16 ms·

PE Obama’s 1st Big Mistake

36 points by peter123 18y ago

wd40 18y ago
Amazing post - perfectly posited imo. The most powerful lines for me: "Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business...Your current group has no one with 100pct of their networth on the line. I promise you that the possibility of losing it all will provide a completely different perspective than any of the “knowledge” the esteemed, learned members of his current advisory team offer."
- JoelSutherland 18y ago
  The danger of advice from somebody with everything on the line is a lack of objectivity. Personally, I don't think we need to make any sweeping changes to encourage entrepreneurship directly. The United States is already a great place to start a business. The key making sure that is true 20 years from now by continuing to invest wisely in education, research, energy...etc.
  - Prrometheus 18y ago
    >The key making sure that is true 20 years from now by continuing to invest wisely in education, research, energy...etc. And by keeping taxes and regulations light and minimal. I would like to point out that our government's investments in education and energy haven't gone very well, though its investment in general research probably does more good than harm.
    - sown 18y ago
      And by keeping taxes and regulations light and minimal. But no more than that. I would like to point out that our government's investments in education and energy haven't gone very well, though its investment in general research probably does more good than harm. It's also worth while to point out that many other industrialized nations have also made investments in energy and education and had better results. So, we shouldn't abandon the idea (as you seem to be implying) but rather take a good look at how we do things.
- jsteele 18y ago
  "Your current group has no one with 100pct of their networth on the line." false, warren buffett's wealth is on the line. from this forbes magazine in front of me, he also has the MOST wealth to lose too. and i'm not sure having desperate types on board give the right balance. me personally i suck at making good, sound long term decisions when a colt .45 is pressed to my head.
mixmax 18y ago
I think the post is a bit misguided. The people you talk to about matters of economy and finance are people with a background in finance and economics. For all their other assets entrepreneurs don't know a lot about macroeconomics, big finance, and economic policy. I'm sure that one layer below this there will be, or at least should be, entrepreneurs that are consulted in order to get the most bang for the buck. But I honestly don't see Mark Zuckerberg lecturing Robert Rubin and Warren Buffet on how to save the economy...
- vlad 18y ago
  Why did you imply that Mark Zuckerberg would be the candidate? A commentor in the blog post did the same, but I did not expect this from Hacker News, when Cuban did not imply at all it should be Zuckerberg or anyone else inexperienced. The people you talk to about matters of economy and finance are people with a background in finance and economics. Cuban did not say there was anything wrong with such experts, but that the team should have someone who runs a small business for a living, that's all. For example, I just thought of an almost identical situation. Ron Paul's campaign advisor on the economy, and one of the two people who predicted the economic collapse in detail two years ago, is also an active entrepreneur. Now, Cuban did not say it has to be someone who is much of an expert, but it doesn't mean it should be some entrepreneur with zero economy experience. I honestly don't see Mark Zuckerberg lecturing Robert Rubin and Warren Buffet on how to save the economy... Cuban clearly implies he wants a good candidate, and not for example, a 23 year old web 2.0 hero. Also, Cuban went out of his way to include franchise owners, mom and pop store owners, and independent contractor's all over the country in his definition of entrepreneur. Besides distorting Cuban's points, I think it is very limiting to think that entrepreneurs are 20 year old founders of web startups, when they could be 45 or 65-year-old economists who have also started multiple startups in their life, whenever you hear the e-word.
  - mixmax 18y ago
    Mark Zuckerberg was just the one that sprung to mind, but I think the argument would be pretty much the same if I had used Jeff Bezos - who was a stockbroker before he founded Amazon, and thus should be somewhat experienced in macroeconomy. My point is that making economic policy, especially in the current environment, is a difficult and specialised task. The people that have the best shot at getting it right are the ones that have the experience, connections and know-how of how to do it. And entrepreneurs don't - they are in a completely different business. This is nothing bad about Mark Zuckerberg, Jeff Bezos or any other entrepreneur - I just think that you should get the best man for the job. I wouldn't want Robert Rubin to be the CIO of my startup either, even though I know he's as smart and dedicated as anyone. It's simply not his expertise.
hugh 18y ago
There are two ways to use advisors. On one hand, you can use them to help you make decisions. On the other hand, you can use them to lend credibility to decisions you've already made. Interestingly, the bigger and more prominent your board of advisors, the harder it becomes to use them for the former purpose and the easier it becomes to use them for the latter.
- mechanical_fish 18y ago
  Precisely. The membership list of this advisory board is a marketing document, not an exclusive list of the people who get to make the policy. This isn't the NBA, where the people on the roster are also the ones who have to play.
- helveticaman 18y ago
  >Interestingly, the bigger and more prominent your board of advisors, the harder it becomes to use them for the former purpose and the easier it becomes to use them for the latter. I'm guessing this is because prominent people are super-busy. Sounds reasonable.
aswanson 18y ago
I don't think he, or any politician at that level, for that matter, can help it. The only people they rub elbows with are the established, credentialed, and connected. If he knew the right startup/entrepreneur people he would be a VC or angel, not a politician.
sridharvembu 18y ago
I had the same thought as Mark Cuban. A PhD in Economics, even winning the Nobel Prize (see my critique of Krugman) doesn't give you the real world feel that starting and running a business does. Economics is full of unintended consequences. Couple of examples, which every start-up person here can appreciate: if you make it very hard to do a lay-off, that leads to businesses becoming extremely cautious in hiring. The minimum wage directly leads to entrepreneurs not taking a chance to hire a less skilled person and train them on the job. These are easy enough to see when you run a business. It would amaze you how many things that are "common sense" for an entrepreneur are hard for someone sitting in their ivory tower. This is not just a problem in economics. After I got out of Princeton with a PhD in Electrical Engineering, it amazed me just how orthogonal to the real world much of my adviser's academic work proved to be - I happened to land a job that directly dealt with one of his core areas of research, though I wasn't involved in that area during my PhD myself. My realization led me to write a paper that pointed out that his work was dealing in mathematical models that were not very relevant to the real world, which predictably led to our intellectual parting of ways. I felt experience working as an engineer should be mandatory for anyone aspiring to be an engineering professor, yet you will find that most engineering faculty have never worked outside of academia.
- mmm3999 18y ago
  Not arguing your underlying point, but the examples you chose are poor--all economists are well aware of the effects of a minimum wage, and of barriers to hiring/firing. It's people with no background in economics who don't understand those things.
  - sridharvembu 18y ago
    I would agree if you said "most economists" instead of "all". On the minimum wage, a couple of Princeton economists wrote a scholarly paper pointing out how that didn't suppress hiring (sorry, don't have a handy reference) or increase unemployment. On barriers to hiring/firing, I grant that most economists would agree they are bad. On the other hand, Krugman himself has been a strong advocate of nationalized health care. Milton Friedman argued how the health care problem is really one of licensing regulations designed to maximize pay for doctors. Imagine an American Software Association that decides how many licenses to grant every year, and you need those credentials to be a hacker. Yes, Friedman addressed the "quack" argument too.
deleted 18y ago
[deleted]
nsimpson 18y ago
Does anyone else see this as a thinly veiled partisan rant along the lines of, "Democrats are Ivory Tower elitists who hate Joe the Plumber and will destroy free enterprise in the USA"? In what sense does this article have any practical value for entrepreneurs, or even the Obama administration? Seems like Schmidt, Page and Brin have been offering plenty of informal advice along with lots of other successful entrepreneurs.
Allocator2008 18y ago
Wow. So this post is seriously suggesting we make Joe the Plumber Treasury Secretary? Man I'm in the wrong business. Maybe if I had gone into plunging toilets instead of testing software I could be an economic guru too.
sown 18y ago
Finance != Economics.
nazgulnarsil 18y ago
I think from the primary polls a good 10% of the country would like to see Ron Paul as an adviser. He has consistently showed that he has a firm grasp of conservative economics and an intellectually honest president would want both sides represented.
jobeirne 18y ago
Uh, can anyone tell me how "your current group has no one with 100pct of their networth on the line" is a reasonable complaint? We're talking economics here. Smart people familiar with basic economics don't risk 100% of their net worth.
patrickg-zill 18y ago
Is there a pool on when Cuban will start expressing buyer's remorse on his Chris Matthews-style leg tingling for Obama? I'll take "last week of February 2009" if it's available.
joubert 18y ago
Maverick schmaverick. However, to give you the benefit of the doubt, name 3 startuppers that you would propose. BTW, do you seriously think Warren Buffets advice on macroeconomics would be worth less than someone who has started the corner deli?
davidw 18y ago
I am quite happy that Obama won, but I have started flagging pretty much all of the articles with 'Obama' in the title. I don't want to talk about politics here.

36 points by peter123 18y ago

wd40 18y ago

Amazing post - perfectly posited imo. The most powerful lines for me: "Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business...Your current group has no one with 100pct of their networth on the line. I promise you that the possibility of losing it all will provide a completely different perspective than any of the “knowledge” the esteemed, learned members of his current advisory team offer."

JoelSutherland 18y ago
The danger of advice from somebody with everything on the line is a lack of objectivity. Personally, I don't think we need to make any sweeping changes to encourage entrepreneurship directly. The United States is already a great place to start a business. The key making sure that is true 20 years from now by continuing to invest wisely in education, research, energy...etc.
- Prrometheus 18y ago
  >The key making sure that is true 20 years from now by continuing to invest wisely in education, research, energy...etc. And by keeping taxes and regulations light and minimal. I would like to point out that our government's investments in education and energy haven't gone very well, though its investment in general research probably does more good than harm.
  - sown 18y ago
    And by keeping taxes and regulations light and minimal. But no more than that. I would like to point out that our government's investments in education and energy haven't gone very well, though its investment in general research probably does more good than harm. It's also worth while to point out that many other industrialized nations have also made investments in energy and education and had better results. So, we shouldn't abandon the idea (as you seem to be implying) but rather take a good look at how we do things.
jsteele 18y ago
"Your current group has no one with 100pct of their networth on the line." false, warren buffett's wealth is on the line. from this forbes magazine in front of me, he also has the MOST wealth to lose too. and i'm not sure having desperate types on board give the right balance. me personally i suck at making good, sound long term decisions when a colt .45 is pressed to my head.

mixmax 18y ago

I think the post is a bit misguided. The people you talk to about matters of economy and finance are people with a background in finance and economics. For all their other assets entrepreneurs don't know a lot about macroeconomics, big finance, and economic policy. I'm sure that one layer below this there will be, or at least should be, entrepreneurs that are consulted in order to get the most bang for the buck. But I honestly don't see Mark Zuckerberg lecturing Robert Rubin and Warren Buffet on how to save the economy...

vlad 18y ago
Why did you imply that Mark Zuckerberg would be the candidate? A commentor in the blog post did the same, but I did not expect this from Hacker News, when Cuban did not imply at all it should be Zuckerberg or anyone else inexperienced. The people you talk to about matters of economy and finance are people with a background in finance and economics. Cuban did not say there was anything wrong with such experts, but that the team should have someone who runs a small business for a living, that's all. For example, I just thought of an almost identical situation. Ron Paul's campaign advisor on the economy, and one of the two people who predicted the economic collapse in detail two years ago, is also an active entrepreneur. Now, Cuban did not say it has to be someone who is much of an expert, but it doesn't mean it should be some entrepreneur with zero economy experience. I honestly don't see Mark Zuckerberg lecturing Robert Rubin and Warren Buffet on how to save the economy... Cuban clearly implies he wants a good candidate, and not for example, a 23 year old web 2.0 hero. Also, Cuban went out of his way to include franchise owners, mom and pop store owners, and independent contractor's all over the country in his definition of entrepreneur. Besides distorting Cuban's points, I think it is very limiting to think that entrepreneurs are 20 year old founders of web startups, when they could be 45 or 65-year-old economists who have also started multiple startups in their life, whenever you hear the e-word.
- mixmax 18y ago
  Mark Zuckerberg was just the one that sprung to mind, but I think the argument would be pretty much the same if I had used Jeff Bezos - who was a stockbroker before he founded Amazon, and thus should be somewhat experienced in macroeconomy. My point is that making economic policy, especially in the current environment, is a difficult and specialised task. The people that have the best shot at getting it right are the ones that have the experience, connections and know-how of how to do it. And entrepreneurs don't - they are in a completely different business. This is nothing bad about Mark Zuckerberg, Jeff Bezos or any other entrepreneur - I just think that you should get the best man for the job. I wouldn't want Robert Rubin to be the CIO of my startup either, even though I know he's as smart and dedicated as anyone. It's simply not his expertise.

hugh 18y ago

There are two ways to use advisors. On one hand, you can use them to help you make decisions. On the other hand, you can use them to lend credibility to decisions you've already made. Interestingly, the bigger and more prominent your board of advisors, the harder it becomes to use them for the former purpose and the easier it becomes to use them for the latter.

mechanical_fish 18y ago
Precisely. The membership list of this advisory board is a marketing document, not an exclusive list of the people who get to make the policy. This isn't the NBA, where the people on the roster are also the ones who have to play.
helveticaman 18y ago
>Interestingly, the bigger and more prominent your board of advisors, the harder it becomes to use them for the former purpose and the easier it becomes to use them for the latter. I'm guessing this is because prominent people are super-busy. Sounds reasonable.

aswanson 18y ago

I don't think he, or any politician at that level, for that matter, can help it. The only people they rub elbows with are the established, credentialed, and connected. If he knew the right startup/entrepreneur people he would be a VC or angel, not a politician.

sridharvembu 18y ago

I had the same thought as Mark Cuban. A PhD in Economics, even winning the Nobel Prize (see my critique of Krugman) doesn't give you the real world feel that starting and running a business does. Economics is full of unintended consequences. Couple of examples, which every start-up person here can appreciate: if you make it very hard to do a lay-off, that leads to businesses becoming extremely cautious in hiring. The minimum wage directly leads to entrepreneurs not taking a chance to hire a less skilled person and train them on the job. These are easy enough to see when you run a business. It would amaze you how many things that are "common sense" for an entrepreneur are hard for someone sitting in their ivory tower. This is not just a problem in economics. After I got out of Princeton with a PhD in Electrical Engineering, it amazed me just how orthogonal to the real world much of my adviser's academic work proved to be - I happened to land a job that directly dealt with one of his core areas of research, though I wasn't involved in that area during my PhD myself. My realization led me to write a paper that pointed out that his work was dealing in mathematical models that were not very relevant to the real world, which predictably led to our intellectual parting of ways. I felt experience working as an engineer should be mandatory for anyone aspiring to be an engineering professor, yet you will find that most engineering faculty have never worked outside of academia.

mmm3999 18y ago
Not arguing your underlying point, but the examples you chose are poor--all economists are well aware of the effects of a minimum wage, and of barriers to hiring/firing. It's people with no background in economics who don't understand those things.
- sridharvembu 18y ago
  I would agree if you said "most economists" instead of "all". On the minimum wage, a couple of Princeton economists wrote a scholarly paper pointing out how that didn't suppress hiring (sorry, don't have a handy reference) or increase unemployment. On barriers to hiring/firing, I grant that most economists would agree they are bad. On the other hand, Krugman himself has been a strong advocate of nationalized health care. Milton Friedman argued how the health care problem is really one of licensing regulations designed to maximize pay for doctors. Imagine an American Software Association that decides how many licenses to grant every year, and you need those credentials to be a hacker. Yes, Friedman addressed the "quack" argument too.

deleted 18y ago

[deleted]

nsimpson 18y ago

Does anyone else see this as a thinly veiled partisan rant along the lines of, "Democrats are Ivory Tower elitists who hate Joe the Plumber and will destroy free enterprise in the USA"? In what sense does this article have any practical value for entrepreneurs, or even the Obama administration? Seems like Schmidt, Page and Brin have been offering plenty of informal advice along with lots of other successful entrepreneurs.

Allocator2008 18y ago

Wow. So this post is seriously suggesting we make Joe the Plumber Treasury Secretary? Man I'm in the wrong business. Maybe if I had gone into plunging toilets instead of testing software I could be an economic guru too.

sown 18y ago

Finance != Economics.

nazgulnarsil 18y ago

I think from the primary polls a good 10% of the country would like to see Ron Paul as an adviser. He has consistently showed that he has a firm grasp of conservative economics and an intellectually honest president would want both sides represented.

jobeirne 18y ago

Uh, can anyone tell me how "your current group has no one with 100pct of their networth on the line" is a reasonable complaint? We're talking economics here. Smart people familiar with basic economics don't risk 100% of their net worth.

patrickg-zill 18y ago

Is there a pool on when Cuban will start expressing buyer's remorse on his Chris Matthews-style leg tingling for Obama? I'll take "last week of February 2009" if it's available.

joubert 18y ago

Maverick schmaverick. However, to give you the benefit of the doubt, name 3 startuppers that you would propose. BTW, do you seriously think Warren Buffets advice on macroeconomics would be worth less than someone who has started the corner deli?

davidw 18y ago

I am quite happy that Obama won, but I have started flagging pretty much all of the articles with 'Obama' in the title. I don't want to talk about politics here.