Monday, January 21, 2013

Same as the old boss

I've read Joel Kotkin for years and his latest post is a tidy summation of what Obama is all about:

Contrary to the conservative claims of Obama’s “socialist” tendencies, the administration is quite comfortable with such capitalist sectors as entertainment, the news media and the software side of the technology industry, particularly social media. The big difference is these firms derive their fortunes not from the soil and locally crafted manufacturers, but from the manipulation of ideas, concepts and images.

Apple, Google, Facebook, Amazon and Microsoft are far from “the workers of the world,” but closer to modern-day robber barons. Through their own ingenuity, access to capital and often oligopolistic hold on lucrative markets, they have enjoyed one of the greatest accumulations of wealth in recent economic history, even amidst generally declining earnings, rising poverty and inequality among their fellow Americans.

Nice work if you can get it. And how do make it happen? You get help.
An even greater beneficiary of the second term will be the administrative class, who by their nature live largely outside the market system. This group, which I call the new clerisy, is based largely in academia and the federal bureaucracy, whose numbers and distinct privileges have grown throughout the past half century.

Even in tough times, high-level academics enjoy tenure and have been largely spared from job cuts. Between late 2007 and mid-2009, the number of U.S. federal workers earning more than $150,000 more than doubled, even as the economy fell into a deep recession. Even as the private sector, and state government employment has fallen, the ranks of federal nomenklatura have swelled so much that Washington, D.C., has replaced New York as the wealthiest region in the country.

There are myriad problems with this arrangement. Power that is wielded from a great distance away is always going to be more arbitrary and likely to be wrong about conditions on the ground. Unless you are part of the system, your chances of moving the needle in Washington are very, very small.

I know the mayor of my town personally. If I had a grievance, he'd take my call. I don't know the governor of Minnesota, but it's easy to find the governor's mansion on Summit Avenue and stage a protest in front of the gate. I might not get his attention, but there would be a chance. Trying to get the attention of the federal leviathan? Good luck with that. Back to Kotkin:

Let’s be clear — this new ascendant class is no threat to either the “one percent,”  or even the much smaller decimal groups. Historically, the already rich and large economic interests often profit in a hyper-regulated state; the clerisy’s actions can often stifle competition by increasing the cost of entry for unwelcome new players. Like Cardinal Richelieu or Louis XIV’s finance minister, Jean-Baptiste Colbert, our modern-day dirigistes favor state-directed capital that has benefited, among others, “green” capitalists, Wall Street “too big to fail” firms and, of course, General Motors.
This is a crucial point and one that's been obvious for years. For all the railing one hears about Republicans being the party of Big Business, it's not really the case. Big Businesses love the regulatory state, because it creates barriers to entry into the marketplace. Regulatory compliance kills a lot of businesses because it keeps the entrepreneur from doing the work he/she loves. This is why the Republican Party's real constituency are smaller businesses and why you heard so much about that topic from Mitt Romney and others in 2012.

The larger issue is something else, however. Kotkin:
More disturbing still may be the clerisy’s regal disregard for democratic give and take. Both traditional hierarchies, or new ones like the Bolsheviks after the 1917 revolution, disdain popular will as intrinsically lacking in scientific judgment and societal wisdom. Some leading figures in the clerisy, such as former Obama budget advisor Peter Orszag, openly argue for shifting power from naturally contentious elected bodies to credentialed “experts” operating in places Washington, Brussels or the United Nations.

Such experts, of course, see little need for give and take with their intellectual inferiors, in Congress or elsewhere. This attitude is expressed in the administration’s increasing use of executive orders to promote policy goals such as better gun control, reduced greenhouse emissions or reform of immigration. Whatever one’s views on these issues, that they are increasingly settled outside Congress represents a troublesome notion.
What's more troublesome is that so many people seem unconcerned that the folks in Washington are able to get by with it. There's more at the link and I'd encourage you to read it all.


Brian said...

Kotkin decries class warfare in one breath while stoking it along different lines in another. Hell, he even invokes "robber barons" to describe the people driving the 21st century, idea-driven economy. He's not entirely wrong about that point...but mostly he just seems pissed that they donate to Democrats.

This is just a repackaging (albeit a well-written one) of the reflexive anti-intellecutalism that has animated much of the American right for decades.

Anyway, you should take heart. History suggests that democracy tends to favor regression to the mean. The smart guys won't be in charge forever.

Mr. D said...

He's not entirely wrong about that point...but mostly he just seems pissed that they donate to Democrats.

Except that Kotkin is a Democrat, that would make a lot of sense.

The smart guys won't be in charge forever.

The smart guys aren't in charge now. Which is kinda the point.

Gino said...

touche', Mr D.