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I like the creativity here, but the naivete is a bit much. Very strange that I should make that observation about Cuban, but there it is. We already have this

I like the creativity here, but the naivete is a bit much. Very strange that I should make that observation about Cuban, but there it is. We already have this incredible sophisticated and involved system for creating jobs -- its called the startup market. Each year, tens of thousands of folks come up with ideas to do things people want, and that always means creating a job, if only for the founders. Each year folks invest, or not, and those folks get a shot at succeeding. So we have tens of thousands of highly-motivated folks putting their own lives and money on the line to make jobs. How could this possibly stack up against BigCorp getting subsidies to create busywork? The Tea Party used to be non-partisan, at least in theory. Probably never really were, though. But there's a critical non-partisan meta point that you have to acknowledge before you spin off with a bunch of creative top-down ideas: we've been here before. Every time there's an economic problem people come out of the woodwork with all sorts of totally awesome ideas. Some of these work, some don't. The only difference between these implemented ideas and the startups I mentioned is that these ideas are huge things and we can only do a few at a time as a nation. I think this creative problem-solving is great, but you have to face facts: been there, done that. Whatever we do, we have to have a system that continues to let us come up with and fund these ideas when we need to. Running huge deficits and debt loads over 100% of GDP doesn't let us do that. [insert argument about how I exaggerate when exactly we become limited in our options, but note that at some point even the hardiest Keynesian must realize that the time has arrived.] So debt arguments are not necessarily about philosophy for how to run the economy and create jobs, they can be about the simple ability to do so. If you ask me, we need to talk about policies that are going to create millions of failures from the bottom-up, all trying to build things to help folks. Not trying to pick among the hundreds of great ideas for the top 3 or 4 that we then throw hundreds of billions of dollars at. It might feel great all rallying around one or two cool ideas, but this is a numbers game. We need to play it intelligently.

RockyMcNuts 15y ago
Naive is pretty much what I thought. The organization he describes is called a 'bank' - the government could just tell banks they will guarantee loans properly underwritten based on X criteria that correlate to number of new jobs created. Starts to sound awfully like Fannie and Freddie, which made sense when there was no national banking or mortgage market, but tens of thousands of banks with no access to capital. But later they become pure rent-seeking bureaucracies monetizing an implicit Federal guarantee doing nothing a national bank wouldn't do. (not blaming Fannie/Freddie for the crisis although they didn't help matters, and based on bank behavior banks arguably would have done an even worse job). Could be creating a monster that never goes away and distorts the market. Cuban's proposal is also paralleling oil policy in the 70s - deregulate 'new' oil and put a 'windfall profits tax' on already discovered oil. In theory it promoted drilling - in fact it also promoted game-playing to launder 'old' oil into 'new' oil. Similarly, this would be limited to employers who can navigate the paperwork, and it would make economic sense to use this for projects they would have done anyway or somehow laundering existing jobs into 'new' jobs by transferring work to new entities. Good idea to study why people aren't hiring and provide appropriate incentives to reduce the costs and risks of hiring. The payroll tax holiday was a good idea to reduce cost of employees; extra deductions for training programs to increase productivity, maybe tax credits for hiring long-term unemployed. The more broad-based and the less paperwork the better. I'm not sure the reason companies aren't hiring is related to access to credit. There are labor economists who spend their lives on these problems, Cuban should probably talk to some of them, they might have a lot of ideas, some of them might even be politically feasible, and make sense to a business guy like Cuban who can get support for them.

RockyMcNuts 15y ago

Naive is pretty much what I thought. The organization he describes is called a 'bank' - the government could just tell banks they will guarantee loans properly underwritten based on X criteria that correlate to number of new jobs created. Starts to sound awfully like Fannie and Freddie, which made sense when there was no national banking or mortgage market, but tens of thousands of banks with no access to capital. But later they become pure rent-seeking bureaucracies monetizing an implicit Federal guarantee doing nothing a national bank wouldn't do. (not blaming Fannie/Freddie for the crisis although they didn't help matters, and based on bank behavior banks arguably would have done an even worse job). Could be creating a monster that never goes away and distorts the market. Cuban's proposal is also paralleling oil policy in the 70s - deregulate 'new' oil and put a 'windfall profits tax' on already discovered oil. In theory it promoted drilling - in fact it also promoted game-playing to launder 'old' oil into 'new' oil. Similarly, this would be limited to employers who can navigate the paperwork, and it would make economic sense to use this for projects they would have done anyway or somehow laundering existing jobs into 'new' jobs by transferring work to new entities. Good idea to study why people aren't hiring and provide appropriate incentives to reduce the costs and risks of hiring. The payroll tax holiday was a good idea to reduce cost of employees; extra deductions for training programs to increase productivity, maybe tax credits for hiring long-term unemployed. The more broad-based and the less paperwork the better. I'm not sure the reason companies aren't hiring is related to access to credit. There are labor economists who spend their lives on these problems, Cuban should probably talk to some of them, they might have a lot of ideas, some of them might even be politically feasible, and make sense to a business guy like Cuban who can get support for them.