The Government Once Built Silicon Valley
techcrunch.com
techcrunch.com
"This book debunks the myth of a dynamic private sector vs. a sluggish public sector by providing a detailed account of the role of the public sector in taking on high-risk entrepreneurial investments, from the Internet to the ‘green revolution’."
The book is more thorough but you can get a lot also out of the free pamphlet available here http://www.demos.co.uk/publications/theentrepreneurialstate
A modern tale of care for a bright and reliable future, search: project byzantium fidonet
To say that the government had a huge hand in silicon valley, and thus all government efforts to produce commerce and innovation are going to have equal results, confuses the issue. (not to mention the universities have changed too). Which I think is the point of most of these pieces.
Nobody said it "always works" -- it's enough to say that if it worked then, it could also work now.
The only thing in this category the government seems to be able to afford these days (other than lots of wasted military spending), is scientific research funding.
Another huge difference is that America has taken on truly massive liabilities, from public debt to entitlements, that did not exist in 1948. Those entitlement obligations alone will squeeze the government's budget to death over the next 20 years. That leaves a lot less money for everything else.
As an economic burden, healthcare has become a huge portion of the economy and government spending compared to 1948, and will remain substantial no matter how they cut and squeeze costs in the coming years. That money can't be spent on bridges, roads, electrical grids, research, etc. It also doesn't help that Americans overall have been much less healthy in terms of diet in the last 50 or 60 years, contributing substantially to that increase in healthcare costs (helped by the government subsidizing things like sugar and corn, and promoting really stupid food pyramids).
Granted ongoing liabilities are a different thing than war bonds
There's a big whopping [citation needed] right here. The fact that the stimulus was unaccountable wasted money is a canard that people with an agenda (and a willingness to ignore facts) like to tell themselves. There have been a multitude of studies estimating the impact of ARRA,and the consensus almost across the board has been positive: several macro firms (Moody, IHS) estimate that the ARRA saved around 2.5m jobs total (up to 2014), and the CBO and other economists estimate that more than 3m jobs were saved by 2011 alone. Note that I'm leaving out any Democratic or White House sources (who had even more positive estimates), to avoid the possibility that they're politically biased. Hell the best the Republicans could do in their campaign-fodder "list of most wasteful stimulus projects" was TWO PERCENT of the ARRA's total.
Even if the Act hadn't done anything useful (which it did), it's widely considered by economists to have prevented a much deeper recession, which alone is obviously worth the expense. In the event that you're focusing not on its overall effectiveness but on the fact that nothing "visible" was built (like a big dam):
1) That's an awfully juvenile way to measure impact ("I don't see big concrete structures going up everywhere! The money must have 'vaporized'!").
2) The ARRA consisted of a huge amount of tax cuts (36% of the 800B), so if you're going to claim that 800B "vaporized", you need to account for the extra productivity from the income effect from those tax cuts.
3) It's very disingenuous to completely ignore context: if our freeways are crumbling and we build shiny new ones instead of maintaining the old ones (which was a significant provision of the ARRA), that would be a pretty stupid idea. And yet, by your metric, that would be preferable in order to have a visible impact.
4) A big chunk of the ARRA was explicitly designed to fill in huge municipal/state-level spending cuts that were choking off local economies (there were towns that were actually shutting their police/other critical services down). If local economies cut N billion and the ARRA replaced that N billion, the ignorant response would be "SEE WE DIDN'T GET ANYTHING FOR N BILLION". I really hope I don't have to explain why comparing against the situation before instead of comparing against the situation that _would_ have occurred absent the ARRA is absolutely idiotic (this was also an issue when people were assessing the macreconomic effect of the Act).
TL;DR: It's an awfully simple-minded approach to say "Where are all the big new fancy buildings??? We barely got anything for the ARRA!". It ignores the tax cuts in the Act, privileges new construction over needed maintenance/upgrades, ignores spending on electronic systems (EMR, etc), ignores the effect of sustaining local spending after huge cuts. It's honestly the _worst_ metric for the usefulness or "economic gain" of an act that I've ever seen.
"What has changed is the bureaucratic culture. The increasing interpenetration of government, university, and private firms has led everyone to adopt the language, sensibilities, and organizational forms that originated in the corporate world. Although this might have helped in creating marketable products, since that is what corporate bureaucracies are designed to do, in terms of fostering original research, the results have been catastrophic."
"The growth of administrative work has directly resulted from introducing corporate management techniques. Invariably, these are justified as ways of increasing efficiency and introducing competition at every level. What they end up meaning in practice is that everyone winds up spending most of their time trying to sell things..."
Also mentions other factors, like concentrating resources into a handful of big projects (like The Human Genome Project).
But either way, much of that innovation spanned decades, it wasn't as if it all happened between 1945-1949.
It's true that you can't wave a magic "public sector" wand and simply repeat the results of the past, for the same reason that the almighty private sector can't simply produce innovations on demand by cargo-culting.
But describing a "post WW2" USG as some kind of entity with tons of cash to waste for decades confuses the issue just as much, to say nothing of conflating wartime military spending with later R&D-style funding.
The government had also had a VERY broad hand in controlling the economy during world war II. And at that time, results mattered. This part of my comment is a bit more speculative, but it doesn't seem unreasonable to think that the government may have been more effective in managing economic affairs in 1945-49.
If anyone has actual sources about this, I'd be very interested. The government of that era gives off the impression of competence. Was it?
My dad worked in public housing in NYC in a bunch of roles into the 90s. At one point, he was part of team responsible for revising procedures for how to run the departments thousands of buildings, equipment and vehicles.
I remember him saying that it was amazing to him that the guys who originally wrote these things back in the 1930s did an incredible job -- they got it right, even though nobody had ever run a system of building a large up until that time. Most of the updates they did were technology driven.
Later, when the city started bringing in external consultants and political hacks, their ability to do anything declined dramatically -- to the point the department was driven to near bankruptcy in the 2000s.
In "the olden times" a lot of these government programs were seen as a higher purpose that were moving society forward.
Modern politicians are just prudent businessmen who only care about the needs of their most affluent customers.
The Fed has been spending a trillion dollars per year in stimulus to bail out home owners and investors (and businesses and banks too) to prop up the economy. That's a massive new deal style program. It amounts to a hand-out to the vast majority of Americans in one form or another, to the tune of trillions of dollars.
Obama fired off a $800 billion stimulus program in 2009, with broad support.
Bush passed Medicare Part D, a trillion dollar program, with broad support.
Bush also increased the size of the federal government by nearly 60% in eight years.
Obama & Congress passed the ACA, which will end up being a several hundred billion dollar per year program with time.
Social Security Disability and Food Stamp costs have skyrocketed, basically doubling in six or seven years. That's a trillion dollars worth of new expenses over ten years.
How much more new deal could you possibly get exactly than the free spending ways of the last 14 years? Much of that spending has been in the form of welfare programs and hand-outs.
The 800 Billion stimulus package was tiny in federal terms with little actual new spending and zero long term budget implications, to put it in perspective there are weapon systems that cost far more than that let alone something like Medicare part D with trillions in long term costs.
PS: The federal budget get's a lot of commentary, but there so much cost shifting between states and the federal budget a lot of the numbers are almost meaningless without a lot of context. Ex: We spend more on education and loan interest than national defense and social security.
If "The American Dream" means that if you're born rich, you'll die far richer, then it's alive and well. Nothing American about that however. It's called an oligarchy and is the dominant form of human society throughout our long and troubled history.
It appears America is desperate to regress to the historical mean, and nothing you or I say can change this, not even in a community dedicated to entrepreneurship. It appears entrepreneurs just want to join the oligarchy, rather than distribute power and wealth more evenly.
We cannot stem the tides of the tsunami that is human nature.
Which is different to how critics responded to them at the time...how?
The New Deal wasn't exactly universally acclaimed and non-controversial when it was proposed.
It was far more accepted though -- as were other kind of policies, and even unions back then. It was a different climate.
The fact that it was not "universally acclaimed" then, doesn't mean everything is the same regarding how the public and the pundits react to such things then and now. The deegre and the quality of the disagreement for one, can change over time.
Sure, in the depth of a massive depression, it was accepted enough as a possible solution that some of it survived, but even then it was bitterly opposed, attacked as anti-American and socialist by its opponents, parts of it didn't make it through Congress (with defections even from the President's party), and of those that did, several were struck down by the Supreme Court, in what were described by supporters of the New Deal as political rather than legally-driven rulings that were the impetus for the "court packing" scheme. And even more were winded down early as the opponents, always numerous, gained more power in Congress in the early 1940s.
You say they would be "ridiculed as Marxism" today -- and they would. By people who are the ideological heirs of the same people that were ridiculing them as Marxism when they were proposed.
> The fact that it was not "universally acclaimed" them, doesn't mean everything is the same regarding how the public and the pundits react to such things then and now.
Things are a lot more the same than they are different. You really seem to be looking at the past through rose colored glasses.
Eisenhower was a champion of his era. He was a soldier who had seen war and death firsthand, and understood the costs. He also understood the severe costs of allowing a nation to be robbed of its dignity by a parasitic oligarchy intent on bringing common working folk to their knees via the machinations of capital. It's not "capitalism" or "laws" that hold a nation together, it's trust. Also known as the social contract.
Go travel and learn about places like Brazil, China, Russia, India and any other developing country in the world. Do you know what they lack as societies? Trust. The oligarchs have rigged the game, and everyone knows it, yet the masses are powerless. America was once the only place where the game was not so heavily rigged. This was a time long ago, and I doubt we shall ever see it again.
I'm not really sure what Eisenhower has to do with the New Deal other than not actively ending the programs that had survived to his Presidency (which were, naturally, the least controversial ones, and ones that by the time he was elected the controversy that had been associated with them had faded.)
> America was once the only place where the game was not so heavily rigged.
No, America -- for most of its history up through WWII (ironically, the New Deal was a major factor in starting to break this up, and the Civil Rights movement did more to unsettle it) -- was once a place where the game was much more heavily rigged, where most states were virtual one-party states, and where national politics was mostly backroom deals between elites that were unchallenged in their own domains. To the extent there are kinds of visible divisiveness and distrust than before, its not because the game is more rigged than in the time you seem to idealize (apparently from Roosevelt's election through Eisenhower's presidency), its because the game is less rigged, and more actively contested.
Even the setbacks (like Citizens United) that are credited with stacking the deck for the elites today are strikes against attempts to limit longstanding ways in which elites have stacked the deck since the dawn of the Republic, not new advanced by elites.
Saying that 200 million Americans will enter the middle class in the next 15 years might be worth pointing out though. Where is he getting that statistic?!
I remember there was an article on HN that described such "income churn" for the population, and it was tremendous how people enter and exit mid to high income ranges throughout their lives.
You can tell immediately by the quality of the statistics they attempt to sell the premise with, for example:
"95% of the world’s consumers live outside of the U.S."
And ~20% of the world's consumption by dollar value occurs in the U.S. It's likely 1/3 of the world's population won't be meaningful consumers in this century. The 95% number - based on population of all things - is entirely worthless.
So I'd be very, very hesitant to make a claim like "It's likely 1/3 of the world's population won't be meaningful consumers in this century."