Patterico's Pontifications


Rick Perry: Hey, I’m Doing Pretty Well in That Poll at “Hot Gas”

Filed under: General — Patterico @ 6:44 pm

I love this guy, I really do . . . but man. “Hot Gas”?

Allahpundit has a hilarious take:

Via Mediaite. My memory’s hazy but, as I recall, “Hot Gas” was one of the three finalists when we sat down to name the site in early 2006. Michelle had the trump card so we ended up where we ended up, but I’ve always wondered what might have been if my personal preference had won out. Imagine it: “Gassy Air.” Five years later, Perry would have turned that into “Gassy Gas” in today’s interview, which would have been a clip for the ages. Ah well.

By the way, I thought Tommy Christopher’s low point was when he insisted Nikki Reid was an underage girl, even after being told by Gennette Cordova that Nikki Reid was a fake. But I was wrong. Today he called Hot Air “the Michelle Malkin-founded, Ed Morrissey-run Hot Air.” Please! I love Ed, but the real attraction there is, and always has been, Allahpundit. For this gaffe, Christopher should turn in his press pass.

A Simple Observation About Job Creation and the Free Market

Filed under: General — Patterico @ 7:27 am

When we talk about how many jobs some government official or entity has created, we are missing the point, and falling into the trap of using the other side’s terminology.

In connection with Karl’s point below about regulation: government doesn’t create jobs, except when government actually hires people. Government creates jobs by getting out of the way.

The free market isn’t some crazy abstract libertarian concept. It is what happen when millions of individuals make decisions on their own about what is best to buy and sell. When those decisions are free and unfettered by government intervention, the results of those decisions are determined by the collective wisdom of all those millions of people. When the decisions are handed down by a central authority, the results are determined by a handful of people who think they are smarter than the country as a whole.

I employ this model in blogging. I rely on readers because I don’t believe in the model of blogging where the blogger is like a cult figure, to whom everyone pays obeisance and talks endlessly about how brilliant they are. I believe in the model of blogging where you bring a bunch of smart people together to form a community. No matter how smart any one blogger may be, chances are their audience is, collectively, smarter. That’s because groups of people tend to have more collective brainpower at their disposal than any one person.

The same goes for the economy. When the central Soviet authority decided who was going to grow how many crops where, they didn’t know what the farmers knew. And people starved.

The free market is just free people making decisions for themselves.

So let’s not talk about who created more jobs. Let’s talk about who got out of the way — and let employers create more jobs.

David Brooks: Wrong on Regulations

Filed under: General — Karl @ 6:06 am

[Posted by Karl]

In his latest column, David Brooks argues that Obama’s regulations aren’t crushing jobs and the economy.  However, to reach that conclusion, he has to engage in a lot of single-entry accounting.

Brooks relies on a report from the Center for Progressive Reforms (gee, I wonder what ideology might be at work here) to note that “Obama has certainly not shut corporate-types out of the regulatory process.”  Incidentally, the thrust of the CPR report is to claim that regulatory policy is driven more by raw politics under Obama than it was under George W. Bush — a conclusion Brooks prefers to overlook.  But the big flaw is the subtext that regulatory capture somehow means that the resulting regulations do not hurt businesses or the economy.  I would suggest the prior regulatory regime for the financial and housing sectors ultimately proved disastrous to the economy and employment (lefties and righties would have some different culprits for this, of course).  More generally, the entire history of progressivism is marked by regulatory capture in which big businesses extract competitive advantage over small business.

That Brooks does not understand the effect of regulations on small business is evident here, too:

The Bureau of Labor Statistics asks companies why they have laid off workers. Only 13 percent said regulations were a major factor. That number has not increased in the past few years. According to the bureau, roughly 0.18 percent of the mass layoffs in the first half of 2011 were attributable to regulations.

There are a number of flaws with this argument:

The first problem is that economic hardship does not come with labels. Employers know if their costs are rising, but not necessarily whether it is due to new burdens imposed on their suppliers or other factors. They may know that they did not obtain the capital they needed, but not whether it was because investors had better opportunities or because of government financial rules. They will know if demand has slumped, but it is not so clear whether it was because their product is valued less by the marketplace or because government rules choked off demand from customers. Despite the orderly and specific categories provided by the BLS, the real-world causes are likely to be mixed, rather than fit neatly into one column or another.


The BLS figures are also incomplete, including only mass layoffs of 50 workers or more at a time. Those are the layoffs that make headlines, but such mass layoffs are only a small part of the job-loss picture. Many, if not most, layoffs affect fewer than 50 workers at a time. Most small businesses, in fact, do not even have 50 employees in total.

In contrast, according to Gallup, small business owners are most likely to say complying with government regulations is the most important problem facing them today.  On top of that 22%, another 5% cite “new healthcare policy” and another 9% cite “poor leadership/government/president.”  Similarly, a Chamber of Commerce survey found small business owners still find economic uncertainty to be their most-pressing concern (53%), but also worry about uncertainty from what Washington will do next (39%), and the healthcare law (33%).  Nor does Brooks take into account the degree to which policy uncertainty creates a drag on small business hiring, particularly during the Obama administration.

Brooks also claims that “industries that are the subject of the new rules, like energy and health care, have actually been doing the most hiring.”  Here again, Brooks seems ignorant of the product of regulatory capture and government that believes in the broken windows theory of economics.  Promoting the hiring of paper-shufflers to meet regulations that depress the creation of more productive jobs is no way to help the economy.

And yet Brooks, being Brooks, buries this mid-column:

Over all, the Obama administration has significantly increased the regulatory costs imposed on the economy. But this is a difference of degree, not of kind.

I’m sure that’s very encouraging to the unemployed, including those who have completely dropped out of the labor pool.  Maybe they can get through the winter by insulating their homes with copies of the Federal Register.


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