Should President Obama do more than just admonish????
 

So really? Is this what it will be? "Stop! Or I'll say stop again!!!!"

Why should we continue to bail out BAD BEHAVIOR????

But more to the title of what I posted here. What should the president do? Should he just basically say,"I don't approve of that..." or should there be some sort of ability/penalty for him to be able to penalize these guys for profiteering or even racketeering?

I'm really disgusted at this behavior. It's unconscionable, yet people are continually rewarded for being stupid and greedy.

Seems like a meaningless gesture. There should have been specific earmarking for the money and if they fooled around there are real consequences. Like being fired.

This is why it was stupid to give them the bailout money without setting down ground rules first. What we did in the first bailout was the equivalent of giving 20 bucks to a wino to try and solve the homeless problem. The wino isn't going to put the money into a savings account until he can afford to get a place to live. He's going to buy liquor for instant gratification.

The banks and investment firm CEO's aren't going to give a shit what happens to their company or their clients, or the country. As long as they have their oversized piece of pie as their instant gratification, that's all they care about.

Trouble is, Obama's hands are kinda tied. We gave them the money. We didn't give them the money and make them sign a contract agreeing not to blow it on parties, jets, and executive bonuses.

I can't give you a present and then come back in a month and demand that you give it back because I don't like where you displayed it. And similarly, we can't demand the money back because we don't like what they're doing with it, because the money is no longer ours, it's theirs, and they can do with it as they please.

I think Shakran is absolutely right. But, I think Obama using his bully-pulpit to loudly point out these excesses, and call them out for it, is the best he can do with the money that's already been given out. Congress was effectively railroaded into passing the TARP bill by the previous administration with few strings attached. They were told that fast action was required, and there wasn't 'time' to debate how to control this money. This was true, in a way - the faster you deal with something, the better. But when congress gave them the money, they turned around and handed it to the corporations with no strings (read: 'regulation', and we all know how the republicans hate regulation).

Now, Obama has an excellent argument for putting strings on the money that has yet to be given, and hopefully, will push for proper a regulatory framework for 'innovative' financial instruments. We'll see.

I agree shak, we can't do that.

But we've only given away 1/2 of the bailout money. There is also stimulus money as well that will be coming down the pike.

I believe that we can't do anything about what's already been handed out, but I believe that we should be able to as the taxpayers demand that there be no more money handed out without governance or stipulations.

The sooner everyone wakes up, evaluates this thing holistically and a global jubilee is called on all derivatives, perhaps all debts, and then try to set up an economy based around something other than the manipulated value of social contracts (fiat currency) or pretty-yet-irrelevant commodities, the better.

By the way folks, the bond market is starting to choke under the flood of govt debts being issued around the world.

A certain recently deceased comedian had it nailed many years ago.

Live, Monday night white collar crucifixions, on pay-per-view.

I can't find a link.

What infuriates me is how eager and quick the Bush administration was to implement the bailout that helped mostly the banking leaders and investors, and how there was little if any accountability or transparency as to how that bailout money was being spent; but now how the Republicans are dragging their heels, if not outright taking a stand against, the economic stimulus package that the Obama administration is seeking to implementing, to mostly help the common man.

:mad:

Twenty years or so ago, I used to vote mostly Republican. But nowadays, I despise the Republican Party.

It is interesting how when Obama was running for President he made it clear that any bailout money approved by Congress should have proper controls in place (along with two other parameters) and that in the end he was satisfied with the initial TARP legislation and that it met all of his requirements. He was adored for being calm, reflective, in control, as McCain gyrated all over the place on the issue. They rushed that inadequate, il conceived legislation through and then blamed the Bush administration for not using the money as "they" intended, even though the legislation gave way to much control to the Treasury Secretary and everybody knew it at the time. Now he is calling Wall St. irresponsible as Democrats are rushing more bailout money through Congress with il conceived legislation and inadequate controls so the funds do what they intend them to do - stimulate the economy. President Obama should focus on getting his own House (and Senate) in order.

gee, ace, i thought you'd have understood capitalists as paragons of virtue and regulation an impediment to the optimized unfolding of that virtue, which of course happens to the greatest benefit of all mankind, cranky socialist churls aside...it's consistent with your various other pronouncements that regulation or rules or oversight originating with the state are irrational, problems---but now suddenly you're saying that there wasn't enough regulation or oversight, even though your ideology, like that of the bush people, would have tended to foreclose the need for it on principle. what gives?

and to the op---i'm not sure what more obama can do at this particular juncture---bringing pressure via the press does, however, indicate that he's already broken with the posture of the bush people relative to the financial system, which was on it's knees facing forward and making curious back and forth movements of the head.

The original TARP legislation was bad legislation from the begining, I was against it. In my view we should let weak financial institutions fail. The irony is how quick we went from Democrats being pleased with the legislation to being displeased with it and how the Treasury Secretary did not do what "they" wanted even though they wrote the legislation and bragged about how they went from a (I think) 7 page document to a XXX page document, while saying the Bush administration was a bunch of idiots for what the administration originally presented.

Honesty about the real condition of our economy would be nice and honest about the "stimulus" package. The reality is that this recession would naturally pass even without a "stimulus" package. The real goal is to fund pet projects and issues in my opinion.

yeah, see that last bit is a main divergence. i don't buy your argument at all. at all. i don't think anyone, anywhere buys that because it seems entirely out of phase with reality and more in phase with an attempt to retain coherence for an economic position that's at the root of almost all of this mess by shaving off all reality that's dissonant with it. which is alot of reality.

i don't have the time to wade through the problems with your revisionist interpretation of the tarp process. maybe someone else does.
no offense, but i've got stuff to do.

I wanted to firs point out the obvious irony in Obama's position on Wall St. bonuses. When they (Congress) had the power to address the issue they failed and blame others.

Second, there is the superficial and I would suggest careless nature of his comment. First not every Wall St. firm is in need or have taken federal funds. Some have had profitable years, some managers accomplished their goals and objectives, some firms have contractual obligations with employees to pay bonuses, some bonuses are based on years/decades of service but paid in 2008, etc, etc. etc.

Third depending on what data is used Wall St. bonuses are down about 44% in 2008 compared to 2007.

Bloomberg.com: Worldwide

Prseident Obama's comments were clearly irresponsible and lacked any insight. I think he simply further inflamed class warfare rhetoric, perhaps that was his goal.

I'm sorry when you go to DC with your hand out looking for tax payer money because you've lost billions of dollars and now your company is about to fail your bonus shouldn't be reduced by 44%, it should be reduced by 100%. When you pay back the tax payers and your company goes back to making money then you can write yourself large checks with lots of zeros on them all you want.

And it still bugs me these guys went to DC and basically said "give us money or we fail." And the powers that be couldn't write that check fast enough. Few questions were asked and few safeguards for the use of the money were put in place. Hell I keep reading stories stating no one seems to know where the money's going/went. Looks like some of it went or is going to bonuses.

All that's in complete contrast to the reaction the auto markers got when they went looking for tax payer cash. It was all where, when and how is the money going to be used to turn your industry profitable... oh and by the way how did you get here today? I never heard the Wall St. guys asked if they flew coach.

Perhaps someone can separate the "Wall St." bonuses paid to companies getting handouts compared to those who did not, and executive level bonuses compared to non-executive bonuses. Why lump everyone in the same boat? There are plenty of honest, good, hardworking people on "Wall St" deserving of being paid bonuses based on the terms of their compensation packages.

So separate them. You seem to know the difference. Explain why and who are deserving of being paid bonuses at tax payer expense. Take all those people out the boat who do not belong there, but be sure to explain why.

President Obama made the irresponsible comment about the bonuses.

He read a headline and failed to do what he should have done. He has the power of his office to drill down into the data and actually act on the information rather than simply making an irresponsible comment. The guy is President, he should act like it. Don't you agree that rather than making a statement to the press, we could have been better served by action.

so what you're saying, ace, is that you have no idea which of the various wall street folk who diverted bush administration no-strings-attached bailout monies into personal bonuses wear white hats and which black hats--what you're saying is that some pollyanna faith in the world of financial flows is what is required, even now after their own actions have ground the entire economy to the brink of a significant debacle, which in turn you deal with by pretending it's not there. what you're saying is that stating the obvious--that diverting this bush administration no-strings-attached bailout money into bonuses---was an ill-timed and ill-considered bit of theater is going too far. what you're saying is that we should join you in silent worship of the captains of the financial industry, even now.

that's goofy.

I think the POTUS should point out when bull shit like this happens. Tax payer money, money provided by the Bush Admin., is going to bail out companies that are using some of that money to pay bonuses. You seem to think at least some of these bonuses were going to "honest, good, hardworking people on "Wall St" deserving of being paid bonuses based on the terms of their compensation packages." I think if they deserved them their companies wouldn't need the damn bail out.

So now you say the current POTUS either shouldn't have said he thought it was bull shit or he should have given details of exactly which individuals he was talking about? You want the POTUS to give you a list of bonuses and individuals being wrongly funded by the tax payer? Wonder how long that press conference would run? I think the POTUS made it clear any tax funds going to bonuses was bullshit and I agree.

In your previous post you stated some of these people deserved them. I'm asking you to provide such a list. If you know they exists you must know who they are, right?

This comes down to class bias, pure and simple.

Work for failing Wall St. firm? You're cool. Take bonus, squirrel it away in a Bahamian bank account. No questions asked. We love you!

Work for failing auto company? You need to be fired and relieved of retirement and health benefits.

If what I wrote is not clear ask for a clarification.

The above is goofy and is no reflection of anything I have written on this issue.

Obama voted for the TARP legislation saying it met his requirements. Now he is saying the legislation was flawed. Some blame Bush. I think that is goofy. I think his statement on "Wall St." bonuses was irresponsible and beneath the dignity of the office of President. If that is not clear, let me know.
-----Added 2/2/2009 at 05 : 22 : 49-----
Perhaps, he should use factual information. He seemed to lump the innocent with the guilty. For what purpose? Does he think his statement would actually shame those who would take government money, bonuses, shareholder money, their grandmothers money...etc., etc., if people broke the law investigate and put them in jail. If the law is poorly written with loop holes, fix the law.

There are firms on "Wall St." that did not want/ did not get government money.

Why wasn't it bullshit when they wrote the legislation? Obama and the Democrats are supposed to be "smart", right?

If you want to play. Here is one of note JP Morgan Chase. They would be considered a "Wall St." firm they made a profit in the fourth quarter of 08 and during the fiscal year 08. they did not do as well as in 07, but I would think the people at JPM may deserve a bonus.

No doubt you won't respect any source I give, but here is an excert from their earnings press release, you can do you own homework to verify.

JPMorgan Chase Reports Full-Year 2008 Net Income of $5.6 Billion, or $1.37 Per Share, on Revenue of $67.3 Billion; Fourth-Quarter 2008 Net Income of $702 Million, or $0.07 Per Share - WSJ.com

Now what is your next objection? Let's play! We can do this til the cows come home.
-----Added 2/2/2009 at 05 : 30 : 16-----
Why can't you folks understand the difference between failing companies (GM, Fannie Mae, Country Wide, etc.,) and companies doing well given the recession? Most of the firms on "Wall St." are going to make it through this financial crisis just fine. Washington could have let the weak and failing companies fail. Failed companies don't pay bonuses, because a bankruptcy court judge wont allow it unless all other obligations have been met.

Just admit that the folks in Washington don't know what they are doing.

Pardon my ignorance on this issue, as I haven't fully versed myself on it, but has anyone explained where this money is coming from?

ace...there you go again.

Anyone who doesnt agree with you that corporate tax cuts and tax cuts for the wealthy are the best job stimulus or solution to the worst economic downturn in our lifetime doesnt "know what they are doing."

We tried your way....tax cuts heavily favoring the wealthy, tax incentives and breaks for corporations,de-regulation, etc...and it failed.

Believe it not, ace....there can be honest differences of opinion. Economics is not an exact science.

You dont know more than the rest of us or those in Washington.
-----Added 2/2/2009 at 07 : 04 : 54-----
Unfortunately, the same place as the $trillion that Bush put off-budget to fund his folly in Iraq.

But IMO, there is no other option to "fix" the economy or it will continue to sink. There were other options for Iraq, most notably staying the fuck out since it posed no direct threat to the US.

Like it or not, banks etc. play a central role in today's capitalist economy. Yes, you can let banks fail. Money & goods will then circulate more slowly and in smaller amounts. Get rid of evil fiat currency and that circulation can be even slower and smaller.

In some cases, the motor behind the laissez-faillir argument is a kind of nihilism. In others, it's merely ignorance.

I always thought the TARP came out of the Bush Admin. back in Sept. or Oct. '08 and was written by (mostly) Treasury Secretary Henry Paulson and Fed Chair Ben Bernanke.


I don't think the people in DC know what they're doing. I don't think anyone knows the solution to this deep hole we've dug ourselves into.

Plus I've repeatedly said my objection is not to companies making money and giving bonuses. My objection and my understanding of the POTUS objection is aimed at companies that took TARP funds because they were not profitable and used a portion of that money to pay bonuses.

I've never had a problem with profitable companies paying people whatever they want. Which is why I said-

And my home work shows JP Morgan took 25B in Tarp funs-

http://s.wsj.net/public/resources/im...0125183303.gif

So, they did better after taking 25B in TARP in '08 then they did in '07 when they didn't get an extra 25B, right?

My way? My way would be a simple tax code based on consumption rather than income. My way would be regulation based on clearly defined and measurable goals and objectives. My way would be to allow failing institutions to fail. My way would be fiscal discipline that would rarely result in deficit spending (I think deficit spending is o.k. in times of war or crisis). My way would be term limits for members of Congress. My way would be cabinet nominees pay their taxes in the year the taxes are due with no relationship to being nominated. :thumbsup:
-----Added 3/2/2009 at 12 : 34 : 19-----
Or, the government could do what worked during the S&L crisis if you are in fear of what would happen if the government did not step in. I don't fear bank failures and I think banks when they begin to think they are too big to fail assume more risk. Good conservative, well managed banks should be rewarded, we should not reward failure with bailouts.
-----Added 3/2/2009 at 12 : 41 : 49-----
Yes, and it was "inadequate". Democrats were all over the media talking about it and how they improved it. Obama specifically said the final version met all of his requirements.
Did they have the real option of not taking the TARP money? Did they step in, as a healthy financial institution, and buy distressed institutions and assets? Did they offer mortgage relief to some of their clients? Did they do what was asked of them with the money? However, the real point is that there are people working at JPM that deserve and earned their bonuses. Are you disputing that or are we on a different point?

Ace, i'm sympathetic to your view, but you really can't let the banks fail. They're not like piggy banks, and we're already beyond the S&L debacle. If there is a generalised crisis of confidence in the financial system, any bank could fail because they lend their deposits out and because they deal in IOUs and other financial paper. Banks even deal in instruments derived from financial paper. They do that because it makes sale of goods and services easier and faster. If people have to wait for cash, sales will be fewer and farther between. As a result, equipment is used less frequently, shop floors are more idle, fewer workers are needed. In turn, equipment is not replaced, equipment makers hire fewer workers, who can therefore buy less, and so on. It's not a moral issue, but a question of how slowly you want to reproduce capital and how small you want the economy to be. Slow and small means fewer goods, fewer jobs, -- and fewer capitalists.

In the grand scheme of things, slower and smaller is probably better. However, within a capitalist economy, it is a crisis, and just to remind you, a crisis is a point where the survival of the system is in question. It is in question not only because it becomes unclear whether capital is going to be able to reproduce itself, but because the ideological buttresses of the system, e.g. a 'rising tide lifting all boats' can no longer hold.

What would letting the banks fail look like? I'm honestly curious.

Someone should admonish the esteemed Republican members of Congress and conservative talking heads for repeatedly misrepresenting the stimulus package by suggestion it wont created jobs and/or most of the money is in the out years.

Last night on Fox:
According to the CBO report, the plan could be expected to create 3 million jobs in the first 18 months, with over 2/3 of the funds spent during that period and much of the remaining funds allocated beyond that time frame to support continued long term employment.

Not that I dont look forward to a better plan as a result of the current debate in the Senate. There is room for improvement before final passage, but not room to change the core approach...job stimulus does not require massive tax relief for the wealthiest taxpayers and the corporate sector.

1930.

from this overview of the present mess.
http://www.informaworld.com/smpp/tit...6414492~db=all

this should take you to the table of contents.
the article is the first one:

The Importance of the Financial Crisis
5 – 14
Author: Alexander Nicoll

it offers little, but is a good, if general, reminder of what's at play, how high the stakes are, and of the problems that await should obama remain too mired in the nets of neoliberal thinking.

That link doesn't work for me.

i changed the link.
i think this one will work.
let me know if it doesn't and i'll try something else.

It works. Danke.

Banks fail. FDIC provides coverage for depositors. Regulators take control of the bank for an orderly disposition of assets. In some cases deals are brokered. In 2008 all of the bank failures were handled orderly, same in 2007, 2006, 2005, etc., etc.

Hypothetically, could the FDIC have covered all of the failures?

Of course, we owe the FDIC to New Deal interference in the market place. If those dumbass depositors were smarter, they would have done their homework and stashed their cash in a better bank. They're being rewarded for failure.

Anyway, banks never have enough money to cover a panic. That's the nature of banks. They depend on confidence in the economy and the banking system, so even an innocent, doe-eyed bank could be crushed in a panicky stampede. And even if there weren't, they could be slowly asphyxiated by secondary effects of other bank failures.

You could say the same thing about currency, which would not be unaffected by cascading bank failures.

The US Census Bureau projects the population to increase about 3 million people per year. If the economy creates 3 million jobs our current unemployment rate will stay as it is now, netting no gains. I am not going to speak for the people you mention or defend their words, but I will say Obama's premise that government can create lasting jobs is false. People investing in the future and making valued goods or creating valued services creates lasting jobs. People being freed from excessive taxation and excessive regulation allows for more investment in the future.

The concept is simple if the government takes a dollar from me and spends it on you, nothing of value happened. If the government uses debt, that debt will be paid in higher taxes or inflation in the future.
-----Added 3/2/2009 at 04 : 43 : 55-----
Yes. Two possibilities, one the FDIC could raise premiums or raise funds from member banks. Bank regulators could adjust the rules governing solvency issues so that marginal banks don't get caught in a panic. Or if there is going to be a "bailout", the government could provide guarantees or financial support to the FDIC.

Okay. So let's say we let Citi, Bank of America, Wells Fargo, JP Morgan, Morgan Stanley, Goldman Sachs, PNC, US Bank, and Capital One (what's in your wallet?) die. They all file bankruptcy and then the FDIC then essentially writes checks to everyone who had money in these banks. People take their checks and invest in banks that didn't die. The market stabilizes? I'm serious, walk me through what might happen.

It is called "insurance", which is different than rewarding failure. Buying insurance and paying a premium to manage risk is a good thing in my view.

That is why the Federal Reserve lends money to banks - to cover their short-term needs.

I am not sure where you want to go with this, but my point is that there are safe-guards in place. the folks in Washington panicked and for some reason would not allow the system to work. So you had failed institutions that assumed too much risk going to Washington asking for a "bailout", they sell a story that the world would end if they failed, Washington bought in to it, the banks who got "bailed" were put in position to laugh all the way to the "bank" with big bonuses and all at tax payer expense. Washington in a way got suckered. Obama assured us that controls were in place, he was wrong or he lied. Now he lumps the good with the bad.

3,000,000 more people means 3,000,000 more diaper buyers, pumpkin eaters, tire buyers, etc. all of which creates a certain potential for jobs outside whatever is created in the Obama package.

population growth is not equal to labor force growth. Labor force participation in the US is 65% of the working age population.

In any case, considering how much of the "investing in the future" actually comes from the government, yes, public investment does create lasting jobs. And considering the current stimulus package emphasizes health and education spending above all, you can bet that it is investing in the future.

First, there is a difference between demand deposit accounts (checking/savings) and investments made by financial institutions. Not all the institution you list had the same problem, so I don't know what you want me to address. In some cases investment banks were highly leveraged using investors money seeking high returns using collateralize mortgage agreements. This almost had nothing to do with normal banking operations. With the housing bubble bursting the underlying value supporting these agreements made some of them worthless. On the other side of these transactions some made profits. The problem became liquidity in the system and that is what Congress tried to address. However, if the pain of re-valuing real-estate is going to be felt, you can delay it but you can not make it go away. The original TARP legislation was a joke in the fact that anyone thought it would have a real impact on liquidity in our banking system.
-----Added 3/2/2009 at 05 : 11 : 18-----
Good point. But, my point is that under normal economic conditions our economy creates jobs. If government takes credit for that, I think it is misleading at best.

Government is a net drag on any economy (Because if they take $1 from me to give to you, most likely you would get the benefit of less than $1 - they have to cover the cost of private drivers for senators and stuff like that). Sure we can have a population come to an agreement to invest in a interstate highway system that provides tremendous value to an economy but the fact is in order to build it and maintain it - it is all done with taxes taken from everyone or those who use it. The value did not come from government, the value came from people who paid for it.

-- except that some of those investors were banks who were involved in normal banking operations.

Yes I meant checking/savings. Considering the size of the bailout, I suspect most of the banks I listed were in serious trouble. Citi, by all rights, should be dead. BofA may have died, too. Still, even if those banks failed and the check/savings were paid by the FDIC, do you think that could have even slowed what we're heading into now? I'm not being facetious, btw.

The economy doesnt work like that. It is not a zero sum game (which is Keynes central insight, which is pretty much widely accepted today). The bail out last year prevented a much larger sum of assets from disappearing in thin air,as imperfect and flawed as it was. And there are several sectors where the government is significantly better at doing than the market, and often "government" and market are so intertwined as to be hard to separate.

It is really hard to have any investment in basic science, for example, without government intervention. Can't think of a single major innovation of the past 40 years that did not include heavy government investment.

Real assets don't disappear. Leverage against real assets can cause financial ruin. Given a decline in the value of underlying assets those highly leveraged became insolvent. De-leveraging the highly leveraged by government means rewarding the biggest risk takers and is still like a shell game because no matter how you look at it or what you do the market has to adjust to the new lower prices of the underlying assets and someone has to incur the costs. This is a painful process.


A very few areas, in my view, like providing for national defense is something government is better suited to provide .

When we look at innovation in the private sector compared to government there is no comparison. For example Cisco Systems invested $1.4 billion in R&D in the fourth quarter of 2008, if we added all the R&D investment by US corporations and compared it to Government spending on R&D we would find government R&D spending small in comparison. Then if we looked at the return on the dollars invested the difference would be even bigger. In most cases government is not even interested in their R&D investment translating to something useful to society.

Cisco would not even exist if it were not for basic research funded by DARPA and other organs of the Cold War state.

How do you know?

uh, ace---that's simply a historical fact. maybe in your platonic counter-universe forms exist eternally, nothing is created--rather there are only occasions that enable these forms to surface--but since that surfacing is inevitable, all occaisons are equivalent--so if it hadn't been via DARPA, it'd have been via some other medium. but that's metaphysics, not history. and i don't think you're consistent enough to be a platonist, so i think your position is just zany.

Well, Ace, had they had the resources and power of the state, I suppose they could have done it all themselves, but i think it's safe to say that Cisco depends on technology developed with funding from the Cold War state.

In fact, computers as we know them were developed with funding from the state. It's the same for networking and computer languages -- even the browser which allowed the commercialisation of computer networks was developed in a state-funded lab.

There is no comparison unless we actually, well, do the comparison. R&D spending in the US was mostly done by federal government, and only went below 50% after the 80s, but it is still around 40%, give or take a couple of percentage points

Government spending on R & D does not compete with private spending on R & D. In fact, most research find them to be complimentary, with increases in govt. R & D spending leading to increases in private R & D spending and no evidence of crowding out. Which is intuitive even, given that such investment is done at different stages of research.

With regards to returns, of course the difference would be bigger. Which is why we need public funding in the first place. Basic research, vaccines, treatment for certain diseases and so on generally require a significant investment with high risk, but needs to be done anyways. Virtually every household item, electronic item, or medical treatment only exists today because of massive spending on R&D by the government, usually investing in non profitable things like the space race, military innovations, and so on.

Using the logic here, we should give Adam and Eve (or the amoeba responsible for the evolution of man) the credit for all innovation.

I don't have the ability to say what might have been, the assumption that if not for government Cisco would not exist, is just that - an assumption, not a fact.
-----Added 5/2/2009 at 12 : 21 : 26-----
This game you want to play goes no where. O.k., what about electricity and the research that lead to our ability to harness it. That was not government, that was before any innovation in computer technology.

ace--do you know *anything* about the history of silicon valley?
it doesn't matter either way to me---it's more a question that will indicate the kind of conversation that's possible.
if you know anything about that history, the intertwining of defense department r & d money with the formation of the institutional infrastructure than enabled silicon valley to take shape is self-evident.
there's really no arguing about it, unless you want to leave reality entirely behind.

guyy's making the same point. dippin's making the same point.
you have no argument, ace.

Your view is a myth. Even when government gives funds for research it is often just a fraction of the actual cost of the research. I don't even know how to discuss this with you guys. Just look at any industry, any product, scientific knowledge and trace it to it source and its source of funding. Almost never, government.
-----Added 5/2/2009 at 12 : 27 : 50-----
No. I am a complete boob. I know nothing. I make it all up. I am always wrong. Is that the answer you seek.

That is a fallacy. The examples they gave were not of some obscure or far removed innovation.
-----Added 5/2/2009 at 12 : 33 : 35-----
You do know we are not talking about opinions, here, right? That the amount spent yearly on R&D has been actually accounted for for decades, right?

I am talking about yearly data and you are talking about myths?

And I find it funny that all discording opinions are myths when you've yet to provide either data or concrete examples.

I am going to assume there is simply a misunderstanding at this point, because I can not believe that there is any possibly way that we are suggesting that government is responsible for the products produced by a company like Cisco or the patents they hold. Why would the government allow Cisco to make billions in profits over the years on R&D done at the expense of tax payers? Why would the government allow a private company to file patents on intellectual property developed by the government? Either I mis-communicated my point or I am misreading the point you and others are making.

ace--you cannot be serious.

the arguments have been pretty straightforward---companies like cisco have assumed and benefitted from infrastructures that would not exist were it not for state funding.

if you want to make this over into a more general propostion, it'd be that neoliberals like yourself have no coherent sense of history, and so conflate the results of the past, of past actions--in this case of extensive and sustained state funding for mixed public/private sector research, the construction of institutional infrastructure, the fashioning of political power in ways that was able to sustain such funding and redirect it to other ends over time--neoliberals conflate the results of history with phenomena like rocks. neoliberals cannot address questions of infrastructure, public goods, or much of anything else coherently because they cannot deal with the past. they prefer to pretend it isn't a factor. and in the process, they simplify their way out of coherence.

I watched the video and it is interesting.

To be clear I agree a company like Cisco has benefited from government R&D and infrastructures put in place by government. However, taken as a whole innovation, even in Silicon Valley, has had more to do with private investment and innovators, than in government investments in R&D. After WWII, the government's initial $450 million investment in microwave/radio technology is significant if equated into today's dollars, however, like we know a company like Cisco is investing about $1.4 billion in R&D per quarter. If your argument is that because of a military need, government initiating investment in certain technologies means that the government is responsible for all R&D that stems from that initial investment - I can see how our views diverge. I used Cisco as an example because I was looking at their earnings today, however, if we look at all industry by category like, pharmaceuticals, consumer goods, automotive, energy, construction, agricultural, telecommunications, aeronautics, medical, etc., etc., etc., etc., government R&D is just a small drop in the bucket compared to what is going on in the private sector.

No internet based private venture would exist today w/o Al Gore's "invention of the internet".

What Gore in fact said and did was sponsor the legislation, the High Performance Computing Act, that created the National Research and Education Network with federal funding...which became the "information superhighway"...which became the backbone of today's internet.

In fact, the first browser, Mosaic, was funded by a federal grant under the HPCA to the Netscape guys who were at the Univ of Illinois at the time.

Government funding is at the foundation of most technology R&D, medical R&D, envrionmental/energy R&D, etc. It always has been, starting w/ the railroads and the industrial revolution. In fact, IBM credits in existence today to a heavy reliance on federal grants from its infancy in post WW II through the 80s.

Another fact, in the emerging area of biomedical science, the US has fallen behind the rest of the world (EU, Israel, India...) as a result of significant budget cuts to NIH over the last eight years.

Without a base (most often from government R&D funding), there is little private sector innovation or what innovation does emerge tends to crumble w/o that base.

I am not suggesting at any point that government funded R&D is necessarily superior to private investing. Nor am I suggesting that the private sector R&D is a rip off of government research. You see, it is not necessary to believe these things in order to see a place for government investment in R&D. All it takes for one to believe that federally funded R&D is important is to believe that it does not crowd out private investment and that it has some positive impact on our knowledge base. And in fact most research suggests that increases in govt. R&D spending actually leads to increases in private R&D.

Because the only way that federally funded R&D can be seen as a waste is if it crowds out similar private investment, but that is simply not the case, because federally funded R&D is often aimed at either military innovations, basic research or, when it is applied to final products aimed at civilians, it is usually medical research. The private sector often builds on these to produce specific consumer products, and as such it is just as important and not necessarily a "rip off" of government research.

Cisco started building multiple protocol routers. It was their unique innovation, but that was based on things that were created or improved through federally funded research.

So as you see, the position that federally funded R&D is useful is much easier to sustain than the position that government spending on R&D is useless.

That has never been my position. I just try to put government R&D investment into perspective. I am still amazed by what I think I am interpreting correctly, that many believe that just because government had some involvement that if not for that involvement there would have not been any growth or development in certain technologies, like the internet or "silicon valley" in general.

That's because you prefer ideological abstraction to history.