my vision and my drive that built that company. I was fortunate to have great clients, great employees and great advice along the way. But it was me who built that company from the ground up. Not the government. And not someone else. So your comments really resonate with me. Thanks for all you do here.
Thanks Samuel. It seems to me that the only people repeating this line are academics, politicians and other people who have never taken on the risk involved in starting a company. Anyhow, I feel like I am ranting. Sorry.
You should take this ENTIRE post down. Classic example of the media completely manipulating someone’s words.
“…if you leave out the sentences directly before and after, which make it crystal clear Obama wasn’t talking about building businesses at all. The “that” in “you didn’t build that” referred to roads, bridges, infrastructure, education, emergency services and law and order — all services that protect and enable business owners along the way toward creating a successful operation.
“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.
Jay, this seems pretty cut and dry to me:
Maybe he didn’t mean that, but he said that. There’s no misconstruing that sentence. I voted for Obama. I’ve praised him at times and I’ve been critical of him at times. Generally, I think I’ve been fair with him and apolitical. And I am reading this for what it is. He said “If you’ve got a business — you didn’t build that. Somebody else made that happen.” Maybe his speech writers should tighten up the language next time if they don’t want this stuff taken out of context. It seems pretty cut and dry to me though….
I gotta agree with Jay here, it seems pretty clear that when taken within full context he’s talking about the benefits of doing business within the American system because of things like roads, bridges, the internet…things that facilitate the creation of new businesses.
Okay, I see how I might have misread that. Maybe he didn’t mean it the way it sounds. I think maybe he meant that the road wasn’t built by the business owner and it comes out sounding like the business owner didn’t build his business. Time to fire an Obama speech writer and maybe the author of this post.
The general sentiments still stand and I think Obama is still taking his “the government builds stuff” idea to an extreme. This economy and the living standards its achieved were mostly built by the private sector. Not the government. And his surplus comments in section 1 are just flat out wrong.
I don’t see Obama taking his “government builds stuff” to an extreme but if it appears that way to some then perhaps the reason is the extreme “government is bad” view and what it takes to correct that view. We can all agree that too much government is bad but like it or not there is no else to invest in infrastucture and because it just isn’t good business there is no else with enough capital to invest in the next big thing like the internet or space exploration. Even musk agrees.
http://www.thedailybeast.com/newsweek/2012/05/20/elon-musk-shoots-for-the-stars-with-spacex.html
It seems like all he’s asking is that business owners give a little extra to be able to utilize all of that.
Absolute rubbish. Any rational human being who watched his speech (as I did) knew he was plainly referring to the things he’d just reeled off: the teacher, the infrastructure, the emergency services, technological contributions.
I agree you’ve been completely fair w/ Obama and am not accusing you of anything other than that, but I’m surprised you fell for this “you didn’t build that” hogwash.
Obama’s term has been completely underwhelming and he doesn’t deserve to be re-elected in my opinion(unfortunately the alternative is inept as well).
See my comment to PI. I can see how I might have misinterpreted this. But I still think he’s emphasizing all the wrong stuff.
You didn’t misinterpret anything. You’re just finally seeing Obama for what he is. He’s a political hack who thinks government can fix everything.
Sure SS- so when Romney said “I’m not worried about the poor” what he meant is he doesn’t give a s*** about them right????
If you’re happy taking something that Obama clearly didn’t intend to say, and sure as hell doesn’t mean, then I hope about I mist the NUMEROUS statements and actions from Romney proving that he is a dog torturer, likes firing people, thinks $350k in speaking fees is “nothing”.
One misstatement from Obama vs. dozens, if not hundreds from Romeny, and you guys finally have your “proof” that he is what you’ve been claiming. What a joke
But you are emphasizing a single sentence out of an entire speech, which clearly opens you to the charge of “quoting out of context”. Taken alone, the wording of the sentence is unfortunate and arguably careless. I imagine it was off-the-cuff and not scripted. But beating the man to death with it is classless, because the rest of the speech makes the intent of the communication clear, an intent that was hardly defined by the unfortunate sentence.
I think that’s the problem though. It’s not just one sentence. There are multiple points where the speech is not just wrong, but terribly wrong. No commenter has even touched on the far more dangerous and important comments about the Clinton surplus. The President obviously thinks that’s a goal worth aspiring to. And it will crush this economy if he allows it to happen. So no, I am not just beating him to death over one sentence. The much more important point in this post is being entirely ignored by readers. Maybe I have entirely misconstrued that one sentence. If you think so then I apologize. But he deserves to be criticized harshly for the Clinton comment. It is wrong and very dangerous.
It’s also roughly 100 days prior to an election. Many … well, let’s say “volatile” minds out there are very concerned about what? The deficit, maybe? You expected him to explain how borrowing even more money would be a good thing, right? You expected him to say something that would bury him with the great unwashed, other than bury him with wonks. Okay.
Well come now Lance. He could do worse, couldn’t he? He could have pulled a Romney and taken everything he actually believes and then run on a platform that is 180 degrees different than many of his past positions.
Maybe he really believes the Clinton surplus is good. But I doubt it. Personally, if I were the President I’d pull a G Bush Sr, whip out the old white board and have a heart to heart with America and explain why we shouldn’t be scared about running out of money. It’s not that friggin complex. And it’s better than lying perpetually. But I don’t think they understand how the system works so they spread myths instead.
I touched on the “surplus” comment below. The fact is that the budget the GOP all back is one gigantic debt fear mongering document, and they fear monger about the debt/deficit every single day. Do you honestly expect Obama to explain MR in response???? Also, did you notice Obama never talked about raising taxes on the rich until after OWS got income and wealth inequality into the mainstream? So does he really want to raise taxes on the rich, or is this simply his response to the daily drum beat of anti-MR statements from the GOP including Romney????
So Obama touted the “success” of another Dem President…. so what? The GOP says deficits are bad – so Obama points out that only a Dem president did anything different. That is what politicians do. I mean you can’t convince with Bond Vigilante or Paul Krugman that MR is right – so how on earth is Obama supposed to do it for the masses????
And does the GOP really believe a surplus or balanced budget is the way to go???? Evidence of the past 3+ years says yes – they started the debt ceiling debate, they blocked every spending bill they could, they all exclaim that the stimulus didn’t work, etc, etc, etc. Their words are backed by actions.
Sure, under Bush the GOP ran up deficits. But they have disavowed Bush like he has leprosy, and they won in 2010 by promoting auterity. Look no further than Scott Walker and how proud they are of WI.
Do I know that Obama doesn’t realize surpluses are stupid? Of course not. But does Romney? We have track record vs. rhetoric. Record of deficits vs. support for an incredibly destructive budget, with a loud and vocal base that thinks that gov spending kills private investment, and the magic elixir is to cut gov spending and the private sector will magically take off.
I’m taking my chances with his record, not what he tells the clueless public who have been taken in by the GOP’s lies about the debt/deficit.
Bingo. He’s not spreading myths, but he’s not going to take on ingrained economic mythology in an election year. He has to win the middle to prevail, and polling shows the middle is quite muddled about government spending. Educate enough of them in 100 days to be able to speak frankly, and sensibly, and win? Where would you even start? The immediate tantrums from demagogues and ideologues would drown out any effort. It’s a fine fix we’ve gotten ourselves into, isn’t it?
@ Lance. “When it [times] get serious, you have to lie.” -Jean-Claude Juncker PM of Luxembourg
But corporate income tax and salary(from corporations) income tax makes up a tremendous portion of the federal tax dollars that builds the roads and highways.
Thats what he meant when he said 2 sides of the same coin. The government didn’t just volunteer to build roads willy nilly.
And businesses built the roads and the bridges, and the internet too, for the most part.
(In the case of the internet, the government did do the research that enabled it to come into existence.)
Like Cullen said, this is a very poorly written speech.
Jay surely you understand that it was the tax dollars of every small,medium,large business and the tax dollars charged to gas diesel etc, that paid for those infrastructures. The only thing the government did was collect the “tax” dollars and redistribute them to the construction companies that did the service, all the while fighting with some government bureaucrat.
The only reason I like the second comment is the psychological misattributions that accompany success, and that has led to a lot of poor political decisions. Probably also related to the rise of the Tea Party. I’m working on starting my own business as well, but at least I understand what a large degree luck plays into the success of a business.
Disirregardlessly*, his comments are poorly chosen.
*Not a real word (because someone always looks it up)
But it would be a mistake to misundersetimate* his intelligence.
Correction: ‘misunderestimate’ (unreal words require correct spelling).
If you are believer in MMR, and I am, then Obama appears to be the lesser of two evils. Because Romney will slash the deficit and government spending to a far greater degree than Obama would. This would exacerbate the balance sheet recession, throwing us into a real recession. Even if he wins, Obama won’t be able to get Congress to go along with all the tax increases that he might like to see.
I don’t know why others haven’t been more vocal about Romney’s background in PE (and need to pander to an extremist base) leading to aggressive cost-cutting tactics that throw the economy off the ledge.
Brian Lund’s got you beat on this one Cullen. His perspective is excellent (same conclusion). http://bclund.com/2012/07/17/dear-president-obama-thank-you-for-my-success/
Cullen, Poorly chosen words by Obama. Lets not make a mountain out of a molehill. It seems clear from his entire speech that the entire premise of the speech was that in order to build a successful business you need a supporting infrastucture as well. Or are you saying that if you had an idea to build an ipad you could have done it and made money without the internet, and without smart engineers?
Richard, I agree 100% that no one is purely self made. I say that in the article. I 100% agree that it takes a village to some degree. But a village needs leaders and people with initiative who push the village in the right direction. It sounds to me like he’s downplaying the role of risk takers and entrepreneurs in our economy. Maybe he doesn’t mean that, but he said it pretty plainly.
I disagree he’s downplaying the role of risk takers. From the speech
“The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.”
He’s trying to provide a reason why those who have a successful business should pay more and what you’re disagreeing about is his choice of words for the argument he’s using. Very poor choice of words is Obama’s problem in this case.
Okay. I see where you guys are all coming from. It’s just a mess of a speech. I listened to the audio and read the transcript thinking I had it wrong. And I still got it wrong. To me, it sounds like he’s downplaying entrepreneurs, but I can see how I might have misinterpreted. Sorry if I’ve misconstrued this. Not my intent.
You didn’t get it wrong. You’re the one who got it right when you said, “Somebody else doesn’t make that happen. Somebody else might have helped make that happen. But somebody else didn’t make that happen.”
In my opinion, Obama did not intend to downplay the role of entrepreneurs. Instead, he is trying to build a philosophical foundation for why we should tax the incomes of successful people who make more than $250K at a higher rate than those who do not. In the past, he has made a lot of supportive remarks in support of the entrepreneurs who have increased jobs and produced innovation and growth for our economy.
Obama thinks the government is the engine of growth. He thinks the government can lead and the private sector can follow.
“a village needs leaders and people with initiative”
You just described Obama – from nothing to President. The idea that he wants to “punish success” or make this a socialist country is utterly ridiculous. When someone points out a broken system, one that led to the greatest economic collapse since the Great D, and to the greatest income and wealthy inquality since the Great D…. is HE the one that is the problem?
This is the childish “he who smelt it dealt it” game that half the country is falling for.
I was being critical of his specific comments. Which I may or may not have misconstrued. Some people seem to think I did and others seem to think not. Personally, I think his comments were very poorly worded if nothing else. Also, I never said he wants to punish success or turn us all socialist. But I do wonder if his experience has not skewed his perception towards the idea that govt can solve our problems most of the time? There’s a fine line between thinking of govt as a facilitator and thinking of govt as the driver. I wonder if he doesn’t veer too much towards the latter. And I think that’s a fair and valid critique of his thinking given some of his comments at times.
This whole speech is an excuse to tax the wealthy. Obama is trying to claim that since the government built some roads and helped invent the internet that that somehow justifies taxing the rich substantially more than everyone else. The whole speech is political BS. He’s just playing to populism.
“substantially more LVG”. Really? How are they being taxed substantially more? Tax rates have been going down for decades. And the richer are richer then they’ve been in 80 years relative to everyone else. If it weren’t for the fear mongering by the GOP over the debt/deficit, then Obama would have ZERO pressure to raise taxes on anyone. If it weren’t for the GOP blocking EVERY spending bill except the original stimulus and extension of UE benefits, the deficits would be higher, and we’d have more jobs and GDP growth. So if the GDP wants to fear monger about spending – and their only solution is to cut into medicare, and education, and the EPA- that WTF is Obama supposed to propose?
+ infinity
Yes, Obama deserves a huge amount of credit for fighting for larger deficits. He even fought for the Bush tax cuts last year!
The top 0.1% pay more taxes than the bottom 80%. The top 1% pay almost 40% of all taxes. Who do you think funds most of the things that get done by the government? Not the middle class.
If the top 1% end up making 100% of the money, they will also pay 100% of the taxes…. and you’ll think this is unfair to them.
This is simple math – if you destroy the middle class and their ability to pay taxes, the total percentage of taxes paid will come from the ones who have money. Doh. The pseudo-logic that fuels the Right’s arguments is mind boggling dumb, and yet 50% of this country is falling for it
I want to be hangemhi’s friend. Respect.
The way this comments section is going I might be the guy who needs friends after all is said and done!
Haha, indeed. GIves you a taste of why congress is so despised and inept. I can only imagine how toxic that environment must be. Yeesh.
It’s why I try to generally avoid politics here. It’s a lose lose. Better to stick to the sound economics of it all and let the politics be settled elsewhere. Anyhow, sorry to let the conversation devolve. I hate to see that happen here.
Yeah, the guy who is trying to jam socialized medicine down our throats is in love with entrepreneurs. Please. Only an Obama supporter could try to misconstrue this speech into meaning that he loves entrepreneurs. Obama thinks government is the solution to all of our problems.
Yes, this certainly was a rant.
I don’t know why anyone would bother to listen or read the speech of the president.
The interstate highway system was funded by taking money from citizens and handed out to the states who paid contractors to build the roads. The only thing the government did was collect the funds and decide how they would be handed out. Americans built and funded those roads. Not the government. In fact, the only reason the interstate highway system even came into existence was because the auto manufacturers lobbied for its creation.
They didn’t build that? Who does Obama think built those roads? Where does he think the money came from to build those roads? The government took the funds from the private sector (the rich paid 90% of the taxes back then) and built those roads. So yes, they did build those roads.
I think the message he is trying to convey is that no one builds things without the help of society. Personally, I think the message is a mangled mess and it’s communicated so poorly that it’s easy to misconstrue (I probably did to some degree). But he’s gotta be careful about these kinds of generalizations because they’re easy to misconstrue and they come off sounding very bad. I read this 10 times and listened to the speech and I still thought he was saying that individuals don’t build businesses even though he meant they didn’t build the roads.
The surplus comments are more interesting to me because they speak to his lack of understanding about the economy. But they’re not as sexy so no one wants to talk about that.
Cullen, the only reason Congress does most of the big projects in this country is because private corporations lobby them to do them. Then they take money from the private sector and reallocate it while paying themselves a fee on the side. In the case of the interstate highway system they were lobbied by the car makers to build the roads because it would increase profits for the car makers. So the government went and taxed the rich (who paid 90% of the taxes back then) and redistributed the funds for the roads to be built. When Obama says “you didn’t build that” he is flat out wrong. Without private sector funding from the same people he wants to tax those roads wouldn’t even exist.
Greg, one of the key pieces of my work is that a healthy society requires a healthy private sector as the driver of growth. Government is a facilitator. I say this many times in my big primer. Don’t get me wrong here….
Not to support or detract from the President’s speech the other day, but I think people are taking his statement about, “not building that” out of context. It appears he may have had a syntax error? I think he meant the roads or bridges were not the product of the individual not the entrepeneurs business!
Anyone who’s not sure what he actually said, or actually meant, might like to watch the 2 minute video segment.
http://www.youtube.com/watch?v=192oEC5TX_Q
;o)
I agree with his general sentiment that no one is purely self made. But upon watching that clip again I really do think he has a skewed perspective on this. Not only are his comments on the Clinton surplus 100% wrong, but he seems to be trying to imply that the govt built all these great things that allowed all the entrepreneurs in this country to thrive. So he cherry picks a few things to prove his point. And this might be true to some extent, but only to some extent.
Not sure who “Jay” is but obviously he knows this was one of the dumbest things ever uttered by a President of this country and he has to do what he can to engage in damage control. Along with “the Private Sector is doing fine” you really have to wonder whether the President has a basic grasp of the fundamentals levers of this economy.
“But let’s not go on saying crazy things like “If you’ve got a business — you didn’t build that.” Only a man who didn’t ever build a business could say such a thing.”
Listen to the speech, watch it, whatever, this is exactly what he meant and said. He doesn’t have a clue about how the economy works but the problem is that he thinks he does and also thinks he understands it better than anyone else.
There is no way this could not be perceived as an insult by people like me that risked everything to start a business and who are on the hook 100% for any resulting failure. The last person to get paid in any company when times get tough is the owner.
Only an cloistered, egg-head, academic would think this was an intelligent commentary on the way our economy works.
End of rant.
Here’s what he said:
“Somebody helped to create this unbelievable American system that allowed you to thrive. Someone invested in roads and bridges… if you’ve got a business, you didn’t built that”.
“THAT” is clearly the “road and bridges” and the “American system” not the actual business. If you believe ANYONE IN THE ENTIRE COUNTRY believes that the hand with the hammer didn’t hammer the nail, then you are a blind idealogue.
What he is VERY CLEARLY saying is that “somewhere along the line you got some help”. Your parents, your teachers, the Founding Father’s and our American system that “YOU DID NOT BUILD” yourself. Did you?? Did you build highway 80? Did Romney? Some of you commenters are saying private sector taxes paid for highways – fine – they did. But you didn’t. That was in the past, and TODAY’s multi millionaires are paying far lower taxes than they have in 80 years. Pointing that out is not “the politics of envy”. It is FACT. The uber wealthy pay 40% of taxes because everyone else is broke.
Meanwhile, the list of Romney gaffes is miles long…. and it takes 3+ years as President for you guys to find what is clearly NOT a teleprompter speech, and a misspoken flub taken out of context to “prove” something that not one person the world believes. I’m shocked that the smartest commenters I know anywhere on the web are so blinded by the idealogy that they really believe Obama is a closet communist.
And boo hoo that he mentioned Clinton and surpluses. EVERY SINGLE DAY the GOP mentions we’re going broke and the deficit and debt are killing us. Read Ryan’s budget for christ’s sake…. it is 99 page of fear mongering. WTF is the President supposed to say????? Try to explain MR to the masses when I can’t get it across to anyone outside of Pragcap… and Bond Vigilante still doesn’t believe it???? And Cullen and Steve Keen can’t get through to Krugman? Get serious. This entire comments section is a joke. I embarassed for people who I know are smart to come off this dumb.
Geez, I’ve spent years attacking Ryan, Boehner, Greenspan, Paul and others who called us bankrupt. And then I say one bad thing about Obama and now I am an ideologue and dumb? And the surplus comments don’t deserve a “boo hoo”. They are incredibly dangerous. 10X more dangerous than the “you didn’t build that” comments. And I’ve been very even handed about dishing out blame here. I voted for Obama, am a registered republican (though probably a centrist in reality) and have consistently criticized both parties over the years. I might be dumb, but I am not an ideologue.
Sorry Cullen – honestly I’m not calling you a “blind idealogue”. I’m replying to a group of comments, and the public discourse that is happening all over the web and media today. My “boo hoo” is also just me writing fast and furiously when I should be working… my point is that the GOP fear mongers about the debt/deficit every day… countering with a surplus argument is common sense in that regard. I’m educated by you on this subject, so I know better – but 99.9% of the population hear every day from the GOP that deficits are killing us, so of course he replies that way.
Either way, sorry if I offended you. That wasn’t my intention.
Trust me, I’ve been called much worse so don’t sweat it. But just a tip – even if you’re dealing with ideologues and you get frustrated with totally unreasonable people you lose the argument the second you start calling people names. Something to keep in mind. I’ve seen it too many times here and elsewhere.
All political comment aside, I think it’s going to be an uphill battle convincing people that the late 90′s were a period of mistakes. I get the sectoral balance argument that we were “spending down” our private sector account, but it’s not clear to me what could have been done differently given the environment.
I think some more analysis and another detailed article on this 90′s surplus might be helpful to readers, including myself.
Cullen, maybe its best you stick to economic analysis. For this article has prompted attacks from the left, right, and center; a truly remarkable feat. This merely proves, when it comes to politics, adults will revert to children; where everyone roots for, or against, their most favorite, or hated, team in the hopes of being the arguments “winner”.
***Disclaimer. This is not a knock against you. I admire you apolitical stance and balanced criticism of democrats and republicans alike. Your bias has never, as far as I can tell, infiltrated your articles, and I thank you for that. ***
As an aside I find it interesting that our president, who is supposed to be so eloquent, has struggled mightily in communicating his vision to the public clearly and effectively.
Probably a good tip. Thanks. I don’t generally wander into the realm of politics, but it seems like every time I do I get snapped in half by half the people.
Rarely does a major political figure have a good, solid understanding of economics or, although perhaps to a somewhat lesser extent, business. One needs only look at their educational background and subsequent employment history. Political Science and Law seem to be the most dominant themes for this crowd. One can only hope that their choice of advisors helps fill in the void. Obamas choice of Guithner, Summers and Bernanke should have told everyone all they need to know. The recent speech was little more then icing on the cake. The country chose a community organizer in 2008 and that’s exactly what they got.
I should probably add that I wasn’t exactly doing cartwheels over the nomination of McCain and Palin either. It’s kind of a downer to me that we keep ending up with these empty choices especially given the depth of competent people this country has to offer.
Cullen, I share your enthusiasm for the entrepreneur and all and I think they play an important part in driving growth and living standards. The question is how big is this role? Is their any proof of this very significant role you are advocating? Are not a majority of innovations today coming from big corporations and gov funded fundamental research?
You often critize people for not understanding the monetary system etc. and basing their views of what the economy needs on ideologies/politics. I do however feel that you might be doing the same mistake with putting the entrepreneur on a piedestal like this.
Would love to see you debunk this with an article about the role of the entrepreneur based on pure hard facts and numbers instead of “american dream” ideological arguments!
Love the site and the new design is great!
+1
With regards to government funded research, for a lot of scientists the government pulling funding for research was one of the reasons they ended up in the private sector, usually in the financial sector.
It’s pretty hard for a small business to get any idea on track as the big boys will screw you every step of the way, through litigation, patents and things like that. Then there is the government coming after you with rules and regulations a non-lawyer usually doesn’t understand. It’s an uphill battle. So it’s easier to come up with new products in a large corporation, but you won’t make any real money but at least you don’t risk bankruptcy.
As if the government only has their hands in Education and Basic infrastructure, I think when starting a business you’ll have to deal a lot more with the government than you’d like. I think you’ll have a hard time convincing anyone who is a net tax payer that he’s just paying for his share of the services he uses. Or that he’s getting his money’s worth.
It is also pretty simplistic thinking that higher taxes and more spending will lead to the expected outcomes. Take this example:
http://mercatus.org/publication/k-12-spending-student-oecd
And then see were the United States ranks in Maths and Literacy. There is probably a way to do this better and for less money (this is where capitalism excels).
Reply to Cullen Roche @ 07/17/2012 at 6:56 PM.
I’ve thought a ‘fireside chat’, or series of them, on this subject would definitely be in order – but not in the heat of a re-election campaign (maybe at the beginning of a new term, and especially with any return to ’08 style crisis mode.)
If we had a Fed Chair capable of ‘ordinary people speak’, in addition to ‘Fed speak’, that might also be an appropriate role for him/her to play.
(You’ve been honing your skills in this department, but I’m not sure we can wait for your first term in office.)
I lived in Washington DC for 25 years. You’d have to drag me kicking and screaming to go back.
Don’t worry. Obama has zero interest in balancing the budget. That’s just election year talk. After he’s elected he will continue to add to the debt. I hope you are right, that the government can carry $20, 25, then $50 trillion in debt, because that’s where we’re going.
I had a conversation about this last night with an acquaintance who is in the campaign business (mostly on the D side of the aisle). His take was that your first interpretation, Cullen, was probably correct. And he didn’t think it was poorly written at all, but actually a well crafted line.
It needs to be taken in the context of the current phase of the campaign. It’s still relatively early, and during this time, the candidates are playing to their bases. They need to get them pumped up, out in the streets recruiting friends, building internal momentum, etc, and most of all, still giving money.
The pivot to the center for both candidates will come in August or September, and the discourse will change then.
His take was that that line was a “dog whistle” to the most left leaning electorate. It was phrased in such a way that it could easily be interpreted multiple ways, so if it is jumped on by the Romney campaign (which appears to have happened), it can easily be explained away. In a way, it’s a political Rorschach test.
The real problem with Obama’s argument is that it is a STRAWMAN. He thinks that he’s running against Randian sociopaths who want no government at all (OK maybe you believe that, but only if you’re drinking the same Kool-Aid as Krugman). He is inventing an argument and then attacking it. It’s also a crappy argument to justify raising taxes.
Bingo. Obama is *always* fighting strawman.
Now he’s going around saying Romney wants to throw little old ladies out on the street.
during the GOP primaries there seemed to be a contest about who could claim they were going to fill the most departments…. and the Libertarian’s go even further, so as I keep saying… Obama is reacting to what the GOP says, he isn’t making new stuff up.
that would be “kill” the most dept’s.
as for little old ladies – haven’t heard the Obama comment you’re referencing, but the Ryan budget and GOP rhetoric wants to cut lil old lady beneifts while giving tax breaks to the rich. The fees that Romney jacked up as Governor, and his stated policies now aren’t friendly to anyone except the military, big biz, and the wealthy