From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: Clinton's plan our best and only hope for the future
Date: Thu, 05 Nov 92 11:52:43 EST
Organization: IFS Project, University of Michigan
Distribution: usa
Reply-To: jwh@citi.umich.edu

In article <1992Nov5.020627.14550@mksol.dseg.ti.com>, mccall@mksol.dseg.ti.com (fred j mccall 575-3539) writes:
|> In <1M-=Wj#@engin.umich.edu> jwh@citi.umich.edu (Jim Howe) writes:
|> 
|> >In article <Bx1J6D.E03.2@cs.cmu.edu>, jab+@cs.cmu.edu (Justin Boyan) writes:
|> >|> 
|> >|> You've completely missed the point of Clinton's plan!  First of all,
|> >|> under Clinton, the government investment goes largely into tax
|> >|> incentives which encourage industries to invest in R&D, job training,
|> >|> and high-tech.  
|> 
|> >But where does the money come from?  It is simply a case of taking money
|> >from A to give to B.  I trust the free market to allocate investment
|> >far more than I trust a bunch of government bureaucrats.  Real investors
|> >have an interest in investing in projects that pay off.  Bureaucrats
|> >have an interest in investing in politically popular projects.  Politically
|> >popular does not necessarily translate into economically beneficial.
|> 
|> You seem to have confused bureaucrats with politicians.  Bureaucrats
|> have no interest at all in politically popular projects.  Bureaucrats
|> aren't elected and can be damned near impossible to fire.  
|> 

All the more reason to not let the government control 'investment'.

|> Unfortunately, there are areas where the market doesn't allocate well
|> at all.  Right now, under the current structure, the 'market'
|> allocates preferentially to the generation of meaningless paper
|> profits which do well (briefly) for investors but create no real
|> wealth.  Investment churning, etc.  This is NOT in the best interests
|> of the economy, you, OR I (unless you happen to have enough capital to
|> make money at that game).
|> 

The market isn't perfect, never has been, never will be.  However it
represents *free* individuals making *free* choices with *their* money.
I will take a free but imperfect system to a non-free impefect system.
I would even choose it over a non-free and *perfect* system.

|> >|> Private-sector investment, but targeted for long-term
|> >|> societal benefit.  Those projects which are government-funded, such as
|> >|> high-speed rail and the National Service Trust Fund (enabling all kids
|> >|> to borrow money for college), are also precisely those which are
|> >|> designed to have a long-term benefit on the economy.
|> 
|> >Once again, you are simply changing who gets the money.  Who says that
|> >we need a high-speed rail system?  You give the example of the Interstate
|> >Highway System (which was a defense expenditure) as an example of
|> >a 'good' thing.  It may be, but it is entirely possible that we
|> >wasted vast amounts of money to create a system that doesn't serve
|> >our needs as well as something that might have been created in its
|> >absence.
|> 
|> Yes, and it's also possible that we would have invested in absolute
|> crap.  If you can point to ANYTHING that would have likely been
|> created by the market in place of the Interstate highway system, I'd
|> be interested in hearing it (and your justification for why the market
|> didn't create it anyway, if it was such a flaming great idea).
|> 

Unfortunately I'm not that good of an entrepeneur to visualize what
might have been.  Most likely we would have had more of a mix of
transportation options.  Telecommunications technology may have been 
accelerated.  More people might be working from home rather than commuting.
As to your second question, what would be so unusual about alternative
plans not making it in the face of a massively subsidized plan?

|> >|> 
|> >|> Clinton's plan is founded through and through by a long-term vision of
|> >|> what kind of industries will be able to compete in the global market
|> >|> and give Americans good jobs. 
|> 
|> >Clinton's plan is founded on the notion that government knows best.
|> >Unfortunately it doesn't know best.  In addition, it reduces economic
|> >freedom which I value as much as political freedom.
|> 
|> No, Clinton's plan is founded on the notion, well proven in history,
|> that men are in general a greedy and rapacious lot, and that without
|> some outside guidance and restraint they will lay waste to everything
|> around them in the name of their own profit and privilege. 

Hmm, men are greedy and rapacious but when elected to office they
can suddenly provide guidance and restraint.  I didn't realize that
becoming an elected official could 'cleanse' a person of all his
bad traits.

|> This has
|> been recognized for thousands of years.  It's why the Roman Emperors
|> used to have men who followed them around and repeatedly reminded them
|> that they were only mortals.
|> 

Maybe we should try to do that with Congressmen.

|> >|> Bush's "plan", supply-side economics,
|> >|> encourages short-term profit-taking and in fact discourages industries
|> >|> from spending on research.  Which is precisely why other countries
|> >|> have surpassed us in civilian manufacturing and technology, and why
|> >|> most new jobs in this country are crummy fast-food and retail jobs.
|> >|> Don't you realize that the American Dream is slipping away from us
|> >|> kids today because of Reaganomics?
|> >|> 
|> 
|> >No, because it isn't true.  Your comment about most new jobs being
|> >crummy fast-food and retail jobs is not supported by fact.  It
|> 
|> Then how do you explain the fact that people are working longer hours
|> and making less money than they did in the past?
|> 

Statistical aggregation.  People as a group are working longer hours
because we have more people working.  We have people making less money
in the past because we have had an influx of young workers and women.
We may have some individuals working longer hours (i.e. overtime) because
of government laws which create incentives to overuse full-time employees
rather than add new full-time employees.

|> 
|> >level of manufacturing has increased.  
|> 
|> Level, perhaps, although I would like to see some figures on this.

From 1980 to 1990, manufacturing as a % of GNP rose from 20% to
22.5%.  From 1947-1990, the % of GNP has pretty much ranged from
20% to 22.6%.

|> I'd also like to see it massaged into manufacturing on a per capita
|> basis and a mention of how many people are involved in manufacturing
|> now (and that number is down by millions -- what are all those people
|> doing now?).

Employment in the 'goods' sector is down in percentage terms.  Some of
this is due to the fact that many jobs which were formerly performed
by a 'goods' company are now being contracted out.  Same work, maybe
even the same workers, but a different sector classification.  Also,
the fact that we can produce more goods with fewer people is an
indication of our increased productivity.  If we wanted to keep 
everyone employed in manufacturing industries we could simply require
companies to eliminate all machines and require that work be done
by hand.  Of course this would also dramatically raise costs, and
substantially lower the standard of living for everyone.

|> 
|> >Our technology still leads the
|> >world in many areas.  
|> 
|> In some areas, indeed, but we're working real hard to piss those away,
|> too.  We INVENTED most of the technology that other countries turn
|> into products and beat our brains out with.  Why do you think that is?

Perhaps we have better things to do with our time and effort.  If
you were a productive janitor as well as a productive electronic
engineer, would it be a productive use of your time to clean your
office, or would you hire someone else to do it?

|> Obviously, there are great opportunities in those areas, and yet
|> countries with less of the 'market freedom' you vaunt clobber us in
|> your free markets.  How does that come about, do you think?
|> 

Perhaps you could provide a better description of what you are talking
about.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         
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