Bacon's Rebellion

Democracy Thrives in Sunlight

Death to Dead Ideas!

—

by

James A. Bacon
in

This isn’t terribly Virginia-specific but I thought I’d share it. Just heard NPR this morning talk with Matt Miller, a Fortune magazine columnist who has written a book titled “The Tyranny of Dead Ideas.”

His thesis is that many assumptions that have been true in America for decades are no longer true. This really rngs true. A fe:

Children will make more than their parents: For years it was assumed that as the American dream unfolded, each generation got better jobs and pay. This is no longer the case as a paradigm shift in the economy takes hold. I know it’s not true in my case but that’s my choice. I wanted to be a journalist and not a doctor. But I think our kids will not have the high-paying jobs that many of us have.

Your company will keep paying for your welfare. Dead long ago. We are the ONLY country in the world that has employers pay for our health insurance in most cases. So, we get really expensive health care that makes our companies uncompetitive in the world markets. Universal health insurance, here we come.

Tax are bad This will be a tough one to swallow to dogmatic BR bloggers but it is true. The current downturn has shown that financial markets can’t regulate themselves and we can’t rely on them for our welfare. Sure we’ll lower taxes to get us out of this mess, but then watch out. All the TMTs of the world are going to have to accept a fndamental shift that will make the U.S>more like tax-happy FRance (or so Newsweek says). Government will be playing a much bigger role in our lives and will need more taxes to help pay for it. Miller says the real issue is tochange who pays the tax. Rather than have a regressive payroll tax that hurts the poor and middle class, tax polluting industries like coal-fired utilities.

BR bloggers. It’s a Brave New World.

Peter Galuszka

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26 responses to “Death to Dead Ideas!”

  1. Larry G Avatar
    Larry G

    re: the welfare state

    question: what does society do with folks who don’t earn enough to pay for their health care and retirement

    or folks who earn enough but choose to buy SUVs and big homes with granite counter-tops instead of saving money for their inevitable medical care and to pay for their expenses when they can no longer work?

    The “welfare state” says that we will all be forced to pay into a fund – that will be used to pay for medical and retirement expenses for those that wont’ plan or did plan but simply could not earn enough to save enough for later expenses.

    Eureka Moment – Social Security is what?

    It’s a forced savings plan.

    right?

    How about Medicare?

    forced savings plan – right?

    Question – what do these forced savings plans have to do with taxes?

    bonus question – are taxes in general – “forced expenditures” on things that most would not spend money on if they were not forced to?

    How does the free market operate in such a system?

  2. Anonymous Avatar
    Anonymous

    And we will manage unemploymet like France does: two months vacation.

    RH

  3. Anonymous Avatar
    Anonymous

    Why are these things forced savings plans?

    Because history shows us that some people will not, or cannot, save on their own, and we wind up supporting them.

    ————————–

    How does the free market operate in such a system?

    See the quote posted below. Government winds up being a referee to make sure that the “free market” isn’t also free to cheat people.

    That makes a “free market” a political exercise, but it also means that government cantake a longer view of things, and exercise its moral obligation to protect minorities.

    RH

  4. Anonymous Avatar
    Anonymous

    Get over it – We don’t have free markets, we’ve never had free markets, and we will NEVER have “true” free markets.

    The relationship b/w Wall Street and Washington has been too close for too long to make me believe otherwise.

    So long as bankers and stock brokers keep going broke because they make bad decisions and continue to crawl back on their knees to Washington to get bailed out there is no way a “free” market can exist.

    As a nation we have been here before…

    Panic of 1873 – http://tinyurl.com/3fj89r

    Panic of 1893 – http://tinyurl.com/otlyv

    Long Depression – http://tinyurl.com/9pqdyu

  5. E M Risse Avatar
    E M Risse

    Peter:

    All good points but he missed the big one:

    The current level of consumption and techno dependent lifesytles can be mainatined.

    Citizens are not now paying in taxes, fees or prices anything near the total cost of existing society.

    And there are 4.5 billion who want to join the party.

    EMR

  6. Anonymous Avatar
    Anonymous

    “Get over it – We don’t have free markets, we’ve never had free markets, and we will NEVER have “true” free markets.”

    I think that is what Professor Haab said. We have free markets only so long as we do not have governments. Truley “Free markets” are aldo free to cheat people, and so we institute governments to act as refereee.

    Then, of course we want the referee to be partial to “our side”.

    RH

  7. Anonymous Avatar
    Anonymous

    “The current level of consumption and techno dependent lifesytles can [not] be mainatined. “

    Well, if you are dying and you condition is incurable, then the rational thing to do is decide how you want to go about dying.

    If the cure is worse than the disease, yu are better off with the disease.

    We should be making plans for apocolypse rather than spending effort futilely trying to avoid it.

    RH

  8. Groveton Avatar
    Groveton

    PG writes, "The current downturn has shown that financial markets can't regulate themselves and we can't rely on them for our welfare.".

    Actually, the current downturn proves that neither the financial markets nor the government can regulate the financial markets. Your boy Clinton killed Glass – Stengall didn't he? Why do we think the provably ineffective government will now be the salvation? And wasn't the government asleep at the switch like this during the S&L meltdown? I believe the seeds of that fiasco were sown under my boy Reagan's watch. So, Democrat or Republican, liberal or conservative – it really doesn't matter. Government is inept. Maybe not as inept as private industry regulating itself. At least that's the hope.

    As for the salary cap on banks taking TARP funds – the road to hell is paved with good intentions. President Obama better start making people think that being the CEO of a failing TARP fund guzzling bank is a civic duty. Because the guys who can really run a big, big bank can make a whole lot more than $500,000 per year doing something else. Like joining a hedge fund and starting their investment banking operation. Yes, it's true – now that many former investment banks have re-chartered themselves as commercial banks they are no longer allowed to engage in many buiness areas in which they formerly engaged. Sound good? Maybe. Free enterprise abhors a vacuum. Many of the big hedge funds are well underway to offering investment bank – like services. Who wil they get to run those services? the guys who decide that making $15M a year running the investment banking side of a hedge fund is more fun than getting $500,000 per year to try to fix a badly broken commercial bank.

  9. Anonymous Avatar
    Anonymous

    Ouch.

    We should be making plans for apocolypse rather than spending effort futilely trying to avoid it.

    RH

  10. Anonymous Avatar
    Anonymous

    Groveton,
    The $500 K cap only applies in “exceptional” bailouts. Did I ever say Clinton was my boy?
    Peter

  11. Anonymous Avatar
    Anonymous

    And they can still get paid in stock – after the gov gets repaid.

    I’ll bet there are some great tax breaks for deferred compensation.

    RH

  12. Larry G Avatar
    Larry G

    Well.. at least Groveton didn’t say that Barney Frank was “his boy”….

    ;-}

  13. Larry G Avatar
    Larry G

    alright.. one of you blogger authors… get a gander at this document and do a report:

    ” BELTWAY BURDEN
    The Combined Cost
    of Housing and Transportation
    in the GreaterWashington,DC,
    MetropolitanArea”

    http://commerce.uli.org/misc/BeltwayBurden.pdf

    and guess what.. EMR is apparently not one of the authors .. or else the report Title would have said:

    “The failure of Fundamental Transformation in the Washington New Urban Region”

    just kidding…..

  14. Anonymous Avatar
    Anonymous

    It is One of many such studies.

    Usually they show that homeowners and commuters DO make rtional economic choices.

    This one is funded by the Urban Land Institute:

    “The Center supports the development of mixed-income communities close to employment centers and transportation hubs.”

    But no word about promoting employment centers close to existing communities.

    “This report provides a comprehensive examination of the “cost of place” in the
    Washington, DC, region, presenting a jurisdiction-by-jurisdiction look at the combined housing and transportation cost burdens for households in the metropolitan area.”

    Funny, this study shows different results for Fauquier than another study I have seen: This one puts much of Fauquier in the moerate category, while the other one I have seen puts Fauquier inthe highest category. Not that it makes any difference that it is moderate in cost,the county isn’t making any of it available.

    “Part of the answer lies in creating more housing and
    transportation choices.”

    Yep and part of it involves more employment choices. And I love this use of the word “creating” as if we were God and there is no cost involved.

    —————————-

    “The DC Metropolitan region is home to one of the most successful transit systems in the country, with a comprehensive network of subway and bus service
    and a growing number of transit-oriented developments. Yet many of the outlying areas struggle with sprawl,”

    In other words, one of the most successful transit systems inthe nation fails to meet the requirements of much of the metropolitan region.

    “it is increasingly clear that we need to use our
    existing infrastructure more wisely and more intensively. “

    Even though we are operating at standing room only during rush hour and we only cover half of our costs as it is. lets see if we can make things even more uncomfortable and slower, while we raise the prices, and continue to lose money.

    “For example, there is the
    need for policies to preserve the existing stock of affordable housing in the city and older suburbs — a valuable resource for families willing to make do with
    smaller housing and fewer amenities.”

    That pretty much blows the idea that anyone else is going to voluntarly move there.

    “More compact development patterns would help make public transportation more economically feasible but also would attract
    retail and other uses that would allow individuals to meet more of their daily needs with shorter drives or by walking or riding a bike.”

    Yep, and it also means that that many MORE places are just beyond the local radius, and more people have more options of where to go – in the same amount of space.

    “Area employers also have a role to play in both the problem and the solution. For some employees, driving to work is the only option.”

    AHA. At last we get around to the employers.

    “Employer assistance that enables employees to rent or buy homes closer to the location of their jobs or close to public transportation could also reduce
    their reliance on driving.”

    Or they could just pay higher salaries and reduce their ability to compete. Or we could require them to contribute more to the transportation systems that serve them. We could set a “cap and trade” limitation on job density that overtaxes the transportation system. We could expand those transportation sytems to better serve the the sprawl areas and encourage the employers to go.

    As opposed to increased housing assistance, at least these ideas offer the employer something in return for their money.

    “to maintain and improve the public transit systems in the region to reduce traffic congestion in close-in neighborhoods.”

    That’s pretty fair, just the close in neighborhoods need better transportaion?

    “…residents in the
    region are spending substantial amounts on transportation.”

    And ADDING $8.00 each way on VRE is going to reduce that cost how? yep, some people in certain neighborhoods have less travel. That does not mean that experience can be easily replicated and sold.

    Etc. etc. etc. It is the same old drivell that might as well have been written or plagiarized by EMR or any of many another apparently cloned resources. Right down to the same phases.

    And there is no context: there is a reason that Fauquier county is as high as it is: the county wants it that way to keep the riff raff out. OK so their costs are ten percent higher than the regional average: compared to the salaries its in the noise.

    BARF, BARF, BARF.

    RH

  15. Anonymous Avatar
    Anonymous

    The funny thing about this is, that the underlying concept is that people SHOULD want the lowest combined price for housing and transportation.

    EMR would tell us that HIGH prices signify what people want and are willing to pay for. In this case the highest combined prices are in the outskirts.

    And naturally a good deal of that is because those people drive larger vehicles: pickups and other vehicles capable of towing horses and boats and campers and trailers full of motorcycles and all the other toys you cannot vary well keep in the compact inner areas.

    RH

  16. Larry G Avatar
    Larry G

    Staying within the context of this Blog entry:

    * Children will make more than their parents

    * Your company will keep paying for your welfare.

    * Tax are bad

    Well.. like Obama said … without a job… your worries about how much your kids will earn..or how high taxes are – are pretty much submerged by how are you going to pay your mortgage or go to the doctor if you don’t have a job or health care?

    But here’s the thing.

    for years and years we have opined smugly and derisively about European Welfare States… and their high unemployment rates, perceived lower standard of living and waiting queues for health care.

    so …what good is good old American Capitalism right now?

  17. Anonymous Avatar
    Anonymous

    Waiting in a queue for health care is better than having none.

  18. Larry G Avatar
    Larry G

    yes.. like many of us already don’t wait right now.

  19. James Atticus Bowden Avatar
    James Atticus Bowden

    PG: Are you treating a bit of journalism seriously? Like they actually know what they are writing about?

    It's a good post just for laughs.

    Like this false assumption: "The current downturn has shown that financial markets can't regulate themselves and we can't rely on them for our welfare."

    And this gut buster: "All the TMTs of the world are going to have to accept a fndamental shift that will make the U.S>more like tax-happy FRance (or so Newsweek says). Government will be playing a much bigger role in our lives and will need more taxes to help pay for it. Miller says the real issue is to change who pays the tax."

  20. Larry G Avatar
    Larry G

    the fundamental purpose of business is to not look out for the welfare of it’s workers other than what is necessary to secure a viable workforce.

    In other words – the workforce is human capital – to be safeguarded as a sustainable resource – for the purposes of the company.

    If you think about it, it is up to workers to be advocates for themselves.

    A company’s first responsibility is to protect and preserve – the company.

    The world has changed.

    How many people do you hear nowdays say that they aspire to find a permanent career with a good company?

    What this means is that your pension and your health care are YOUR responsibilities now and that the idea that some company is going to pay you a pension and provide you with medical care as company “benefits” is ..if not gone.. going to be gone for most companies.

    The question is – should people through government – seek to set up equivalent pension and health care systems.

    One can call such a union of purpose – socialism or government welfare but those are divisive words IMHO.

    If a majority of people want a pension and healthcare system under the auspices of government – and the system is equitable and self-supporting then why is that a bad thing?

  21. Anonymous Avatar
    Anonymous

    The U. S spends more money on healthcare than any other nation but we rank 39th in the quality of services provided and the metrics on outcome from those services.

    Since Canada became a single payer system whe have gone form parity with Cnada on most metrics to lagging behind them: Candians uses to have equivalent lifespans, and now their lifespans are significantly greater than ours.

    Of course, they may spend that extra time wwaiting in line for services……..

    Say what you like about the problems of “socialized” medicine, our system is seriously broken.

    RH

  22. Larry G Avatar
    Larry G

    the reason why is simple.

    There is money to be made with any enterprise that primarily operates with paper records.

    But we have a bunch of idealogical zealots running around talking about the “evils” of socialized medicine which is, in their mind, anything other that the current status quo business model.

    When you visit your doctor, pay attention to how that office operates – with paper.

    Notice the walls of paper file folders.

    Notice your file folder.

    Ask yourself ..when you visit a specialists -how much of that folder the specialist gets to see when he/she starts making decisions based on your medical history.

    Sometimes I don’t understand how we can be so dumb… and then smugly look at the rest of the world as “backward”.

    The idea that people in other industrialized countries are healthier than us and live longer than us and pay less than us for medical care AND they are all covered and there is no such as thing as “pre-existing conditions) gets relegated to the “don’t confuse me with the facts” ash bin.

  23. Anonymous Avatar
    Anonymous

    “Notice the walls of paper file folders.”

    My doctor got rid of his. He is all electronic and when he writes a scrip it goes straight to my pharmacy.

    Service is much imporoved.

    RH

  24. Larry G Avatar
    Larry G

    all of your medical files are now digitized and shareable electronically with other doctors you see?

  25. Anonymous Avatar
    Anonymous

    Not entirely, but for the most part, yes. I had x-rays not long back which two of my doctors could pull up and see digitally.

    RH

  26. Larry G Avatar
    Larry G

    I note that UVA has electronic records… that yes.. my Dr. could “see” but of course they could not see his….

    The amount of paperwork is simply astounding – and time consuming – and expensive – and it leads to errors.. misunderstandings and just plain bad medicine…

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