The Future of Capitalism

Clive Crook's Bloomberg view column criticizing Paul Krugman, which we excerpted and linked earlier here, has elicited a ferocious response, including one from a professor of economics at the University of California, Berkeley, Brad DeLong, who, as Mr. Crook summarizes the matter in a follow-up column, posted an item that "exemplifies the intemperance I'm addressing. He illustrates it with a picture of a clown. He also wants me fired. 'Bloomberg has some house-cleaning to do,' he says -- charming, and from a tenured academic, to boot."

Charming, indeed.

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Smoking at the Met

May 9, 2013 at 12:32 pm

A New York Times dispatch on the Metropolitan Museum of Art's annual costume gala reports:

Don't take this as approval, but you can tell it's a wild party when people who normally sneak away to smoke in the bathrooms are now smoking openly inside the galleries, even though Mayor Michael R. Bloomberg was there (or at least he had been earlier).

It will be interesting to see whether Mayor Bloomberg and his administration come down as hard on the Met as they would on a small business that showed similar disregard for the city's anti-tobacco regulations. If the Museum gets away with no consequences, it sure looks like a double standard.

Imagine That!

May 8, 2013 at 10:27 am

From a New York Times article about the fall-off in recent performance by the venture capital firm Kleiner Perkins Caufield & Byers:

Kleiner has held a series of status-report meetings with its outside investors this year, acknowledging that recent fund performance "wasn't great," one attendee said. "They really believed green tech was going to be the next big technology wave," this investor added.

I'm not a big fan of anonymous sources, but this line made me chuckle. The ranks of those who "really believed green tech was going to be the next big technology wave" included not only Kleiner Perkins but also President Obama and lots of other investors both private and governmental. There were plenty of journalists, too. That the Times can now admit in a front-of-the-business-section news article that this view was incorrect is a big deal.

That's not to say that no one made any money on this stuff, or to say that no one ever will. But it wasn't as easy or as sure a thing as it seemed at the time.

Langone, Barbour Talk Education

May 7, 2013 at 2:51 pm

"No matter how hard they try to intimidate us," the chairman of the Manhattan Institute, Paul Singer, said last night, "we will not back down."

The event was the Institute's annual Alexander Hamilton Dinner in Midtown Manhattan. Those attempting the intimidating were identified by Mr. Singer generally as defenders of the status quo, but given the context of a recent American Federation of Teachers report that put money managers whose personnel donated to the Manhattan Institute on a "watch list," it wasn't hard to imagine what he meant.

No backing down at all was evident in the remarks of the two main speakers at the event, Invemed CEO Kenneth Langone and the former governor of Mississippi, Haley Barbour.

Said Mr. Langone, who was honored at the event with the Alexander Hamilton Award: "We need to hold our teachers accountable....They are being paid a fortune and very frankly the results aren't there....We are not getting the results from our teachers for what we are paying."

Richard Epstein Versus the Pope

May 7, 2013 at 8:23 am

Libertarian law professor Richard Epstein's latest column is up at the Hoover Institution's Defining Ideas website. In it, he writes about the collapse of a garment factory in Bangladesh in which hundreds of workers were killed:

Bangladesh does not need to pass new laws to deal with the situation. It needs only to enforce expeditiously and uniformly the safety rules currently on the books, by immediately shutting down any building not in compliance with minimum safety standards. The credible threat of a shut down should have an instant effect on factory safety.

The Plausibility Plague

May 6, 2013 at 5:17 pm

review of Big, Hot, Cheap, and Right: What American Can Learn From the Strange Genius of Texas

The Plausibility Plague — the problem of pundits assuring readers that some outcome is impossible — is the topic of my column this week:

Anyone who has ever suggested a bold policy adjustment, whether it is a change in monetary policy or the elimination of a cabinet department, is familiar with this phenomenon. Instead of addressing the actual merits of an idea, people prefer to just dismiss it as implausible, as if that ends the discussion. The result is an artificially constrained public policy debate biased toward the status quo.
But if there's anything that history teaches, it is that what seems implausible in prospect often seems inevitable in retrospect.

Please check the full column out at Reason (here) and at Newsmax (here).

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May 3, 2013 at 5:08 pm

The recent opening ceremonies for the George W. Bush Presidential Library in Dallas were a reminder of, among other things, the outsize influence the Lone Star State has had on the rest of America.

Texas gave the United States not only George W. Bush and his father George H.W. Bush, but also Lyndon Johnson, Sam Rayburn, Phil Gramm, Tom DeLay, and Ron Paul. The computer company Dell is based there, as is Whole Foods Market. Texas's abortion laws and a Texas plaintiff who opposed them gave rise to the Supreme Court's decision in Roe v. Wade.

Erica Greider reminds us of all this in her new book Big, Hot, Cheap and Right: What American Can Learn From The Strange Genius of Texas. She has an eye not just for the historically significant fact but also for the telling cultural detail — she mentions a Fort Worth restaurant that listed a chicken-fried steak on its menu as "on the lighter side," and a Houston plastic surgeon who had his home swimming pool built in the shape of an augmented breast.

From the Climate Change Activists

May 2, 2013 at 2:52 pm

The South Mountain Company blog has an update from the anti-fossil-fuel crowd. It runs under the headline "Victory at Hand":

There are signs that the climate movement could be on the verge of a remarkable and surprising victory … This would include the removal of the oil, coal and gas industries from the economy in just a few decades and their replacement with new industries.…
The fossil-fuel divestment campaign that was started by the grassroots organization 350.org began with colleges. Now, according to an article last week in Grist it is spreading. San Francisco, Seattle, and 10 other cities are considering selling off all their fossil fuel holdings.

Stanley Fischer on Israel's Growth

May 2, 2013 at 12:14 pm

Ari Shavit's upcoming book My Promised Land: The Triumph and Tragedy of Israel includes an account of an interview with the governor of the Bank of Israel, Stanley Fischer, that may be of interest to FutureOfCapitalism readers and of relevance to the American economy. From the book:

In the years 2003 to 2008, Israel's annual growth rate was 5.2 percent. While the world was in crisis in 2010-11, Israel's annual growth rate was 4.7 percent....Fischer tells me there are four reasons for this success: reducing government spending dramatically (from 51 percent of GDP in 2002 to 42 percent in 2011); reducing the national debt significantly (from 100 percent of GDP in 2002 to 76 percent in 2011); maintaining a conservative and responsible financial system; and fostering the conditions required for Israeli high-tech to continue to flourish.

Clive Crook on Paul Krugman

May 1, 2013 at 10:01 am

Clive Crook has a Bloomberg View column about New York Times columnist Paul Krugman:

He's enormously influential with those who need no persuading, which is to say not very influential at all. He would have more influence where it would actually make a difference if he developed -- or at least could feign -- some respect for those who aren't his disciples.
Krugman says his opponents are motivated by politics. "Am I (and others on my side of the issue) that much smarter than everyone else? No. The key to understanding this is that the anti-Keynesian position is, in essence, political. It's driven by hostility to active government policy and, in many cases, hostility to any intellectual approach that might make room for government policy."

A Tax on Amputees

May 1, 2013 at 9:50 am

The New Hampshire Union Leader has an editorial pointing out that the Boston Marathon bombing victims who lost limbs and who will be fitted with prosthetic or artificial legs will be stuck paying the ObamaCare medical device tax. The editorial doesn't suggest it, but a fun move for the Republicans in Congress who oppose the medical device tax and the Democrats (including Al Franken and Elizabeth Warren) who also oppose the tax would be to send up a bill waiving the tax for prosthetic limbs for Boston Marathon bombing victims (or, for that matter, for American troops who lose limbs to improved explosive devices). See if President Obama vetos that one!

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Weiner's Work

April 30, 2013 at 9:28 am

The New York Times has a report on how Anthony Weiner, the former congressman from New York who is now considering a run for mayor, is earning hundreds of thousands of dollars a year: "Mr. Weiner said he had reached out to federal officials at the Energy and Agriculture Departments, as well as members of Congress, on behalf of his clients. But he insisted that the work did not meet the legal definition of lobbying, which he said his contracts made clear he would not do."

His clients include an electronic medical records provider, a law firm trying to get the FCC to relax its restrictions on major foreign ownership of broadcast media, and a biofuel company.

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Health Insurance and Smoking

April 30, 2013 at 9:00 am

California is moving to join Massachusetts, Vermont, Rhode Island, and the District of Columbia on the list of places where health insurance companies are not allowed to charge higher premiums to smokers, NPR reports. The proposed law in California "has so far encountered no formal opposition from anti-smoking groups, cigarette companies, insurance companies or the American Lung Association," NPR says.

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Richard Epstein on Stop and Frisk

April 30, 2013 at 8:54 am

Libertarian law professor Richard Epstein's column this week, on civil liberties after the Boston Marathon bombing, gets into some of the legal background of the"stop and frisk" practices that have been in the news in New York. He writes:

As far back as 1969, the United States Supreme Court, speaking through Chief Justice Earl Warren in Terry v. Ohio, held, after much handwringing, that a police officer did not have to show probable cause in order to stop and frisk a person on public streets. Reasonable suspicion that unlawful activity might happen was all that was needed to justify what are now commonly called "Terry stops." Justice John Marshall Harlan tightened the noose still further by noting that whenever the police had enough reason to stop a person, the right to frisking him followed "automatically" given the ever-present risk that the party stopped might be carrying a concealed weapon.

Right Time To Buy Real Estate

April 30, 2013 at 8:45 am

Why doesn't the real estate industry attract the same regulatory and press scrutiny that Wall Street does? That's the topic of my column this week, which reports on at least one real estate editor at a major American newspaper who earns income doing freelance writing for a real estate company. Please check it out at Reason here.

Barry Ritholtz emails links to a couple of his posts (here, here) that have been critical of the industry. He's the exception to the rule, I think.