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Debunking “America has become so anti-innovation – it's economic suicide”

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Re: Debunking “America has become so anti-innovation – it's economic suicide”

#61

Post by pixl97 »

ThomPete wrote: post #56
pixl97 wrote: post #41

Earlier quoted context omitted.

Ehh, maybe. Then again the Great Retail Apocalypse of 2017 may lead to to think otherwise. US retail is massively overbuild, most of that because the companies are allowed to take on tens or hundreds of millions of debt. This debt acts as a buffer "It's only bad now, it will be better soon, we promise". By the time feedback signals give a clear message that the investment will never be repaid investors are overextend…

That industrywide, the individual companies will soon find out if the overinvested or not.

The old saying "The market can remain irrational longer than you can remain solvent" always applies.

It really doesn't matter if you are a responsible company that takes on low/no debt if a significant number of your competitors take on debt, and their investors allow it. "Soon" is highly overrated. Amazon is going to make lots of money 'soon' unless they are wrong about future market conditions, yet their investors have given them a pass at reinvesting most of their money for growth. Entire industries can commit irrational actions for long periods of time and have plenty of analyst attempt to rationalize the situation.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#62

Post by Robotbeat »

otalp wrote: post #52
Robotbeat wrote: post #39

Earlier quoted context omitted.

"Interesting that he mentions Elon Musk when his companies are literally kept alive by billions in government subsidies and contracts." Your point would be stronger without this falsehood. Both SpaceX and Tesla could do business without subsidies and government contracts. There were times during the worst parts of the Great Recession when this WAS true (and both businesses benefited from the technology and general en…

Without the NASA contract in 08, SpaceX would have gone down, according to Musk himself. It's true that they are increasingly less dependant on the government, and they hopefully reach a point soon where they are completely independent. But in the early stages when they weren't making profits, government contracts were crucial in keeping SpaceX alive and is the reason they exist today. >If innovative corporations nee…

"Without the NASA contract in 08, SpaceX would have gone down, according to Musk himself."

Yeah, that's what I said in my above post. In the depths of the Great Recession, both were on the razor's edge, and the government helped a lot for both (particularly SpaceX). But this situation was temporary, not current.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#63

Post by padobson »

frgtpsswrdlame wrote: post #49
padobson wrote: post #45

Earlier quoted context omitted.

It's fine to call me and Rothbard and other proponents of Austrian economics kooks, if that does it for you. But where's your counter example? What book should I read to become enlightened? If I was curious enough to read Rothbard's book from 1963, don't you think I'd at least consider your recommendation? If you can find me a Keynesian who can explain a systemic financial crisis without ringing their hands and shout…

>But a systemic problem demands a systemic explanation. Austrians give us monetary policy. Keynesians give us greed. Keynesians give regulation. If you're unwilling to consider the ideas of someone who believes that capitalism is reckless, that greed does cause financial crises and that regulation is an answer, then why are you asking for a book recommendation? You should also note that I believe in regulated markets…

Your argument against the mixing of politics and economics seems reasonable to me, and I am definitely going to read your suggestions and reach out for further discussion.

I'd like to see a separation of politics and economics too, I just think that's sort of a utopian ideal. What I really want is a separation of coercion and economic opportunity. Pre-Fed, most concentrations of wealth were driven by private-sector coercion - industrialists like Vanderbilt, Carnegie, and Rockefeller coerced both their competition and their labor force, which is as equally distasteful to me as government coercion leading to concentrations of wealth.

Anyway, I'll get back to you. Do you have some social media or email address I can reach out after I've read your suggestions?

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#64

Post by kbenson »

otalp wrote: post #59
kbenson wrote: post #23

Earlier quoted context omitted.

> He cites SpaceX as this idea of private investment, completely overlooking the fact that the government is subsidizing the whole endeavour. Please.... Take your pick of any of the major US industries. Chances are the successful players they take a lot in subsidies. None of the Musk companies are really outliers in this, they just get a lot more attention (e.g. GM, Boeing, and GE all take a lot of subsidies).

True that Musk is absolutely not an outlier. But you can't really use him as an example of a company doing all their innovation without any government help. I'd rather the government fund SpaceX and Tesla than Exxon anyway.

You know, I was fully in agreement with you, but I just went looking for numbers and apparently Space X has only received about $20 million in local incentives and rebates for a space launch facility in Texas (although I'm not sure about the "only". That info is generally prefaced by a note that Space X doesn't disclise financial info, and I'm not sure if that implies there could be more or not). Almost all of the $4.9 billion that it's been reported his companies have received in subsidies is for Tesla and Solar City.

So, apparently the example is actually better than it seemed to both of us.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#65

Post by padobson »

ska wrote: post #58
padobson wrote: post #51

Earlier quoted context omitted.

Ahistorical. As in not backed up by history? You'll have to cite with examples. Here's some of mine: Amsterdam opens the precursor to central bank in 1609[0]. Less than thirty years later, one of the earliest speculative financial crises on record demolishes the Dutch economy.[1] In the early 20th century, fractional reserve lending practices paired with a rapidly growing economy leads to the first banking crises, mo…

I am of course not suggesting Austrian school has paid no attention to history. Insufficient, perhaps :) I'm objecting to the rather stronger (than an austrian would make) statement that :"systemic financial crises cannot happen without cheap,printed money ". Emphasis mine. You even have to squint very hard at your first example to make it fit - it's increasingly hard to try and argue from anything pre 18th century.…

I think all of your points are valid. It IS a complex subject, and we should be open to many view points. There are certainly a number of lines of attack on my ideas that are valid and reasonable.

I bristled at the idea that my statement is ahistorical. It may have other problems, but I've yet to see any historical counter examples - a period of mass-deleveraging leading to economic retractions in the absence of artificially low interest rates. If you can cite an example like that, I'll rethink my statement.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#66

Post by otalp »

kbenson wrote: post #64
otalp wrote: post #59

Earlier quoted context omitted.

True that Musk is absolutely not an outlier. But you can't really use him as an example of a company doing all their innovation without any government help. I'd rather the government fund SpaceX and Tesla than Exxon anyway.

You know, I was fully in agreement with you, but I just went looking for numbers and apparently Space X has only received about $20 million in local incentives and rebates for a space launch facility in Texas (although I'm not sure about the "only". That info is generally prefaced by a note that Space X doesn't disclise financial info, and I'm not sure if that implies there could be more or not). Almost all of the $4…

Subsidies are one thing, contracts are another form of support. Government contracts are what kept SpaceX afloat in 08, when they couldn't find private clients, and these contracts can be excess of 100 million.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#67

Post by ska »

padobson wrote: post #65
ska wrote: post #58

Earlier quoted context omitted.

I am of course not suggesting Austrian school has paid no attention to history. Insufficient, perhaps :) I'm objecting to the rather stronger (than an austrian would make) statement that :"systemic financial crises cannot happen without cheap,printed money ". Emphasis mine. You even have to squint very hard at your first example to make it fit - it's increasingly hard to try and argue from anything pre 18th century.…

I think all of your points are valid. It IS a complex subject, and we should be open to many view points. There are certainly a number of lines of attack on my ideas that are valid and reasonable. I bristled at the idea that my statement is ahistorical. It may have other problems, but I've yet to see any historical counter examples - a period of mass-deleveraging leading to economic retractions in the absence of arti…

Ok, I don't have time to do this properly but as a first pass:

1) I think you are now narrowing quite a bit ".. mass-devleveraging ... interest rates"

2) Consider e.g. sovereign defaults of England and Spain in 14th, Roman bank collapses & liquidity issues - multiple times during both Roman and Byantize (will posit that many early issues are difficult to separate from wars, but there were fairly clear panic effects in iirc 3rd and 4th). Italian banks in 14th c. etc.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#68

Post by kbenson »

otalp wrote: post #66
kbenson wrote: post #64

Earlier quoted context omitted.

You know, I was fully in agreement with you, but I just went looking for numbers and apparently Space X has only received about $20 million in local incentives and rebates for a space launch facility in Texas (although I'm not sure about the "only". That info is generally prefaced by a note that Space X doesn't disclise financial info, and I'm not sure if that implies there could be more or not). Almost all of the $4…

Subsidies are one thing, contracts are another form of support. Government contracts are what kept SpaceX afloat in 08, when they couldn't find private clients, and these contracts can be excess of 100 million.

If we start counting government contracts as "support", there's a whole bunch of companies that need to be viewed in a different light. Every defense contractor for one. Every company that sells to the public school system for another.

It's not like these companies are getting something for nothing, they still have to provide a good or service.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#69

Post by throwaway47861 »

> Other than Juicero and some sweeping statements about the technology, energy, and pharmaceutical industries benefitting from government research, Tarnoff offers little evidence to back up these claims.

The "debunked" article is not scientific in 100% of the meaning of the word, that's a fact -- but if we go by the message of this "debunker" this means we must doubt every single deduction we make in our lives, on the grounds of what? Oh, none of us can't access all the information on the planet in real time. Legit as hell, lol. Let's face it, none of us is Skynet-like and yes we will always work with sparse data. Trying to make a good use of those is not a bug. It's a damn good feature.

Far too often I am seeing a very perverse and backwards "arguing" on HN these days -- people grossly underestimate our innate human ability to draw rather good conclusions based on incomplete data, and constantly require "scientific proof" about pretty much anything. Science doesn't have data on most of what's happening on this planet however. And that won't change for a long time still.

We make do with what we have. The rest are yelling "give me evidence!" in non-deterministic areas like country/world economics. Heh, OK.

Re: Debunking “America has become so anti-innovation – it's economic suicide”

#70

Post by frgtpsswrdlame »

padobson wrote: post #63
frgtpsswrdlame wrote: post #49

Earlier quoted context omitted.

>But a systemic problem demands a systemic explanation. Austrians give us monetary policy. Keynesians give us greed. Keynesians give regulation. If you're unwilling to consider the ideas of someone who believes that capitalism is reckless, that greed does cause financial crises and that regulation is an answer, then why are you asking for a book recommendation? You should also note that I believe in regulated markets…

Your argument against the mixing of politics and economics seems reasonable to me, and I am definitely going to read your suggestions and reach out for further discussion. I'd like to see a separation of politics and economics too, I just think that's sort of a utopian ideal. What I really want is a separation of coercion and economic opportunity. Pre-Fed, most concentrations of wealth were driven by private-sector c…

Unfortunately I'm one of those guys so I keep all my profiles firewalled. I do post several econ stories to HN every morning so you'll definitely be able to find me.
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