Thursday, September 30, 2010

Core Incompetencies

I always read Stuart Staniford's stuff. I guess it is to be expected of a scientist (he is a physicist) but his posts never fail to be rational, insightful, data-driven, and well-reasoned.

The following is his most recent post in its entirety, with the response that I had written him:

----------------------------------


NYT columnist Thomas Friedman has a worth-your-time column today:

The Tea Party that has gotten all the attention, the amorphous, self-generated protest against the growth in government and the deficit, is what I’d actually call the “Tea Kettle movement” — because all it’s doing is letting off steam.

That is not to say that the energy behind it is not authentic (it clearly is) or that it won’t be electorally impactful (it clearly might be). But affecting elections and affecting America’s future are two different things. Based on all I’ve heard from this movement, it feels to me like it’s all steam and no engine. It has no plan to restore America to greatness.

The Tea Kettle movement can’t have a positive impact on the country because it has both misdiagnosed America’s main problem and hasn’t even offered a credible solution for the problem it has identified. How can you take a movement seriously that says it wants to cut government spending by billions of dollars but won’t identify the specific defense programs, Social Security, Medicare or other services it’s ready to cut — let alone explain how this will make us more competitive and grow the economy?

and


The issues that upset the Tea Kettle movement — debt and bloated government — are actually symptoms of our real problem, not causes. They are symptoms of a country in a state of incremental decline and losing its competitive edge, because our politics has become just another form of sports entertainment, our Congress a forum for legalized bribery and our main lawmaking institutions divided by toxic partisanship to the point of paralysis.

The important Tea Party movement, which stretches from centrist Republicans to independents right through to centrist Democrats, understands this at a gut level and is looking for a leader with three characteristics. First, a patriot: a leader who is more interested in fighting for his country than his party. Second, a leader who persuades Americans that he or she actually has a plan not just to cut taxes or pump stimulus, but to do something much larger — to make America successful, thriving and respected again.
I'm completely with his analysis so far...  Then he presents his diagnosis...

Democratic Pollster Stan Greenberg told me that when he does focus groups today this is what he hears: “People think the country is in trouble and that countries like China have a strategy for success and we don’t. They will follow someone who convinces them that they have a plan to make America great again. That is what they want to hear. It cuts across Republicans and Democrats.”

To me, that is a plan that starts by asking: what is America’s core competency and strategic advantage, and how do we nurture it? Answer: It is our ability to attract, develop and unleash creative talent. That means men and women who invent, build and sell more goods and services that make people’s lives more productive, healthy, comfortable, secure and entertained than any other country.
He goes on to briefly share some ideas on what it would take to strengthen this "core competency" of innovation and creativity.

I have very mixed feelings here.  On the one hand, I think he's absolutely right that this is America's core competency.  On the other hand, there's a sense in which what he proposes is doubling down on the strategy that got us into trouble in the first place.  It's not like our current problems are because we stopped innovating - just look at the patent stats - or stopped working our asses off.  No, our current problems are precisely the unpleasant side effects of prior innovation.  Americans invented assembly-line auto-production, and now we're struggling with needing more oil for the resulting cars than is easily available.  Americans invented the internet, and now we're struggling with competition from low cost workers overseas competing via that same Internet.  Americans invented industrial robotics, and shipping containerization, and now we're struggling with declining manufacturing employment as workers must compete with both machines and globally sourced production.

So Friedman's diagnosis amounts to a Red Queen situation.  We are not running hard enough to stay in the same place, so we should run faster.  Damned if we do, and damned if we don't, as far as I can see at the present.

END OF POST at earlywarn.blogspot.com

----------------------------------------------



Hi, Stuart:

I think that the situation is somewhat more complex...

The U.S. financial system is a fractional reserve system - money must be lent into existence. I believe it was Mike Shedlock that coined the term "Peak Credit", and the permutations of events stemming from that circumstance are rather numerous and problematic.

Every debt is an asset on someone else's balance sheet. As debts are paid down or defaulted upon (the definition of "Peak Credit"), wealth (debt) in financial form is destroyed.

For societies, core competencies also come with core incompetencies... the tax burden placed upon the worker to support the elderly... wasteful programs (broken window fallacy)... the uniquely American incompetency to produce more criminals, miscreants, and gold-bricks (prison population, false disability claims, workers refusing jobs in Agriculture while collecting unemployment...)

Given peak credit, we might be best working to correct our incompetencies rather than improve our core competencies. At least somewhat.

16 comments:

Donal Lang said...

To me, the USA had oil (more than Saudi!) with lots of space and lots of natural resources which created an economic climate encouraging the World's brightest and best, from German and British scientists into the Manhatton Project through to university lecturers and silicon pioneers from Asia.

The big question is; where will they go next?

I'd say the answer is Asia; Singapore now, maybe China tomorrow.

Why? Because (apart from all the financial problems) the USA seems to have given up on excellence, especially in education. A high proportion of schools and students are failing and you are not capitalising on one youth resource you have; the children of immigrants (including illegal ones). And you Greg have pointed out how expensive a good university education is, about 10 times that of Europe, for example.

One third of the university degrees in India are technology degrees, and all their degrees are taught in English. China is catching up fast. Both countries take technical higher education very seriously, and each country has a middle class of about 300m people, the same as the US population.

Couple of points; Sir Tim Berners Lee, a Brit, invented the internet, the Germans and then the Japanese invented robotics (don't suggest that it was Henry Ford, the British mills produced standardised production machinery in the 1780's!). The Brits invented containerisation in the 1800's with the first RCH container on the 1920's British railways.

However I'll accept that the USA has taken the concept of fiat currency, the entertainment industry and legal recourse to new depths!

PioneerPreppy said...

It amazes me the twisted logic a progressive can come up with.

"The children of immigrants"?

Every little bit of legislation that passes through the US congress MUST have some form of minority education attachment. From the Obamacare travesty to emergency teacher aid for 26 billion all the way back to the community reinvestment money grab of the 90's.

Over the last 30 years or so women have gained some 15 to 20% of all college grads at the expense of (mostly white) men by riding the wave of this minority push.

And yet here again some misguided liberal progressive wants to imagine himself in a white cape as Captain Minority defender-man. Getting his superiority fix while (other) white males pay the price.

It never occurs to these types that countries like China and India are making educational and technological gains because they don't waste time and money on immigrant and minority entitlement. No that just doesn't get that leg tingle going does it?

K said...

Another American core competency is bullying small countries. I really hope America doesn't get better at it.

I think America's strongest core competency is advertising, a.k.a. bullsh!tting.

Donal Lang said...

PP; in every Western economy there is a problem that the baby boomers (generally white and middle class) aren't having many kids, but their kids go to the best schools and colleges because they generally live in the best areas and have the highest disposable income. The later immigrant families have more kids (which will be the future workers and on whose skills the future economy will depend) tend to be lower income and live in poorer neighbourhoods and don't get such a good education.

If you want to build your future economy therefore, you have to invest in the next generation by funding education where most of those kids live.

Laws about equality mean nothing, its the actions that count. You tell me if Hispanics and Blacks get an equal education to middle class white kids?

You can call me names, stick badges on people, rant about liberals, and look at everything in your world through your right wing prejudices, but you can't escape the facts. Deal with reality, or.....

Anonymous said...

This concept of "innovation" is really interesting. We tend to view innovation in terms of new industrial or technological gadgetry. Tho some would suggest that innovation really is just finding new ways to piggyback off the (late)fossil fuel bonanza that is now receding into history.

Innovation can take many different forms- cool gadgetry, diabolical weapons of war, manipulative marketing, Orwellian social controls, sophisticated big-finance thievery, pumped up housing bubbles, etc etc.

However, as the oil-built US economy begins to lose access to it's life blood (Export Land Model & Jeffrey Brown), innovation will need to take a really radical turn if the US is to survive this transition.

Best, Marshall

Anonymous said...

So many of our so called 'innovations' as Marshall mentions, have serious self-destructive qualities to humanity--either noticeably or more covertly. The ingenuity gap by T.H. Dixon, was an excellent book that looked at this, diminished returns upon complexity and the lack of noteable innovations.

Most of these things aren't re-inventing the wheel, nor creating a lot of jobs, in many ways technology has led to job destruction, or helped with outsourcing. Many science fiction writers discussed the fact that technology increases the chance for tyranny, as fewer and fewer people can have access to immense power-control--in warfare this is fairly obvious.

The US did have some clear advantages, the Atlantic and the Pacific oceans to name two large one's. So how does 'innovations' of higher pixel density, and more add-ons to basically are what are phone's with instant messenger devices going to help the economy at large or dealing with resource depletion rates? The wave generators perhaps and some things like that are truly innovative and could have some big impacts, but again as a rule technology allows fewer people to be involved in 'work' so how do we manage exponential population increase, job decreases or status quo, and resource depletion rates?

Nano-tech robots that can restructure atomically any substance into whatever we want...barring that, seems like the harsh aspects of Darwinism are likely to ensue eventually...
-Meiyo

Anonymous said...

Pioneer Preppy,
Both China and India are all about spending time and money to insure that their huge minority populations are kept happy. They readily use both the carrot and the stick to do so.
I am involved with a situation in North India where the Indian government is educating K thru 12 children from Nepal and Tibet (China) for free.
In China, the one child policy for the Han majority does not apply for minority populations.
Both places have all sorts of special programs for minorities to acculturate them into the majority population.
The US does it grudgingly.

bureaucrat said...

Jeffers,

It is delightful to see that you are posting pieces on the Tea Party (all hat, no cattle) that basically refers back to information I have been posting all long: 80% of Federal spending is SS, Medicare, Medicaid, Interest and Defense (90% of state spending is education, human services, health care and pensions).

The Tea Party is a fraud because, for all their ranting and raving they do about "too much debt" and "government out of control' they are unwilling to face the reality: the spending is being spent ON THEM! They will never amount to anything because the whole movement does not want to face the obvious: THEY are the spending problem!

Much of the trouble we are now in comes from this acidic popular view that more borrowing, "just this one more time," is acceptable, even given the stresses that the Baby Boomers will put on the financial system for the next 20-30 years.

We could have saved, we could have reduced spending, but it is too late for that now. The cost efficiencies that crude oil and cheap Chinese labor are coming to an end. How this all ends up, I am dying to see! I'll probably be still alive to see how this movie ends. :)

bureaucrat said...

(No country as corrupt as China is, through and through, could ever become the next great world power, so there really is no one to take over for America, regulating the distators of the world).

Greg T. Jeffers said...

Bur:

The Tea Party cna't be a fraud because, at least as of yet, they do NOT have a platform.

They are a loose confederation of agitators... agitators that are scaring the living snot out of the 2h1p.

Greg T. Jeffers said...

We ALL KNOW that SS/Medicare/caid will be defaulted/cut deeply... we all KNOW that the U.S. percentage of GDP spend on the military is going to decline... we all KNOW there are many, many other spending points that will absolutely/positively get gutted.

HOW this all comes about is open to debate... that it will come is not.

Anonymous said...

That is exactly the Tea Party's advantage. It is an idea more than an organization. The media can't gut the leadership if they can't identify it.

It is disingenuous to say that nobody knows what they stand for. In broad terms, it is quite clear. Cut entitlements, rollback and rationalize regulation, respect the Constitution. Their plan is to keep throwing the bums out until that happens. There are many people that are willing to accept some serious short term pain to avert the disaster that is coming.

It is an assault on TPTB. They are kicking RINO Republicans to the curb in primaries, who then replace Democrats. TPTB ought to be scared.

Regards,

Coal Guy.

PioneerPreppy said...

Anon 10:55

Any amount of minority or immigrant spending in India or China is insignificant compared to what the US spends. India does in fact spin off a few programs that I am aware of but they are a pale sliver of what the US programs amount to.

As for China if you think they attempt to make minorities and immigrants happy I know some Mongolian monks and Muslim expats you need to talk to.

As for Donal's comment it is easy to see who is getting all the minority education benefits by looking at how the female grad numbers have grown. It is also a big reason the US is falling behind in the sciences too much money going into Wyminns studies and not enough in hard science.

Again it is easy to scream for change when someone else is picking up the bill.

PioneerPreppy said...

And another thing.

Immigrants typically have higher birth rates only for the first generation or so until the anti-family, liberal, progressive, entitlement values creep into high gear. Then it falls quickly to about the same rate as the other victims of liberalism.

If a minority be he/she immigrant or not can't make it through college in America then they just don't have a desire to attend. Lets give them the benefit of the doubt and say they see it for the farce Greg does and just choose to not attend.

Anonymous said...

The best thing that could happen to the USA is to have the entire baby boom generation lose corporate and political power or drop dead. They have run the country into the ground but there's still a chance that their kids will be able to rebuild it.

The Arthurian said...

Thomas Friedman may be the world's brightest dolt. Staniford sounds sharp, from the text you provide, but his concerns center on "innovation." Jeffers, you jump right in with a focus on credit. I'm with you.

And you list core incompetencies. I think those are for the most part consequences of money gone awry.

Art