Note the double question mark. That is because I'm quoting Can we Grow the Economy Any More? I'll let you go off and read that post now, if you like.
Done so? Good. Now for my ignorant rant:
What strikes me particularly is point 6, or a variant thereof: effectively, that we're too fat, as a society. We're so rich that it is barely worth our time picking off the parasites. By parasites I don't mean the low skilled workers, or even the discontent rioter-types - because broadly speaking, those types stay in the background and are quietly bought off. I mean the H+S zealots, OFSTED (bit of a UK-centric one that, but I'm sure you have your local equivalent), the lawyers, patent trolls, bureaucrats, whatever; I can't even be bothered to make a list. They are just an accepted part of life; they make things worse but its easier going round them than fixing them, so no-one does. If we were poorer, like the Chinee, we wouldn't be able to afford all the parasites.
What is H&S?
[Health and Safety -W]
Also, I don't understand how your rant relates to #6. I think your "parasites" are the structural unemployed, but your examples are actually employed- just useless. But if "we" kick them off the employment roles then you have deflationary pressure.
Maybe you are arguing that these people are no longer contributing to growth, but then were they ever?
[Oh, the connection is indirect. He is saying something about the economic drag of the useless; I'm talking about the drag of those not just useless, but actively in the way -W]
Need more contributors to statis.
Record late-season melt event or AMSR artifact? You be the judge.
Actually the polar air outbreak in the SH may be even more interesting.
Wind turbines not the answer.
Environmental Effects of Wind Energy Projects
National Research Council
May 3, 2007
Douglas Adams has the solution!
In the Hitch Hikers Guide to the Galaxy he talks about the Golgafrinchans. A race of people who convinced all the useless people in their society (mostly telephone sanitizers) to board a ship headed for another planet. The 'plan' was that the telephone sanitizers would board the first ship and the useful people would board the second and third ships. But there was only even one ship.
And it would have worked... except that the rest of the Golgafrinchans we struck with a nasty and fatal disease that spread though unsanitized telephones.
Still it is probably worth the risk.
I hope your European readers understand that "self-serving group of partisan hack" is American slang for correct.
The parasites have bought off the whole system -crossposted from Pharyngula
"New York Attorney General Kicked Off Government Group Leading Foreclosure Probe" http://www.huffingtonpost.com/2011/08/23/new-york-attorney-general-eric…
.....aaand another principled Democrat gets thrown under the bus (and campaign donation money is changing hands).
In the long run, it is questionable that even the Americans can afford this kind of parasites.
Having had his hares raised and some braised by various and sundry health and safety violations Eli does have a different opinion on H&S. Darwin tests are continually being failed
Don't you see that now all British industry has been sold abroad by the bankers, the only way we can grow the economy is to appoint more H&S inspectors etc.?
> mortgage probe
See, they're not 'useless' except to us little people. They exist to determine conclusively that the corporations stole whatever it was whenever it was fair and square, and determine that it would be impossibly disruptive to persist in trying to figure out what's where and try to claw anything back.
That's what the SEC was invented to do back in the 1930s -- "restore confidence" -- and such symbolic gestures are necessary every so often to keep the game going.
Fortunes are made by doing things _before_they're_illegal_. The game is to continue to invent new things faster than the old ones are made illegal.
"... regulation should be viewed as symbolic (ie not expected to result in significant changes in distribution of economic resources), a means of restoring investor confidence ...."
Securities legislation and the accounting profession in the 1930s: The rhetoric and reality of the American Dream
Merino, Mayper - Critical Perspectives on Accounting, 2001
(which I've been recommending since it was available free full text online -- but now seems completely paywalled; you'll have to ask a librarian to get you a paper copy or buy it)
That's why they call them "Trusts" -- the government exists to protect them by claiming to regulate them.
One of the better comment/quotes from a few years ago is here:
In 1932 Reinhold Niebuhr wrote the following:
Lenin declared ââ¦ Marx splendidly grasped the essence of capitalistic democracy, when, in his analysis of the experience of the commune, he said the oppressed are allowed, once every few years, to decide which particular representatives of the oppressing classes are to represent and repress them in politics.â An unbiased analysis of the power of the owning classes in modern democracy, their dictation of legislation, the almost unvarying interpretation of ambiguous law in their favor, and their evasion of the law when it suits their purposes, will not find it easy to answer this charge of communism.
But the next year, in 1933, the Pecora commission did happen. The United States opted for justice, and democracy was preserved.
Germany on the other hand, in that very same year, opted for fascism when it elevated Hitler to power.
Why did Germany opt for tyranny and the U.S. for justice? As Niebuhr observed, it wasnât because Germans lacked intelligence or education:
It is a question whether any middle class will ever be intellectually better disciplined and socially more intelligent than that class in England and Germany. In both of these nations the entire middle-class community turned to conservatism rather than radicalism in the momeent of crisis; in England in the election of 1931, when it participated in the overwhelming Tory defeat of Labor, and in Germany, where it expresses itself through the policies of fascism.
So what was the difference between Germany and the U.S. in 1933?
And does the U.S. still have what it had in 1933, the volition to opt for democracy and not tyranny?
---- end excerpt ----
My usual wordy and over-cited response is in the usual bucket.
There is another group of "parasites" in the UK that is part of the false economy. I'll describe it in a comparison.
(i) The European Mol. Biol. Lab and associated groups runs a massive database of DNA and protein sequence information with sophisticated tools for incorporating and organizing the continual torrents of data, and doing structure prediction, sequence alignments and comparisons, analysis of evolutionary relationships, links to protein structural data and so on. A pretty massive effort that works extremely well and funded at the level of some millions of euros per year (can't quite access the precise cost).
(ii) The UK government-past decides that a computerization of Natl. Health service patient records would be wizard, and gives the contract to a bunch of cronies and chancers who think of a very large number (Â£2.3 billion) and are awarded the contract. Many years and Â£12-spend later and counting, it remains a shambles.
Seems to me this (and other grand government-funded super-duper-expensive computerizing junkets) are largely boondoggling schemes to siphon our public money into the private sector to boost the "profit-making" that is "good for the economy". It's a rather upmarket version of digging holes in the ground, in this case to keep a set of consultancy and IT companies occupied and well-renumerated, by shifting our money to them without our actually considering that we're "buying" anything (which so far we're not).
Other examples include the pretence of private-sector "competitiveness" in the internal markets of the railways and NHS and the slew of "energy companies" that don't actually supply energy at all but compete for our custom as payment intermediaries and whose army of salespersons regularly bother us to play the game of continually changing our "supplier".
The NHS is next methinks. The government and private sector are beside themselves with the prospect of getting their hands on our pretty-effective-if-ragged-around-the-edges health care system and turning it into a US-style mess that costs about twice as much per capita and gives poorer outcomes on most measures.
IMO this stuff is the greatest danger to the UK sociopolitic simply because there is no major party that has any interest in protecting us against the corporatisation designed to get us to part with our money without receiving anything of value in return...
I wonder if I went into rant mode there....apols if I did!
My opinion is that, fundamentally, aging demographics, coupled with equalization of wages between developing countries like China and India and developed countries like US and Western Europe, will result in a relatively flat economy going forward. Adding to this is the fact that our economic system seems to be predicated on expectation of ever future growth -- take Social security for example, a system that works great if the pool of labor is constantly increasing, but not so good if the reverse is true.
Ignorant rant indeed. The Chinese have more parasites than any western country I've seen. Go visit an actual company there and you will see what I mean. China is successful at the moment mainly because the capitalists there get away with paying super low wages. As that changes, the economy there will slow down.
I would be happier if my country (USA) could get it through our heads that efficiency is not the sole measure of a society. "Parasites" like government, regulators, oversight etc all add huge benefits to living. How'd you like to live next to a toxic dump? Fly anywhere lately? Do you worry about contamination or disease in your food or water?
gator, I think you're missing William's point. As usual when talking about generalities (e.g. "H&S zealots") it's worth focussing on some specifics, and then we can be confident about what we are or are not disparaging.
So "H&S zealotry" - two specific examples:
(i) In my lab in a largish biomedical department in a UK university we have never (the whole department) had any H/S-related incident of note in the 20 years I've been there. In that time H&S requirements have grown and grown and so, for example, we have vast ring bound folders of "safety assessments" for all of the protocols and techniques used in the lab. No one reads these even though each of them takes us several hours to prepare. It's blindingly obvious that if one is truly concerned with safety issues relating to a technique, that a competent person takes a novice through the technique and supervisors them appropriately. You don't learn how to operate a piece of kit and its potential dangers by reading about them in a "safety assessment".
Even the H&S people in the Uni understand that these safety assessments don't serve much practical purpose. Their role (and much of H&S stuff) is related to protecting our little bottoms against legal consequences of potential mishaps.
So it's a putative H&S charade that is rather divorced from the every day reality of Health and Safety.
(ii) We use compressed gas cylinders the delightful flow from which is regulated by a regulator. I've never known a regulator to fail; however recently it has been decided (H&S) that a regulator older than 5 years (I think) must be discarded. These are rather beautifully machined bits of kit with satisfying valves costing nearly Â£100 each. It isn't cost-effective to have these sent back to the manufacturers for assessment, and so rather disgracefully perfectly good regulators are periodically put in the metal skip (to be "recycled" in China perhaps?). I expect the Uni dumps a good hundred of these a year. I'd say that's "parasitic" somewhat in the mould of my (ii) under my post 11 above. Great fun for the manufacturers of cylinder regulators 'though.
(iii) Incidentally, we are supposed to shout at our students and postdocs if they don't wear labcoats (its a mol biol lab but a low category one that doesn't deal with particularly nasty bugs). It's supposedly a H&S issue. However go into a good mol biol lab in a US Uni, and you need to be a bit of a dork to wear a labcoat apparently (there are many examples on the web - one of my favourites being the little movies made by the office of research integrity here: http://ori.hhs.gov/TheLab/ - not a labcoat in sight)...so is it or isn't it dangerous not to wear a labcoat in a category I mol. biol. lab?
[Yep, that is about right. Examples are legion of ares where people are obliged to produce ring-binders full of "policies" which no-one ever reads. In certain areas of management-speak "H+S" is a keyword meaning "no, we haven't thought about this, but don't bother argue, you're going to have to do it (or not do it) and we won't ever say why" -W.
Eli has seen a couple of old regulators fail. If you don't know what you are doing (always open the cylinder slowly) it can be spectacular.
It would make more sense for the shop over in chem or physics to learn how to test these things for ten pounds or so and do it regularly.
To get rid of "parasites":
1) Make birth control a prerequisite to receiving welfare.
2) Tort reform (something the UK and Texas have in common)
3) Deport and revoke the citizenship of repeat criminal offenders for violent crimes (rape, murder, burglary, assault, etc).
4) Immigration reform. Use psychometric techniques to import high value immigrants rather than low skilled workers that will end up on government assistance. In the US about 50% of immigrants are supported by the government.
Growth of the economy requires:
1) Reduce regulations - too many are "feel good" regulations which purport to increase food/work safety but do nothing of the sort.
2) Generate cheap electricity since all businesses use electricity and lowering electric bills gives consumers more spending cash. Solar and wind are job killers.
3) Abolish minimum wage laws since all businesses use labor. This will grow business, reduce the cost of goods/services and reduce unemployment
4) Abolish all corporate/business taxes. Taxing business either kills them, makes them raise the price of goods/cut employment and reduces their ability to expand and innovate.
"1. Reduce regulations"
Yay. We can get Alan Greenspan'd again with a repeat of the 2008 crash. What were the bankstas saying before they were bailed out? Oh yeah; "Deregulation caused us to run amok." All forgotten a week later, though.
Oh, I know I shouldn't, but I can't resist:
"Deport and revoke the citizenship of repeat criminal offenders for violent crimes "
Deport them to where, exactly? The island of Los Angeles?
[I was wondering about that too -W]
Australia. You've got form
I do agree that banks should be separated between commercial and investment banks. There is too much motivation to play high risk shell games.
Not all regulations are bad.
That being said the cost of regulation compliance is up to nearly 2 trillion dollars a year - that is an enormous weight on the economy. The businesses most able to wade through that red tape are large corporations - and yet small businesses are the job creators in the economy.
In fact, large corporations benefit greatly from excessive regulation since it keeps out new players and reduces their competition.
An example of a bad regulation is the food safety card. Am I against food safety? No, of course not, but taking a short, multiple choice online test, an amazing feat for illegal immigrants that don't speak English, does nothing to improve food safety (translation: other people take the tests for them).
Most restaurants realize that making their customers sick is very bad for business - that is why restaurant food is relatively safe.
Some of the EPA regulations are pretty horrendous, but I doubt I could convince you of that. Regulating "dust" from farmers, CO2 emissions - these things do nothing except raise the cost of goods and put people out of business.
[Just for reference, I'm also against having the EPA regulate CO2. It is very much a "back door" way of getting something you couldn't get by the front door. I'd far rather have a carbon tax. That way, you could throw out your ridiculous fuel economy standards, too -W]
@Dunc I'd set the criteria for deportation and then take suggestions from there:
1) A place where English is spoken (presuming English-speaking deportees)
2) A poor country that can be bribed into giving them citizenship
3) Separated by water/distance to prevent them from walking back.
I'd say Liberia or the Philippines would do, but there are many other countries that could fit the bill.
Chris and W,
Those H&S issues are not examples of parasites, they are examples of you lab people not being involved in your own safety. Go back to the lab manager and tell them they are stupid to throw away $XXX on older regulators (sorry no pound sign easily accessible) and instead institute a testing regime as suggested. Don't be a victim! Most of the time what seems stupid to you is because something makes sense in one area or application and then someone decides to make it general. Speak up if it doesn't apply to you. I've seen people contaminated by radioactive americium because they thought rules about gloves and labcoats were stupid. Too bad the "sealed" source leaked. How much is your safety worth to you? Maybe you should buy second hand regulators, I mean whats' the chance they'll blow in your face? Slim, right?
But bringing up the "chinee" as a counter example is blindingly ignorant. The air in most Chinese cities makes your eyes water. One of our American employees that moved to Beijing had to sleep wearing a filter mask. You see maybe two birds in a day. The mass of people are being paid <$1/hr. Many of them live in factory dormitories. Is this your vision for your home town? Or are you going to be one of the lords and masters riding herd on the masses?
Yes, government and regulation involves what appears to be waste. So what? Government has to be a system that can be implemented by average people, so you end up with a system that is probably heavy handed at times. The alternatives though are not attractive. Even China is working to add more regulation. (Not to mention the society is full of make-work; it's just that people get paid pennies.)
The idea that it is government and regulation bringing down the economy seems dim to me. Large companies are doing fine -- the trouble for the average worker though is that the companies are doing fine with less people. This translates into a larger class gap, lower demand, a slower economy for the majority. Lowering taxes won't do anything to change that. Reducing regulation won't do anything to change that. The companies will just put that money in their pockets and hand out bigger bonuses to their CEOs.
BTW GoodLocust -- the idea that small companies are the job creators in the economy is not true, at least not in the US. More jobs are created by medium and large companies than small, and those jobs are more stable. Small companies tend to grow, yes, but many of them fail as well. So small companies are one of the large job destroyers. I've worked almost exclusively for small companies my career and been laid off a few times. The times the companies failed had nothing to do with regulation and everything to do with either making something the market didn't want or getting beaten by competition. Good ole capitalism.
Food in the US is plenty cheap. Much of the cost is from distribution and retail. Try again if you want to make a case that regulation is driving up food prices.
1) The government has thousands of pages of regulations. Surely not all of them are beneficial? Do you think looking at eggs as they go by on a conveyor belt is really going to prevent salmonella?
2) Improved working conditions, less pollution, etc. are largely a result of increased prosperity and improving technology.
3) Regulations often have unintended consequences. I believe it was Thailand (or another SE Asian country) that banned child labor - which resulted in a massive increase in child prostitution. These people are working for a reason (i.e. so they don't starve) and as their countries grow and prosper they'll evolve beyond the need for child labor.
4) You say large companies are doing fine. If that is the case then it proves my point - more regulations, government bailouts (which encourage risky business practices) and generally larger government will always favor big corporations over smaller ones.
5) As for small businesses in general: http://www.sba.gov/advocacy/7495/8420
6) Food prices have increased drastically over the last few years. I personally think this is due to biofuel (something like 40%+ of food crops being diverted to them) and inflation (real inflation not their new way of calculating it) from printing massive amounts of money to fund more government programs.
7) If you don't like large companies giving huge bonuses to CEO's then why do you support large companies with regulations, bailouts, no-bid contracts and all the other trappings of big government?
8) I've seen way too many places go out of business in the last few years. Many of them run on credit to buy their supplies, but that credit has dried up. How much of that is from the crowding out effect from larger government spending?
9) A good portion of those small businesses would still be around if regulations and taxes had been reduced - look up the Depression of 1920 to see how to solve an economic crisis.
1) argument from incredulity, ignorance. Do you really think deregulation will prevent salmonella in eggs? See China for what happens to a large country with no food regulations.
[Massive economic growth and the lifting of vast numbers of people out of poverty? -W]
2) Disagree. Improved working conditions and environment are the result of generations of hard work by labor and environmental activists. No regulation = more pollution. I grew up in LA and watched the smog problem decrease immmensely because of regulation.
3) Deregulation will have much larger unintended consequences, assuming freedom to pollute is indeed unintended.
4) Does not follow at all. Larger businesses have larger resources and can weather economic problems where smaller business cannot. Regulation has little to do with this.
5) Bad stats. Not surprising from an advocacy group in the government. Census stats: http://www.census.gov/econ/smallbus.html
6) According to the Bureau of Labor Statistics, food has gone up 4% in the last 12 months. Hardly drastic. Careful or our host will have to make a new post pointing out your overdramatization of the situation.
7) The regulations etc benefit me and my community. Bailouts and no-bid contracts are not limited to big government, in fact they would be worse were there not "parasites" whose job it was to oversee these things.
8) None. Interest rates are at their lowest in years. Small businesses go out of business from either bad business practices or not meeting the demand. I've seen places go out of business as well.
9) Doubt it. You don't pay much tax on zero profit. Regulations etc are part of the economic playing field that we are all dealing with. The golden era in the US was characterized by increasing regulation and higher taxes. The past decade is good evidence that lowering taxes has done nothing but bankrupt the government, which is what was intended. Hmmm, wasn't the Great Depression ended by WWII, and the rearmament that preceded it? Gee, a time of high taxes and lots of government deficit spending.
1) No, I don't think deregulation or regulation will stop salmonella outbreaks. We have them in the US and we recall the product. Apparently the people who watch the eggs go by on the conveyor belts are unable to spot the salmonella bacteria with their eyes which necessitates occasional recalls.
The threat of getting sued is a big motivator as well.
2) The trend line for work safety was going down before the creation of OSHA and the trend remained exactly the same. If OSHA had altered the trend line then you may have a point, but it did not.
Regarding LA, if you recall, I said improved technology was a factor - catalytic converters and the use of unleaded fuel to allow the former. As I said before, not all regulations are bad, but look at things like seat belts and air bags - they were being implemented long before laws required them.
Consumers actually like safety features.
3) Deregulation will have far more beneficial effects than negative effects. You can't make everything 100% safe and the attempt to do so is devastating.
I don't need labels telling me that my coffee is hot or not to put my head in a plastic bag.
4) If what you said was true then we wouldn't have to bail out and subsidize so many large corporations with things like TARP, the stimulus, cash for clunkers, etc.
In fact, often it is large businesses in charge of forming the regulations - their own businesses grandfathered in of course.
That is not capitalism.
5) The first link is tenebrous. The second link applies only to "mature" businesses that had sizes smaller than 50 employees - small businesses can have up to 500.
7)Here are some more regulations/proposed regulations I learned about today from the NRA:
a) We must put up posters by Nov. telling them about unionization
b) The NRLB wants to change union elections from 42 days to 10 days.
This pro-union baloney is simply about getting votes. Large unions are equivalent to the mob.
8)Yeah low interest rates if you can get a loan. The banks are sitting on tons of money. The crowding out effect is very real.
9) a) It depends on how your business is set up. Also, if the good years are taxed to oblivion then that prevents/slows the creation of savings that can act as a buffer during harder times.
b) The golden era was during the reign of the Conservative Coalition which cut spending.
c) The Great Depression was massively extended by Herbert Hoover and FDR who both raised taxes and increased government spending.
It only ended after the rise of the Conservative Coalition, the decimation of the industrialized nations in Europe from WW2 and the huge cuts in spending following WW2 - something the liberals at the time complained loudly would send the US back into depression.
Again, compare the Depression of 1920 to the Great Depression - one was solved quickly and the other lingered on for over a decade until massive death and destruction solved the problem.
Ah, and I just remember something about air bags. I believe the US required very powerful airbags that could fully protect a person without the use of a seat belt.
Unfortunately, those can and do cause injuries and even death - esp. to children.
I believe in New Zealand or Australia, they did not have such regulations, and had softer deploying air bags that weren't as dangerous.
With regulations it isn't just about the expense - it is also about what happens when they do it incorrectly.
That's "Chinese" with an s.
W -- re my 1). Go to China and see the factory dormitories and towns. Breath the smog. Eat the melamine. Is this your vision for Britain? The poor in China are still poor, they just live in factory housing now and have cell phones. And BTW, China is moving towards increasing regulation of their food industry because of the problems they experienced with nonregulation.
Regulation is something we can afford precisely because we live in an affluent society. In effect, society is acting collectively to do the caveat emptor thing -- otherwise each of us would have to do this with everything, all the time, in ways that are completely impracticable on an industrial scale. If you don't understand this, then I want to start an LLC that will set up a toxic waste dump next to your residence. You can sue me for actual damages only after you or your family develops an illness, and only after you prove it was my toxic waste that did it. If you win a court case the LLC will declare bankruptcy and you'll get nothing anyway. Hurray for Libertarian principles!
On that note, I'll point to the same XKCD comic: