151–160 of 175 posts
"Specifically, the President has called for increasing limits on “miniofferings,” allowing “crowdfunding,” and phasing in some requirements for small firms as they go public." They are going to ruin a good thing.
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There's more! There was GM! Some of the money the US Treasury 'invested' in GM may not get paid back. So, we might say that GM got 'bailed out'. Hmm. As I understand it, there was a little more to the story: One approach to GM was just to let it go through an ordinary bankruptcy. But DC didn't want that. Why? My understanding is that in an ordinary bankruptcy, GM would have gotten off the hook in their labor contract…
GM would have gotten off the hook in their labor contracts to pay for retirees' health and pensions but, then, by law, the US Federal Government, that is, taxpayers, would have to make up the difference. The PBGC is capped at $54k/year and no benefits. The government would not have had to pay for retirees health benefits (often described as "gold-plated"), and only would have had to pay for part of their pensions. ht…
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> There have been developments in our knowledge of the market since 1680 Yes, but the argument for regulation is that said regulation provides more benefits than the incurred costs. Considering how badly regulated markets do.... Remember, regulation is systemic risk.
Regulation is one solution to market failures. It's not the only solution, but in many cases it works well. The Clean Air Act, for example, has been extremely successful at addressing the negative externalities created by air pollution. Beyond that--the lesson that we're learning from modern economics research is that there are no touchstones. Humans aren't rational actors, the efficient allocation theories are predi…
No. Regulation CAN be a solution to market failures. However, it is absurd to think that regulation necessarily solves market failures.
> The Clean Air Act, for example, has been extremely successful at addressing the negative externalities created by air pollution.
It's always interesting when an economic argument ignores either costs or benefits. While the clean air act provided benefits, that doesn't imply that we couldn't have gotten the benefits for less, let alone that every regulation in the face of claimed "market failure", or even actual externalities, is a good idea.
> So why shout "laissez faire" to a government initiative addressing such a market failure?
Because "government initiative" doesn't necessarily work. In fact, it tends to fail wrt R&D. Yes, the small projects, especially those run by DoD, do well. (I'll note that even that hasn't been all that good recently.) However, the big projects, especially those influenced by VCs, tend to be disasters, especially lately. Since this is one of the latter....
Throwing $2B at startups isn't going to create a new generation of entrepreneurs. 1. Fix the healthcare system. Right now, you're punished if you don't work for a large company in the sense that you're charged up the wazoo for health insurance. Work for a large company and it's close to free. 2. Fix student loans. One could argue don't go to college but I think we can agree there's some value to good schools. 3. Educ…
> 1. Fix the healthcare system. Right now, you're punished if you don't work for a large company in the sense that you're charged up the wazoo for health insurance. Work for a large company and it's close to free. No, it's not "almost free". It's paid for by the company. And yes, paying yourself is tax-deductible in many circumstances. I've actually paid for health insurance out of pocket as an "older american". Rent…
Citation please.
(In other words, you're wrong. And you know it.)
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The US and Canadian government spend the same amount per person on healthcare but Canada has universal health care. On average the US and Canadian healthcare systems provide vary similar outcomes on average. So, clearly more government involvement is an option. But, so is less the US could save a ridiculous amount of money if we could stop wasting it on end of life care that proves little to no benefit. Healthcare is…
> The US and Canadian government spend the same amount per person on healthcare but Canada has universal health care. As does the US, it just doesn't go by that name. Yes, there is free healthcare in the US. It isn't unlimited and you can buy better, but the same is true of Canada. However, I'll note that the US govt directly pays for about half of US healthcare (employees, etc.). If US govt healthcare will be so goo…
The right to healthcare isn't something that only applies to the emergency room.
Earlier quoted context omitted.
Regulation is one solution to market failures. It's not the only solution, but in many cases it works well. The Clean Air Act, for example, has been extremely successful at addressing the negative externalities created by air pollution. Beyond that--the lesson that we're learning from modern economics research is that there are no touchstones. Humans aren't rational actors, the efficient allocation theories are predi…
> Regulation is one solution to market failures. No. Regulation CAN be a solution to market failures. However, it is absurd to think that regulation necessarily solves market failures. > The Clean Air Act, for example, has been extremely successful at addressing the negative externalities created by air pollution. It's always interesting when an economic argument ignores either costs or benefits. While the clean air…
There are several studies showing the huge benefits of the CAA relative to its costs. Banning leaded gasoline alone was a net $16 billion/year benefit.
And no, there is no implication that we couldn't have achieved the benefits of the CAA for less. That's the reality of the world we live in. Neoclassical economics only guarantees us efficient market allocations in the face of demonstrably false assumptions about consumer behavior, transaction costs, lack of externalities, etc. The "laissez faire" touchstone is good and debunked. All we have left is empiricism. Use the tools we have to address perceived problems, then see if the benefits outweigh the costs. There will be no guarantees that you'll have chosen an efficient solution, but any regulation where the benefits outweigh the costs can be justified on its own merits.
Fixing the immigration and patent systems would be infinitely more helpful (i.e. stop getting in the way).
The scientific grant system is even worse! With the rate of grants being accepted at 5%, everyone becomes extremely conservative. Many professors spend most of their time fundraising, not doing science. There is a good case that science would be progressing faster with no government funding at all.
There are obvious things the government could do to improve entrepreneurship. Like simply not kicking our entrepreneurs out! Stapling a green card to our graduate's diplomas -- the fact that we invest nearly a quarter million dollars in each STEM PHD and then don't let them stay has been a known absurdity for more than decade, yet they still don't fix this problem.
Or how about taxing oil and gas like everything else! Even ignoring the trillions of dollars spent policing the persian gulf region, the tax policies surrounding oil amount to an enormous subsidy, making it cheaper in the US than almost anywhere in the world. Simply taxing it would save the budget and dramatically improve prospects for green energy.
The list goes on. I'm stunned by the collective incompetence of the government in stimulating startup growth. Maybe there are good, structural reasons for inaction in the short term, but these issues have been around for years!
Let a thousand Solyndras bloom! But seriously, exempting smaller firms and fundraising efforts from costly regulations is a good part of this initiative. Routing public funds through private investors, not so much. While they're at it, they should completely eliminate the wealth tests for 'accredited investor' status. If some fig leaf of 'accreditation' is still needed, it should be experience-based or net-worth prop…
> Let a thousand Solyndras bloom! lots of alt energy companies? you bet. risky? of course. will some fail? always. do people make mistakes? yes. would you prefer instead that a thousand new Wall Street firms bloom? a thousand new oil companies? And Solyndra's cost to taxpayers, and impact on debt, is a tiny tiny drop in the bucket compare to what's been spent on Iraq and Afghanistan, or the Bush tax cuts for the rich…
Currently, utilities have zero incentive to take any risks, and zero incentive to save money. They only act under duress -- essentially, when the PUCs force them to do something.