Conard’s upcoming book justifies uninterrupted income grab by the people who caused the mess.
Edward Conard’s soon-to-be-released book is Unintended Consequences, Why Everything You’ve Been Told About The Economy Is Wrong . The New York Times devoted many pages to Conard and his book with a featured report by Adam Davidson in its Sunday Magazine (2012-May06) and devoted many pages.
I though the NYT coverage was pretty sympathetic, Conard considered it a hit piece.
I have not yet read the book because it will not be available until June 7. But important points were made in the NYT and on Conard’s website.
Anecdotes are snapshot analogies taken from our current situation and selected for a reason. Although sometimes used for humor, they are most important when people make political points with them, as when Pres Reagan made them the foundation of his reasoning. Although Unintended Consequences is apparently chock-full of these things, we will only discuss Job Creators, Food Supply, and Investment Policy. At the end, Conard’s advocacy of current investment practice will be discussed based on the point that the current social situation arose from the American Income Pump that has operated for 3 decades.
Snapshot of Job Creators: Conard asserts that society benefits when investors compete successfully. This is pretty uncontroversial. Examples are not so clear: Sergey Brin founded Google and we all benefited; Jobs and Wozniak succeeded with Apple, Gates with Microsoft, Bezos with Amazon. All these are poster-child examples, true success stories in which we all shared, at least initially.
Competition generates great progress while it happens. But, when one participant gets more income than the others the play morphs into the game of Monopoly®; the player with the most cash acquires or terminates the others. Our poster-child companies have bought or suppressed their foes. All these companies seem moving toward increased exploitation of their customers, the ways traditional monopolies manage the prices of their controlled commodities.
Romney bragged that he was a job generator with Bain Capital, right along with Ed Conard. The blog PowerLine made a basic point:
“Ultimately, of course, Bain was not in the business of creating or destroying job; it was in the business of maximizing financial return to investors.“
Happy investors make more profit for management. Takeovers or restructuring that move jobs from US to China (as in Apple’s factory moves), are frequently listed on the (+) side. Jobs eliminated when a company is closed and assets sold, or jobs actually retained due to a benign takeover – these are not of concern to investment companies.
Snapshot of food supply: Conard uses farming as a 65 year demonstration in making life easy for all because food prices have steadily fallen.
Agri businesses certainly have become more efficient. Over the past 30 years, family farms have been systematically replaced by corporate farms working hard to optimize efficiency. Efficiency means mono-culture planting (hectares of the same variety of crop). Efficiency means GM crops that can exude their own pesticides, or it may mean application of high levels of external pesticides, or both.
For meat production, efficiency means penning the animals in spaces where motion is difficult to impossible, letting them stand in filth. Of course efficience means keeping them loaded with massive antibiotics.
Efficient food manufacture has been very successful at reducing prices to historical lows; Conard is pleased by it.
All these efficient practices are generating “super” pests – the immune descendents of survivors of our eradication efforts. Interesting to note here that the Green Revolution of the 1970s is starting to fail. There will be trouble if it does.
Manufacturing centers that prepare our foods for family and restaurants efficiently deliver low doses of pesticides and antibiotics to consumers in the food stream. They are good vectors for contaminants or future “super” infections into human populations.
A second-level path to cheaper food bypasses U.S. food production regulations. Just import from countries with zero regulations. Import regulations might have limited success until some elite administration stops enforcing them.
Snapshot of investment policy: Conard speaks a lot about investment practices. He proclaims opposition to the excesses identified with our crash, but it all has a hollow ring when he comments that problems only come up when people want their money back. “Traditional” banks should not be stopped from speculating every single dollar placed in their care by the public.
This week, JPMorgan Chase admitted to massive new losses from destructive investment practices. The irony lost on no one is that CEO, Jamie Dimon, (one of the American ultras), has been fighting investment regulatory controls meant to protect investors from the same class of losses. Per Dimon and Conard, banks that are “too big to fail” deserve the right to engage in any slick action they want, and when they fail, the public should be obligated to use tax revenue to to bail them out. The leaders, of course, need huge and monstrous bonuses more than ever when that happens because things are tough during failures, and they (top management) get awfully stressed, really tensed up. Canard says it is a shame these boys can be so bad, but we must ignore that behavior and bravely move on, down that same banking path.
Nathaniel Popper published a May 6 report in the New York Times; his secondary topic was that the investment environment is predatory. The volume of trading trasactions in the stock market is half that seen in 2008. Normal traders are making fewer transactions and high speed trades (from rapid-response investors using computers) have also dropped. The problem – rapid traders only work against normal humans, not other rapid guys. If two rapids were to fight, the winner would be the one with the better network connection. No fun there. Usually, mundanes have no chance against rapids.
Name calling: Conard invented a new put-down for the non-rich. He calls them “art history majors” because, is there a more useless a segment in a useless liberal arts education? Ayn Rand called most people moochers. In science fiction genre literature, we call them mundanes (the dead heads, as opposed to elite psi talented folks). Conard uses art history major as I use MBA graduate.
In college, Conard should have learned analytical thinking instead of the basic mechanical tasking (as seems to be all he got from his engineering degree). But he did follow up with an MBA.
Anecdotes are not good evidentiary data: Put a group of ideologues in a room and they will spin snapshot examples against each other for hours. Conard twists the illumination on current issues to highlight the success of our aristocracy. He can discount vulnerabilities that could generate problems as easily as experts discounted nuclear disaster scenarios in Japan – clearly ridiculous, until a Fukushima event happens.
The American Income Pump invalidates the examples
A mysterious process (LastTechAge calls it the American income pump) was turned on about 1981. The income pump is the process that has sucked household income from the lower earning parts of the total U.S. pool and poured it into the hands of the wealthiest households. Clicking on the link to find more or the button in the ribbon bar (banner picture). The income pump has been responsible for many things.
This next anecdote can easily show that our the monopoly driven ultra rich are needed to make things happen.
Conard might argue— since we have decided to not go into space, only Elon Musk’s SpaceX or Jeff Bezos’ Blue Origin, or Robert Bigelow’s Bigelow Aerospace will maintain an American presence. Or Boeing, or ATK or any of the other competing private efforts.
And, in fact, we really should wish our American aristos success This is because for the past 3 decades, the Income Pump sucked away NASA funding from its own outstanding programs by stripping the US Government of its cash resources for innovative things. So the effort that shifted excess money to the uppers generated the reason for cheering them on. The cash has been pumped out of the tax base (the lower 4/5ths of the population) and into the topmost 0.01% of all households reporting income. The Privatized Space issue is complicated, as they say nowadays. We will cover it in future posts.
Space is just an example. In light of the income pump, Conard’s case implies this premise: The current manipulated situation justifies its own continuation. Or … yes, we have stripped you guys of your ready resources; if you want anything now, you must continue to support our grab for even more wealth.
Conard treats Americans as moochers, mundanes, art history majors. We, the citizens of the country, will maintain descent down this path if we continue to listen to arguments such as these.
We are perilously close to the true trickle-down scenario of Mozart’s day (for example) when world-class, even history-making talent had to rely on bored patrons in order to produce. Question for today: How many potentially outstanding contributors to the human race are unknown because they never found a patron?
I have understood The American Dream to be about a country where all people can realize their own potential. Because of the active income pump, if we follow men like Conard, we may never be allowed to personally dream again.
Charles J. Armentrout, Ann Arbor
2012 May 16
Have a comment? Click on the title of this post, go to bottom, let us know.
Listed under Economics …thread Economics > Inequality
Related posts: Click the INDEX button under the Banner picture