The conversation seems to be about failings of the pandemic, mostly relating to bureaucracy. I expected to find something startup or business focused, but this is politically focused.
While not completely innovation focused it was an interesting interview. The open source vaccine idea and the January 2020 availability of Pfizer were quite surprising, for me at least.
Innovation-wise the TLDR is that there is too much bureaucracy and scientists do paperwork instead of science.
Yea in some industries like medicine but for example banking industry is one of the most regulated industries out there and every few decades or so there is major financial crisis that has roots in banking so perhaps more regulation was and is needed before and after 2007.
>disguised incumbent-favouring policy
Big companies have a lot of money and ofc they spend some of it to lobby Government that's not going away anytime soon.
One of the most highly regulated industries has regular meltdowns, and your solution to the issue is more regulation?
Have you considered the possibility that the regulation is what causes the issues?
The 2008 recession wasn't caused by lack of regulation, on the contrary it was caused by regulation that forced banks to give out loans that they otherwise wouldn't...
I thought it was due to a variety of actors not understanding their own risky financial products, who was securing the financial products, and woefully inadequate risk models.
I'm not dismissing your claim, but it is at odds with my understanding. Can you explain a bit more?
You are right, but that is a magnifier downstream from the cause. I'm scouring my memory here so apologies for incompleteness. Also this is a somewhat political issue and I'm not necessarily throwing my hat into the ring on this one.
From [0]:
> The meltdown was the consequence of a combination of the easy money and low interest rates engineered by the Federal Reserve and the easy housing engineered by a variety of government agencies and policies. Those agencies include the Department of Housing and Urban Development (HUD) and two nominally private "government-sponsored enterprises" (GSEs), Fannie Mae and Freddie Mac. The agencies — along with laws such as the Community Reinvestment Act (passed in the 1970s, then fortified in the Clinton years), which required banks to make loans to people with poor and nonexistent credit histories — made widespread homeownership a national goal. This all led to a home-buying frenzy and an explosion of subprime and other non-prime mortgages, which banks and GSEs bundled into dubious securities and peddled to investors worldwide. Hovering in the background was the knowledge that the federal government would bail out troubled "too-big-to-fail" financial corporations, including Fannie and Freddie.
So the impetus is really the insanely cheap money stemming from US Federal Reserve policy, and the steering of this cheap money into housing by policy.
The "variety of actors not understanding their own risky financial products" has a governmental cause: all the ratings agencies (Moody's, S&P, Fitch [1]) are government licensed. And they all said the mortgage-backed securities (at least partially comprising sub-prime mortgages, if not entirely) are AAA premium grade. Some investment managers & other commentators called out the absurdity of these ratings but nobody really listened.
>The 2008 recession wasn't caused by lack of regulation, on the contrary it was caused by regulation that forced banks to give out loans that they otherwise wouldn't...
The purpose of banks is to give out loans and earn interest. 2007 financial crisis forced central banks and governments to introduce more financial regulation and protection mechanisms.
And the purpose of money is to be spent or invested. Hoarding cash is almost always bad because inflation eats your savings.
Lots of classic liberian nonsense in here. The reason the productivity had stalled is not regulation but lackluster demand as we foolishly abandoned full employment.
Productivity has stalled because there is no more competition with winner making it big. Part of it is too much regulation. Part is just that no-one bothers when the big monopolies can and do destroy you. Bad government policies all around in both cases.
Demand is not natural and was not for the past century. We have all our basics, as per the Maslow pyramid. Any future demand must be artificially induced with advertising. And with the fat-cats reaping profits every year old products are just rehashed with a sprinkle of new colours every year. Principle of least resistance.
People working full employment will not change anything. The value of a second iPhone is zero after the first iPhone. Same for everything. Look into the Marginal Theory of Value.
There are a lot of hidden assumptions in this response. With the wage share of income and employment fallen, there simply isn't enough purchasing power given to the masses to sustain the consumer economy at full throttle.
If you want more growth, either you have to fix those things, or shift away from a consumer economy.
Yes. Universal Basic Income, with perhaps decaying value currencies, is needed once due to inflation everything gets too expensive while wages stagnate due to capital concentration. Or some big marxist wet dream revolution happens and the society resets.
What is IMO most likely to happen is a proliferation of bullshit jobs as people need money (and hence need jobs which pay salary) because giving UBI is some sort of ultimate evil decadence of communism* or something (even though it is great for a consumption driven economy). So no taxation of the richer folk directly but indirect taxation through employment of pen-pushers.
* UBI makes no sense in a communist society BTW. One of the core tenets is no money.
> is needed once due to inflation everything gets too expensive while wages stagnate due to capital concentration
We have seen vanishingly little inflation over the last decade precisely because the job market was so week. Rich people don't chase after basic goods, so healthcare and housing get more expensive but milk stays the same.
> What is IMO most likely to happen is a proliferation of bullshit jobs as people need money (and hence need jobs which pay salary)
Yes given low demand for labor / strong employer power, productivity I think always declines. There isn't enough demand to do real work, and plenty of mouths that need to earn their feed.
> because giving UBI is some sort of ultimate evil decadence of communism* or something (even though it is great for a consumption driven economy).
https://delong.typepad.com/kalecki43.pdf laid it out nicely almost 80 years ago. The rich don't want demand-driven growth because they care about their slice of the pie in relative terms more than they do in absolute. Great essay shows just how ignorant we got in the post-war slide away of Keynesianism :(.
> So no taxation of the richer folk directly but indirect taxation through employment of pen-pushers.
I don't think that should be viewed as a tax on the rich per-se. The situation is still a regressive division of labor. The proliferation of low-productivity work simply represents the limits of the rich's ability to commandeer resources, after a certain point people do need to be paid off lest they get more mad. And remember this doesn't happen explicitly, but simply because the marginal cost of labor dips so low that further automation isn't worth it.
> UBI makes no sense in a communist society BTW. One of the core tenets is no money.
I don't think that need be a core tenant. Credit money (from banks) is on a spectrum with non-fungible deeply communal informal IOUs and reciprocity. UBI translates over that spectrum into basically mandatory social obligations to anyone in the village/tribe/whatever.
What's bad is having no purchasing power or debts one cannot erase through bankruptcy. Or even letting the market collapse many dimensions to one with a single currency. In teasing out exactly what money is, we can keep the good parts.
To me it seems you both are really talking about the different parts of the same elephant. One of the Marx's objections about capitalism was if the capitalists are being rewarded for building services by additional capital ownership, who are they eventually gonna provide additional services to that this additional capital generates?
And so we finally arrived at this endgame. This manifests as low demand, both from labor (unemployment is keeping wages down) and firms (lack of competition caused by lack of investment opportunities because of predicted lack of demand).
A lot of fields are stifled by regulation. A practical example there is no doubt that it stifles innovation in medicine. The cost of the development has grown exponentially and a lot of it is attributable to the increase in regulation.
Alex Tabarrok is a strident libertarian who is in the employ of the Mercatus Center, a place that was started with "ultraconservative" Koch brothers money and has long been funded by them. Read Dark Money to learn what the Koch's expect in return for the many millions they've poured into the Mercatus Center.
1. "ultraconservative" is Dark Money author Jane Mayer's term for the 'extreme' big-business liberatarian politics of Charles Koch and John Olin.
I don't know - just thinking of construction, for example, we would probably have seen more innovation in that sector over the last century if every town and city in America didn't have its own zoning and land use laws that strictly limit what can be built and where - along with strict building and fire codes that specify exactly how it can be built. Those regulations shouldn't go away entirely, but they should be reassessed and we should recognize that even good regulations come at a cost.
On the topic of unapproved vaccines, is there anything preventing an individual from giving themselves medical treatment without FDA approval. I understand most medical practices can't offer procedures that aren't approved (and I generally agree with that) but are there any restrictions with importing a vial of vaccine (labeled for lab use) and giving yourself a dose?
It probably has helped some companies avoiding competition but I don’t think it has helped innovation. The patents I have encountered felt like patenting math and building up roadblocks.
